AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 4, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
HVIDE MARINE INCORPORATED
Florida 65-0524593
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
---------------
HVIDE CAPITAL TRUST
Delaware TO BE APPLIED FOR
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
---------------
2200 ELLER DRIVE, P.O. BOX 13038
FORT LAUDERDALE, FLORIDA 33316
(954) 523-2200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------
J. ERIK HVIDE
CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER
2200 ELLER DRIVE, P.O. BOX 13038
FORT LAUDERDALE, FLORIDA 33316
(954) 523-2200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
COPIES OF COMMUNICATIONS TO:
MICHAEL JOSEPH
DYER ELLIS & JOSEPH
600 NEW HAMPSHIRE AVE., N.W.
WASHINGTON, DC 20037
(202) 944-3000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or 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, 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. |_|
<PAGE>
CALCULATION OF REGISTRATION FEE:
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH OFFERING PRICE AGGREGATE AMOUNT OF
CLASS OF SECURITIES AMOUNT TO BE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED SECURITY(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
6 1/2% Trust Convertible Preferred Securities
of Hvide Capital Trust........................... 2,300,000 $50.00(1)(2) $115,000,000 $34,849.00
preferred (1)(2)
securities
Convertible Subordinated Debentures of
Hvide Marine Incorporated........................ (3) (3) (3) --
Class A Common Stock, par value $0.001 per
share, of Hvide Marine Incorporated.............. 4,035,120 shs. (4) (4) (4) (4)
Preferred Securities Guarantee of Hvide
Marine Incorporated.............................. (5) (5) (5) (5)
================================================== ================== =============== ================= =================
Total............................................. 2,300,000 100%(1)(2) $115,000,000 $34,849.00
================================================== ================== =============== ================= =================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457 of the Securities Act.
(2) Exclusive of accrued interest and distributions, if any.
(3) $115,000,000 in aggregate principal amount of 6 1/2% Convertible
Subordinated Debentures due 2012 (the "Debentures")
issued by Hvide Marine Incorporated, were issued and sold to Hvide Capital
Trust, a Delaware statutory business trust (the "Issuer"), in connection with
the issuance by the Issuer of its 6 1/2% Trust Convertible Preferred
Securities (the "Preferred Securities"). The Debentures may be
distributed, under certain circumstances, to the holders of Preferred
Securities for no additional consideration.
(4) The Preferred Securities are convertible into Class A Common Stock, $0.001
par value per share (the "Class A Common Stock"), of Hvide Marine
Incorporated (the "Company"). Each Preferred Security is initially
convertible into 1.7544 shares of Class A Common Stock, subject to
adjustment under certain circumstances. This registration statement
includes such additional shares of Class A Common Stock as may be issuable
pursuant to such adjustments.
(5) Includes the obligation of the Company under the Guarantee (as defined
herein) and certain back-up undertakings under (i) the Indenture
(as defined herein) pursuant to which the Debentures were issued, (ii) the
Debentures and (iii) the Amended and Restated Trust Agreement
of the Issuer, including the Company's obligation under such Indenture to
pay costs, expenses, debts and liabilities of the trust (other than
with respect to the Preferred Securities and the Common Securities of the
Issuer), which in the aggregate provide a full and unconditional
guarantee of amounts due on the Preferred Securities. No separate
consideration will be received for the Guarantee and such back-up
undertakings. The Guarantee is not traded separately.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION, DATED SEPTEMBER 4, 1997
, 1997
2,300,000 PREFERRED SECURITIES
HVIDE CAPITAL TRUST
6 1/2% TRUST CONVERTIBLE PREFERRED SECURITIES
(Liquidation Preference $50 per Preferred Security)
and
4,035,120 SHARES
HVIDE MARINE INCORPORATED
CLASS A COMMON STOCK
(Issuable Upon Conversion of the Preferred Securities)
This Prospectus relates to the resale by the holders thereof of 6 1/2%
Trust Convertible Preferred Securities (the "Preferred Securities"), which
represent undivided beneficial interests in the assets of Hvide Capital Trust, a
statutory business trust created under the laws of the State of Delaware (the
"Issuer" or the "Trust"), and the shares of Class A Common Stock, par value
$0.001 per share (the "Hvide Class A Common Stock" or "Class A Common Stock"),
of Hvide Marine Incorporated, a Florida corporation ("Hvide" or the "Company"),
issuable upon conversion of the Preferred Securities. The Preferred Securities
were issued and sold by the Issuer on June 27, 1997 (the "Original Offering") to
Donaldson, Lufkin & Jenrette Securities Corporation, Howard, Weil, Labouisse,
Friedrichs Incorporated, and Raymond James & Associates, Inc. (the "Initial
Purchasers") and were simultaneously resold by the Initial Purchasers in
transactions exempt from the Securities Act of 1933, as amended (the "Securities
Act"). The Preferred Securities are traded in the Private Offering, Resale and
Trading through Automated Linkages ("PORTAL") Market. All of the beneficial
interests in the assets of the Issuer represented by common securities of the
Issuer (the "Common Securities") are owned by Hvide. The Issuer exists for the
sole purpose of issuing the Preferred Securities and Common Securities and
investing the proceeds therefrom in 6 1/2% Convertible Subordinated Debentures
due June 15, 2012 (the "Debentures") issued by Hvide. The Preferred Securities
have a preference under certain circumstances with respect to cash distributions
and amounts payable on liquidation, redemption or otherwise over the Common
Securities. See "Description of the Preferred Securities--Subordination of
Common Securities."
The Preferred Securities and Class A Common Stock issuable upon
conversion of the Preferred Securities (collectively the "Offered Securities")
may be offered and sold from time to time by the holders named herein or by
their transferees, pledgees, donees or their successors (collectively, the
"Selling Holders") pursuant to this Prospectus. The Offered Securities may be
sold by the Selling Holders from time to time directly to purchasers or through
agents, underwriters or dealers. See "Selling Holders" and "Plan of
Distribution." If required, the names of any such agents or underwriters
involved in the sale of the Offered Securities and the applicable agent's
commission, dealer's purchase price or underwriter's discount, if any, will be
set forth in an accompanying supplement to this Prospectus (the "Prospectus
Supplement"). The Selling Holders will receive all of the net proceeds from the
sale of the Offered Securities and will pay all underwriting discounts, selling
commissions and transfer taxes, if any, applicable to any such sale. Hvide is
responsible for payment of all expenses incident to the registration of the
Offered Securities. The Selling Holders and any broker-dealers, agents or
underwriters that participate in the distribution of the Offered Securities may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commission received by them and any profit on the resale of the Offered
Securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. See "Plan of Distribution" for a description
of indemnification arrangements.
Holders of the Preferred Securities are entitled to receive
preferential cumulative cash distributions from the Issuer at an annual rate of
6 1/2% of the liquidation preference of $50 per Preferred Security accruing from
June 27, 1997 and payable quarterly in arrears on January 1, April 1, July 1 and
October 1 of each year, commencing October 1, 1997 ("Distributions"). The
distribution rate and the distribution and other payment dates for the Preferred
Securities correspond to the interest rate and interest and other payment dates
in the Debentures, which are the sole assets of the Issuer. As a result, if
principal or interest is not paid on the Debentures, no amounts will be paid on
the Preferred Securities.
Each Preferred Security is convertible in the manner described herein
at the option of the holder, at any time beginning September 25, 1997 and prior
to the Conversion Expiration Date (as defined herein), into shares of Hvide
Class A Common Stock at the rate of 1.7544 shares of Hvide Class A Common Stock
for each Preferred Security (equivalent to a conversion price of $28.50 per
share of Hvide Class A Common Stock), subject to adjustment in certain
circumstances. See "Description of the Preferred Securities--Conversion Rights"
and "Description of Hvide Capital Stock." The last reported sale price of Hvide
Class A Common Stock, which is traded under the symbol "HMAR" on The Nasdaq
National Market, on September 2, 1997 was $33 per share. (continued on next
page)
SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF
CERTAIN FACTORS TO BE CONSIDERED IN CONNECTION WITH AN
INVESTMENT IN THE PREFERRED SECURITIES AND THE CLASS A
COMMON STOCK.
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.
3
<PAGE>
(continued from cover page)
In order to maintain the eligibility of Hvide to operate vessels in the
U.S. domestic trade, 75% of the outstanding capital stock and voting power of
Hvide is required to be held by U.S. citizens. As a result of this requirement,
any non-citizen holder of the Preferred Securities or the Debentures will, to
the extent the conversion thereof into shares of Hvide Class A Common Stock
would cause more than 25% of Hvide's outstanding Common Stock (as defined
herein) to be held by non-citizens, be unable to convert its Preferred
Securities or Debentures into shares of Hvide Class A Common Stock and will be
required to sell its Preferred Securities or Debentures to U.S. citizens in
order to realize the economic benefits, if any, of conversion. See "Risk
Factors--Restriction on Foreign Ownership of Common Stock; Possible Inability to
Convert Preferred Securities and Debentures."
So long as Hvide is not in default in the payment of interest on the
Debentures and no other event of default under the Debentures is continuing,
Hvide has the right to defer payment of interest on the Debentures at any time
or from time to time for a period not exceeding 20 consecutive quarters with
respect to each deferral period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the stated maturity of the Debentures. Upon
the termination of any such Extension Period and the payment of all amounts then
due on any Interest Payment Date (as defined herein), Hvide may elect to begin a
new Extension Period subject to the requirements set forth herein. If interest
payments on the Debentures are so deferred, Distributions on the Preferred
Securities will also be deferred and Hvide will not be permitted, subject to
certain exceptions set forth herein, to declare or pay cash distributions with
respect to Hvide's capital stock or debt securities that rank pari passu with or
junior to the Debentures.
During an Extension Period, interest on the Debentures will continue to
accrue (and the amount of Distributions to which holders of the Preferred
Securities are entitled will accumulate at the stated rate per annum, compounded
quarterly) and holders of Preferred Securities will be required to accrue
interest income for United States federal income tax purposes. See "Description
of the Debentures--Option to Extend Interest Payment Period" and "Certain
Federal Income Tax Consequences--Original Issue
Discount."
Except as provided below, the Preferred Securities may not be redeemed
by the Issuer prior to July 2, 2000. The Preferred Securities are subject to
mandatory redemption, in whole or in part, on or after such date, at redemption
prices set forth herein, upon any permitted redemption of Debentures by Hvide.
See "Description of the Preferred Securities--Optional Redemption." In addition,
the Preferred Securities are subject to mandatory redemption upon the repayment
at maturity or as a result of acceleration of the Debentures. See "Description
of the Preferred Securities--Mandatory Redemption."
Under certain circumstances following the occurrence of a Special Event
(as defined herein), the Preferred Securities are also subject to (i) exchange,
at the option of the Issuer in the manner described herein, for Debentures (see
"Description of the Preferred Securities--Special Event Exchange or Redemption")
and (ii) redemption, in whole or in part, on or after July 2, 2000, if such
Special Event constitutes a Tax Event (as defined herein). At any time, Hvide
will have the right to terminate the Issuer and cause the Debentures to be
distributed to the holders of the Preferred Securities in liquidation of the
Issuer. See "Description of the Preferred Securities--Distribution of
Debentures."
4
<PAGE>
Hvide has, through the Guarantee, the Declaration, the Debentures and
the Indenture (each, as defined herein), taken together, fully, irrevocably and
unconditionally guaranteed all of the Issuer's obligations under the Preferred
Securities. See "Description of the Guarantee," "Hvide Capital Trust" and
"Description of the Debentures." The Guarantee of Hvide guarantees the payment
of Distributions and payments on liquidation or redemption of the Preferred
Securities, but only in each case to the extent of funds held by the Issuer, as
described herein (the "Guarantee"). See "Description of the Guarantee." If Hvide
does not make interest payments on the Debentures held by the Issuer, the Issuer
will have insufficient funds to pay Distributions on the Preferred Securities.
The Guarantee does not cover payment of Distributions when the Issuer does not
have sufficient funds to pay such Distributions. In such event, a holder of
Preferred Securities may institute a legal proceeding directly against Hvide to
enforce payment under the Debentures of such Distributions to such holder. The
obligations of Hvide under the Guarantee are subordinate and junior in right of
payment to all other liabilities of Hvide and rank pari passu with any guarantee
now or hereafter entered into by Hvide in respect of any preferred or preference
stock of any affiliate of Hvide. See "Description of the
Debentures--Subordination."
The Debentures are subordinate and junior in right of payment to all
Senior Debt (as defined herein) of Hvide. The terms of the Debentures place no
limitation on the amount of Senior Debt that may be incurred by Hvide or the
amount of indebtedness that may be incurred by its subsidiaries. As of June 30,
1997, Hvide had outstanding $38.8 million of Senior Debt. Hvide will have the
right from time to time on or after July 2, 2000 to redeem, in whole or in part,
the Debentures at the redemption prices set forth herein. See "Description of
the Debentures--Mandatory Redemption" and "--Optional Redemption."
In the event of the dissolution of the Issuer, after satisfaction of
the creditors of the Issuer as provided by applicable law, the holders of the
Preferred Securities will be entitled to receive a liquidation preference of $50
per Preferred Security plus accumulated and unpaid Distributions thereon to the
date of payment, which may be in the form of a distribution of such amount in
Debentures, subject to certain exceptions. See "Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution."
5
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE
DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES 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 WHO IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
Prospectus Summary.....................................7
Risk Factors..........................................13
Incorporation of Certain Documents by Reference.......22
Forward-Looking Information...........................22
Hvide Capital Trust...................................23
The Company...........................................25
Use of Proceeds.......................................25
Accounting Treatment..................................25
Ratio of Earnings to Fixed Charges....................25
Description of the Preferred Securities...............26
Description of the Guarantee..........................48
Description of the Debentures.........................51
Relationship Among the Preferred Securities,
the Debentures and the Guarantee.............61
Description of Certain Indebtedness...................63
Description of Hvide Capital Stock....................65
Certain Federal Income Tax Consequences...............74
Selling Holders.......................................82
Plan of Distribution..................................83
Experts...............................................84
Legal Matters.........................................84
Available Information.................................84
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and consolidated
financial statements (including the notes thereto) appearing elsewhere in this
Prospectus and in the documents incorporated herein by reference.
THE COMPANY
Hvide (pronounced "vee-dah") provides marine support and transportation
services in the U.S. domestic trade and in selected international markets
principally to the energy and chemical industries. The Company is the third
largest operator of supply and crew boats in the U.S. Gulf of Mexico and, as a
result of a May 1997 acquisition, is one of the largest operators of offshore
energy support vessels in the Arabian Gulf. In addition, the Company is the sole
provider of commercial tug services in Port Everglades and Port Canaveral,
Florida, and a leading provider of such services in Mobile, Alabama. The Company
also transports petroleum products and specialty chemicals in the U.S. domestic
trade, a market insulated from international competition under the Jones Act. In
addition, the Company has a 2.4% interest, and options to acquire up to an
additional 72.6% interest, in five double-hull petroleum product carriers
currently under construction for delivery during 1998 and 1999.
OFFERED SECURITIES
Preferred Securities...................... 2,300,000 6 1/2% Trust Convertible
Preferred Securities of Hvide
Capital Trust, liquidation
preference of $50 per Preferred
Security.
Common Stock.............................. 4,035,120 shares of Class A Common
Stock of Hvide, issuable
upon conversion of the Preferred
Securities.
DESCRIPTION OF PREFERRED SECURITIES
Issuer.................................... Hvide Capital Trust, a statutory
business trust created under the
laws of the State of Delaware.
Distributions............................. Distributions on the Preferred
Securities are cumulative from
June 27, 1997, the date of the
original issuance of the Preferred
Securities, and are payable at the
annual rate of 6 1/2% of the
liquidation preference of $50 per
Preferred Security.
Distributions are made quarterly
in arrears on January 1, April
1, July 1 and October 1 commencing
on October 1, 1997 when
and to the extent that funds of the
Issuer are available therefor.
The proceeds from the Original
Offering were invested in the
Debentures. Interest payment
periods on the Debentures are
quarterly but may be deferred from
time to time by Hvide for
periods of up to 20 consecutive
quarters, so long as no
Debenture Event of Default (as
defined herein) has occurred and
is continuing. The Issuer will not
make quarterly Distributions
on the Preferred Securities during
the period of any such
Extension Period. During any
Extension Period, interest on the
Debentures will continue to accrue
(and the amount of
Distributions to which holders of
the Preferred Securities are
6
<PAGE>
entitled will accumulate at the
stated rate per annum set forth
herein, compounded quarterly) and
holders of Preferred Securities
will be required to accrue interest
income for United States federal
income tax purposes. See
"Description of the
Debentures--Option to Extend
Interest Payment Period" and
"Certain Federal Income Tax
Consequences--Original Issue
Discount."
Distribution Deferral Provisions.......... Hvide has the right to defer
payment of interest on the
Debentures at any time or from
time to time for a period not
exceeding 20 consecutive quarters
with respect to each Extension
Period, provided that no Extension
Period may extend beyond
the stated maturity of the
Debentures. Upon the termination
of any such Extension Period and
the payment of all amounts then
due on any Interest Payment Date,
Hvide may elect to begin a
new Extension Period subject to
the requirements set forth
herein. If interest payments on
the Debentures are so deferred,
Preferred Securities will also be
deferred and Hvide will not be
permitted, subject to certain
exceptions set forth herein,
to declare or pay any cash
distributions with respect to
Hvide capital stock or
debt securities (including
guarantees of indebtedness for
borrowed money) that
rank pari passu with or junior to
the Debentures. See "Description of
the Debentures--Option to Extend
Interest Payment Period" and
"Certain Federal Income Tax
Consequences--Original Issue
Discount."
Liquidation Preference...................... $50 per Preferred Security,
and all accumulated and unpaid
Distributions.
Conversion into Hvide Class A
Common Stock........................Each Preferred Security is convertible
beginning September 25, 1997 and prior
to the maturity date of the Debentures
or, in the case of Preferred Securities
called for redemption, prior to the
close of business on the Business Day
(as defined herein) prior to the
Redemption Date (the "Conversion
Expiration Date") at the option of the
holder into shares of Hvide Class A
Common Stock at the rate of 1.7544
shares of Hvide Class A Common Stock for
each Preferred Security (equivalent to a
conversion price of $28.50 per share of
Hvide Class A Common Stock), subject to
adjustment in certain circumstances. A
holder of Preferred Securities wishing
to exercise its conversion right shall
surrender any or all of such Preferred
Securities, together with an irrevocable
conversion notice, to the Trustee as the
paying, conversion and exchange agent
acting on behalf of the holders of
Preferred Securities (in such capacity,
the "Conversion Agent"), which shall
exchange the Preferred Securities for a
portion (equal to the aggregate
liquidation preference of the Preferred
Securities being so converted) of the
Debentures held by the Issuer and
immediately convert such Debentures into
7
<PAGE>
Hvide Class A Common Stock. Except
possibly to the extent attributable to
accumulated and unpaid interest on the
Debentures, a holder should not
recognize gain or loss upon the exchange
through the Conversion Agent of the
Preferred Securities for a proportionate
share of the Debentures, followed
immediately by the conversion of the
Debentures into Hvide Class A Common
Stock. See "Certain Federal Income Tax
Consequences--Conversion of Preferred
Securities Into Hvide Class A Common
Stock."
Limitation on Ability to Exercise
Conversion Rights....................Inorder to maintain the eligibility of
Hvide to operate vessels in the U.S.
domestic trade, 75% of the outstanding
capital stock and voting power of Hvide
is required to be held by U.S. citizens.
As a result of this requirement, any
non-citizen holder of the Preferred
Securities or the Debentures will, to
the extent the conversion thereof into
shares of Hvide Class A Common Stock
would cause more than 25% of Hvide's
outstanding Common Stock to be held by
non-citizens, be unable to convert such
Preferred Securities or Debentures into
shares of Hvide Class A Common Stock and
will be required to sell its Preferred
Securities or Debentures to U.S.
citizens in order to realize the
economic benefits, if any, of
conversion. See "Risk
Factors--Restriction on Foreign
Ownership of Common Stock; Possible
Inability to Convert Preferred
Securities and Debentures."
Common Stock Voting Rights............Hvide's outstanding capital stock consists
of Class A Common Stock and Class B
Common Stock (together, the "Common
Stock"). Each holder of Class A Common
Stock is entitled to one vote per share
and each holder of Class B Common Stock
is entitled to ten votes per share on
all matters submitted to a vote of
stockholders. Except as required by law
and the Company's Articles of
Incorporation, holders of the Class A
Common Stock and the Class B Common
Stock vote together as a single class.
See "Description of Hvide Capital
Stock."
Redemption............................Except as provided below, the Preferred
Securities may not be redeemed by the
Issuer prior to July 2, 2000. If at any
time following the Conversion Expiration
Date, less than 5% of the Preferred
Securities remains outstanding, such
Preferred Securities shall be redeemable
at the option of the Issuer, in whole
but not in part, at a redemption price
of $50 per Preferred Security together
with accumulated and unpaid
Distributions thereon (whether or not
earned) through the date of redemption.
The Preferred Securities are subject to
mandatory redemption upon the repayment
at maturity or as a result of
acceleration of the Debentures. See
"Description of the Preferred
Securities--Declaration Events of
Default; Notice" and "-- Mandatory
Redemption."
8
<PAGE>
Special Event Exchange or
Redemption.......................Upon the occurrence of a Tax Event or an
Investment Company Event, the Issuer
Trustees (each as defined herein) shall
direct the Conversion Agent to exchange
all outstanding Preferred Securities for
Debentures and to terminate the Trust,
provided that, in the case of a Tax
Event, the Issuer Trustees shall have
the right to direct that less than all
of the Preferred Securities be so
exchanged if and for so long as Hvide
shall have elected to pay Additional
Sums (as defined herein) such that the
amounts received by the holders of
Preferred Securities that remain
outstanding are not reduced thereby and
shall not have revoked any such election
or failed to make such payments. Upon
the occurrence of a Tax Event, the
Debentures may be redeemed by Hvide on
or after July 2, 2000 at 100% of the
principal amount thereof, plus accrued
and unpaid interest thereon. In the
event the Debentures are redeemed by
Hvide, the Preferred Securities will be
redeemed by the Issuer Trustees at $50
per Preferred Security plus accumulated
and unpaid Distributions thereon
(whether or not earned) through the date
of Redemption. See "Description of the
Preferred Securities--Special Event
Exchange or Redemption."
Distribution of Debentures............At any time, Hvide has the right to
dissolve the Trust and, after
satisfaction of the liabilities of
creditors of the Trust as provided by
applicable law, cause the Debentures to
be distributed to the holders of the
Preferred Securities in liquidation of
the Trust. See "Description of the
Preferred Securities--Distribution of
Debentures."
Guarantee.............................Pursuant to the Guarantee, Hvide has
irrevocably agreed, on a subordinated
basis, to guarantee the payment in full
of (i) the Distributions payable by the
Issuer on the Preferred Securities, if
and to the extent the Issuer has funds
on hand available therefor, (ii) the
redemption price (including all
accumulated and unpaid Distributions) of
the Preferred Securities, to the extent
the Issuer has funds on hand available
therefor and (iii) payments on
liquidation with respect to the
Preferred Securities (unless the
Debentures are distributed to holders of
the Preferred Securities), to the extent
that there are assets of the Issuer
available for distribution to holders of
the Preferred Securities. A holder of
Preferred Securities may enforce Hvide's
obligations under the Guarantee directly
against Hvide, and Hvide waives any
right to require that an action be
brought against the Issuer or any other
person before proceeding against Hvide.
The Guarantee will constitute an
unsecured obligation of Hvide and will
rank subordinate and junior in right of
payment to all liabilities of Hvide and
pari passu with any guarantee now or
hereinafter entered into by Hvide in
respect of any preferred or preference
stock of any affiliate of Hvide. See
"Risk Factors--Ranking of Subordinate
Obligations Under the
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Guarantee and the Debentures" and
"--Structural Subordination" and
"Description of the Guarantee."
Voting Rights.........................Holders of Preferred Securities generally
have limited voting rights relating only
to the modification of the Preferred
Securities. Holders of Preferred
Securities are not entitled to vote to
appoint, remove or replace the Issuer
Trustees, which voting rights are vested
exclusively in Hvide as holder of the
Common Securities. The Issuer Trustees
and Hvide may amend the Declaration
without the consent of holders of
Preferred Securities to ensure that the
Issuer will be classified for United
States federal income tax purposes as a
grantor trust even if such action
adversely affects the interests of such
holders. See "Description of the
Preferred Securities--Voting Rights;
Amendment of the Declaration."
Debenture.............................The Debentures mature June 15, 2012 and
bear interest at the rate of 6 1/2% per
annum payable quarterly in arrears.
Hvide has the right from time to time to
select an interest payment period or
periods longer than one quarter (during
which period or periods interest will
compound quarterly), provided that no
such deferral of interest payments will
exceed 20 consecutive quarters and
provided further that no such deferral
of interest payments may extend beyond
the stated maturity of the Debentures.
Accordingly, Distribution payments on
the Preferred Securities may not be
deferred beyond the stated maturity of
the Debentures. If Hvide defers interest
payments longer than one quarter,
subject to certain exceptions, it will
be prohibited from paying dividends on
any of its capital stock and making
certain other restricted payments until
quarterly interest payments are resumed
and all accumulated and unpaid interest
on the Debentures is brought current.
Hvide has the right to make partial
payments of such interest during a
deferral of interest payments. The
Debentures are convertible into shares
of Hvide Class A Common Stock at the
option of the holders thereof at a
conversion rate of 1.7544 shares of
Hvide Class A Common Stock for each $50
in principal amount of Debentures
(equivalent to a conversion price of
$28.50 per share of Hvide Class A Common
Stock) subject to certain adjustments
set forth herein. The Issuer has
covenanted not to convert Debentures
except pursuant to a notice of
conversion delivered to the Conversion
Agent by a holder of Preferred
Securities.
In addition, on and after July 2, 2000,
the Debentures are redeemable at the
option of Hvide at any time, in whole or
in part, at the redemption prices set
forth herein, together with accrued and
unpaid interest to the date fixed for
redemption. See "Description of the
Debentures--Optional Redemption." The
Debentures are also redeemable, in whole
or in part, upon the occurrence and
continuation of a Tax Event.
See "Description
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of the Preferred Securities--Special Event
Exchange or Redemption."
The payment of the principal of and
interest on the Debentures is
subordinated in right of payment to all
Senior Debt of Hvide. As of June 30,
1997, Hvide had outstanding $38.8
million of Senior Debt. See "Risk
Factors--Ranking of Subordinate
Obligations Under the Guarantee and the
Debentures" and "--Structural
Subordination." While the Preferred
Securities are outstanding, the Issuer
will not have the right to amend the
Indenture (as defined herein) or the
terms of the Debentures in a manner that
adversely affects the holders of the
Preferred Securities or to waive a
Debenture Event of Default without the
consent of holders of at least a
majority in aggregate liquidation
preference of the Preferred Securities
and, in certain cases, the Common
Securities then outstanding. See
"Description of the
Debentures--Modification of Indenture."
Trading...............................The Preferred Securities are traded in the
PORTAL market. The Hvide Class A Common
Stock is traded on the Nasdaq National
Market under the symbol "HMAR."
Risk Factors..........................Prospective investors should carefully
consider certain risk factors relating
to an investment in the Offered
Securities. See "Risk Factors."
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<PAGE>
RISK FACTORS
Prospective purchasers of the Preferred Securities or Hvide Class A
Common Stock should carefully review the information contained elsewhere in this
Prospectus and should particularly consider the following matters.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND THE DEBENTURES
The obligations of Hvide under the Guarantee issued by Hvide for the
benefit of the holders of Preferred Securities are unsecured and rank
subordinate and junior in right of payment to all other liabilities of Hvide and
pari passu with any guarantee now or hereafter entered into by Hvide in respect
of any preferred or preference stock of any affiliate of Hvide. The obligations
of Hvide under the Debentures are subordinate and junior in right of payment to
all present and future Senior Debt. As of June 30, 1997, Hvide had outstanding
$38.8 million of Senior Debt (excluding accounts payable and accrued expenses,
deferred income taxes and other liabilities). The ability of the Issuer to pay
amounts due on the Preferred Securities is solely dependent upon Hvide making
payments on the Debentures as and when required. Neither the Indenture, the
Guarantee nor the Trust Agreement places any limitation on the amount of secured
or unsecured debt, including Senior Debt, that may be incurred by Hvide and its
subsidiaries. See "Description of the Guarantee--Status of the Guarantee" and
"Description of the Debentures--Subordination."
STRUCTURAL SUBORDINATION
The Debentures are obligations of Hvide exclusively. Since a
substantial portion of Hvide's operations are conducted through subsidiaries, a
significant portion of Hvide's cash flow and, consequently, its ability to
service debt, including the Debentures, is dependent upon the earnings of its
subsidiaries and the transfer of funds by those subsidiaries to Hvide in the
form of dividends or other transfers, supplemented with borrowings. The ability
of these subsidiaries to pay dividends to Hvide in the future is subject to
restrictions contained in indentures and other financing agreements by which
such subsidiaries are bound. See "--Restrictive Covenants Under Hvide Credit
Facility."
In addition, creditors of Hvide's subsidiaries would be entitled to a
claim on the assets of such subsidiaries prior to any claims by Hvide.
Consequently, in the event of a liquidation or reorganization of any subsidiary,
creditors of such subsidiary are likely to be paid in full before any
distribution is made to Hvide, except to the extent that Hvide itself is
recognized as a creditor of such subsidiary, in which case the claims of Hvide
would still be subordinate to any security interest in the assets of such
subsidiary and any indebtedness of such subsidiary senior to that held by Hvide.
As of June 30, 1997, the aggregate indebtedness (excluding accounts payable and
accrued expenses, deferred income taxes and other liabilities) of the
consolidated subsidiaries of Hvide was approximately $38.8 million. See
"Description of the Preferred Securities--Distributions" and "Description of the
Debentures--Option to Extend Interest Payment Period."
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES; TRADING PRICE
So long as there is no continuing event of default under the
Debentures, Hvide has the right under the Indenture to defer the payment of
interest on the Debentures at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no
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<PAGE>
Extension Period may extend beyond the stated maturity of the Debentures. Upon
the termination of any Extension Period and the payment of all amounts then due,
Hvide may select a new Extension Period and terminate the payments of all
amounts then due, subject to the requirements described herein. As a consequence
of any such deferral, quarterly Distributions on the Preferred Securities by the
Issuer will be deferred (and the amount of Distributions to which holders of the
Preferred Securities are entitled will accumulate additional Distributions)
during any such Extension Period.
During any Extension Period, holders of Preferred Securities will
continue to accrue income (in the form of original issue discount) in respect of
their pro rata share of the deferred interest allocable to the Debentures held
by the Issuer for United States federal income tax purposes. As a result, a
holder of Preferred Securities will include such income in gross income for
United States federal income tax purposes in advance of the receipt of cash, and
will not receive the cash related to such income from the Issuer if the holder
disposes of the Preferred Securities prior to the record date for the payment of
Distributions. See "Certain Federal Income Tax Consequences--Original Issue
Discount." Moreover, if a holder of Preferred Securities converts its Preferred
Securities into Hvide Class A Common Stock during an Extension Period, the
holder will not receive any cash related to the deferred distribution. See
"Description of the Preferred Securities--Distributions."
Although Hvide has no current intention of exercising its right to
defer payments of interest by extending the interest payment period on the
Debentures, should Hvide elect to exercise such right in the future, the market
price of the Preferred Securities is likely to be adversely affected. A holder
that disposes of its Preferred Securities during an Extension Period, therefore,
might not receive the same return on its investment as a holder that continues
to hold its Preferred Securities. In addition, as a result of the existence of
Hvide's right to defer interest payments, the market price of the Preferred
Securities (which represent preferred undivided beneficial interests in the
Debentures) may be more volatile than the market prices of other securities on
which original issue discount accrues that are not subject to such deferrals.
SPECIAL EVENT EXCHANGE OR REDEMPTION
Upon certain circumstances following the occurrence and continuation of
a Special Event (as defined herein), the Preferred Securities are also subject
to (i) exchange in whole or in part, in the manner described herein, for the
Debentures and termination of the Trust or (ii) redemption in whole or in part,
on or after July 2, 2000 in the case of a Tax Event. See "Description of the
Preferred Securities--Special Event Exchange or Redemption."
There can be no assurance as to the market prices for Preferred
Securities or Debentures that may be distributed in exchange for Preferred
Securities if a liquidation of the Issuer occurs or if the Preferred Securities
are exchanged for Debentures in connection with a Special Event. Accordingly,
the Preferred Securities that an investor may purchase or the Debentures that a
holder of Preferred Securities may receive on liquidation of the Issuer may
trade at a discount to the price that the investor paid to purchase the
Preferred Securities offered hereby. Because holders of Preferred Securities may
receive Debentures on dissolution of the Issuer or if the Preferred Securities
are exchanged for Debentures in connection with a Special Event, prospective
purchasers of Preferred Securities are also making an investment decision with
respect to the Debentures
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<PAGE>
and should carefully review all the information regarding the Debentures
contained herein. See "Description of the Preferred Securities--Special Event
Exchange or Redemption" and "Description of the Debentures--General."
LIMITED RIGHTS UNDER THE GUARANTEE
Hvide's guarantee of payments of Distributions on the Preferred
Securities, of payment of the redemption price of any Preferred Securities
called for redemption, and of payment of the liquidation preference of the
Preferred Securities upon liquidation of the Trust is limited to the extent that
the Trust has funds on hand available for such payment and, in the case of
liquidation, to the assets of the Trust available for distribution.
If Hvide were to default on its obligation to pay amounts payable under
the Debentures, the Issuer would lack funds for the payment of Distribution or
amounts payable on redemption of the Preferred Securities or otherwise, and, in
such event, holders of the Preferred Securities would not be able to rely upon
the Guarantee for payment of such amount. Instead, in the event a Debenture
Event of Default shall have occurred and be continuing, a holder of Preferred
Securities would be required to rely on its enforcement by the Trustee of its
rights as registered holder of the Debenture against Hvide pursuant to the terms
of the Indenture and the Debentures. If, however, such event is attributable to
the failure of Hvide to pay interest on or principal of the Debentures on the
payment date on which such payment is due and payable, then a holder of
Preferred Securities may directly institute a proceeding against Hvide for
enforcement of payment to such holder of the interest on or principal of such
Debentures having a principal amount equal to the aggregate liquidation
preference of the Preferred Securities of such holder (a "Direct Action"). In
connection with such Direct Action, Hvide will be subrogated to the rights of
such holder of Preferred Securities under the Declaration to the extent of any
payment made by Hvide to such holder of Preferred Securities in such Direct
Action. Except as set forth herein, holders of Preferred Securities will not be
able to exercise directly any other remedy available to the holders of
Debentures or assert directly any other rights in respect of the Debentures. See
"Description of the Preferred Securities--Enforcement of Certain Rights by
Holders of Preferred Securities," "Description of the Guarantee" and
"Description of the Debentures--Debenture Events of Default." The Declaration
provides that each holder of Preferred Securities by acceptance thereof agrees
to the provisions of the Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of the Preferred Securities have limited voting rights. The
voting rights that they have are primarily limited to directing the activities
of the Trustee as the holder of the Debentures. Holders of the Preferred
Securities are not entitled to vote to appoint, remove or replace the Issuer
Trustee, which voting rights are vested exclusively in Hvide. The Issuer
Trustees and Hvide may amend the Declaration without the consent of holders of
Preferred Securities to ensure that the Issuer will be classified for United
States federal income tax purposes as a grantor trust even if such action
adversely affects the interests of such holders. See "Description of the
Preferred Securities--Voting Rights; Amendment of the Declaration."
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<PAGE>
PROPOSED TAX LEGISLATION
As a part of President Clinton's Fiscal 1998 Budget Proposal, the
Treasury Department proposed legislation that, among other things, would have
treated as equity for United States federal income tax purposes certain debt
instruments that are not shown as indebtedness on the consolidated balance sheet
of the issuer. Although this proposal was not included in the tax legislation
ultimately enacted, there can be no assurance that such a proposal will not be
enacted in the future, that such future legislation would not have a retroactive
effective date and that such future legislation would not prevent Hvide from
deducting interest on the Debentures. Such an event would constitute a Tax Event
and would permit the Issuer to exchange the Preferred Securities, in whole or in
part, for the Debentures or redeem, in whole or in part, the Preferred
Securities and Debentures.
POTENTIAL REDUCTION OF PAYMENTS TO NON-UNITED STATES HOLDERS FOR UNITED STATES
TAX WITHHOLDING REQUIREMENTS
In the event that any United States taxes, duties or other governmental
charges are required to be deducted or withheld from any payments by Hvide to
holders of Preferred Securities that are Non-U.S. Persons, neither Hvide nor the
Issuer will be required to pay any additional amounts to such holders and,
therefore, any such taxes, duties or charges will reduce the amounts received by
such holders. See "Certain Federal Income Tax Consequences--Certain United
States Tax Consequences to Non-United States Holders."
ABSENCE OF PUBLIC MARKET FOR THE PREFERRED SECURITIES
Although the Preferred Securities are currently traded in the PORTAL
market, there can be no assurance that such market will continue to be
maintained. If an active market for the Preferred Securities fails to be
sustained, the trading price of the Preferred Securities could be adversely
affected.
TRADING PRICE OF PREFERRED SECURITIES
The Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the underlying
Debentures. A holder disposing of Preferred Securities between record dates for
payments of distributions thereon will be required for United States federal
income tax purposes to include accrued but unpaid interest on the Debentures
through the date of disposition in income as ordinary income (i.e., original
issue discount), and to add such amount to the adjusted tax basis in the
holder's Preferred Securities. To the extent the selling price is less than the
holder's adjusted tax basis (which will include, in the form of original issue
discount, all accrued but unpaid interest), a holder will recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences--Sales of Preferred Securities."
RESTRICTIVE COVENANTS UNDER HVIDE CREDIT FACILITY
The terms of the Company's Credit Facility (as defined herein) (i)
require the Company to meet certain financial tests, including tests requiring
the maintenance of minimum interest coverage ratios, leverage ratios, levels of
liquidity, and cash flow ratios; (ii) require the Company to maintain certain
levels of collateral securing amounts outstanding under the Credit Facility;
(iii) limit the incurrence of
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<PAGE>
additional indebtedness; (iv) limit purchases of capital equipment and other
capital expenditures; (v) restrict payments, including dividends, with respect
to shares of any class of capital stock; and (vi) limit certain corporate acts
of the Company, such as incurring debt, creating liens, and entering into
certain types of business transactions, including mergers and joint ventures.
Such provisions could adversely affect the Company's ability to pursue its
strategy of growth through acquisitions. Borrowings under the Credit Facility
constitute Senior Debt for purposes of the Indenture.
POTENTIAL LOSS OF JONES ACT PROTECTION
Most of the Company's operations are conducted in the U.S. domestic
trade, which, by virtue of the U.S. coastwise laws (often referred to as the
"Jones Act"), is restricted to vessels built in the United States, owned and
crewed by U.S. citizens, and registered under U.S. law. There have been repeated
attempts to repeal the coastwise laws, and efforts to effect such repeal are
expected to continue in the future. The Company is already subject to vigorous
competition and potential additional competition in all aspects of its
operations, including competition by companies with financial resources greater
than those of the Company which could be committed to the construction of new
vessels in excess of market requirements. Repeal of the coastwise laws would
result in additional competition from vessels built in lower-cost foreign
shipyards and manned by foreign nationals accepting lower wages than U.S.
citizens and could have a material adverse effect on the Company.
HAZARDOUS ACTIVITIES
The operation of ocean-going vessels carries an inherent risk of
catastrophic marine disasters and property losses caused by adverse weather
conditions, mechanical failures, human error, and other circumstances or events.
In addition, the transportation of petroleum and toxic chemicals is subject to
the risk of spills and environmental damage. Any such event could have a
material adverse effect on the Company. While the Company carries insurance to
protect against most of the accident-related risks involved in the conduct of
its business, including environmental damage and pollution insurance coverage,
there can be no assurance that all risks are adequately insured against, that
any particular claim will be paid, or that the Company will be able to procure
adequate insurance coverage at commercially reasonable rates in the future. In
particular, more stringent environmental regulations may result in increased
costs for, or the lack of availability of, insurance against the risks of
environmental damage or pollution.
CYCLICAL INDUSTRY CONDITIONS
Historically, the marine support and transportation services industry
has been cyclical, with corresponding volatility in profitability and vessel
values. This industry cyclicality has been due to changes in the level of
general economic growth as well as changes in the supply of and demand for
vessel capacity, which impact charter rates and vessel values. The supply of
vessels is influenced by the numbers of vessels constructed and retired and by
government and industry regulation of maritime transportation practices. The
Company's offshore energy support services and offshore and harbor towing
services are dependent upon the levels of activity in offshore oil and natural
gas exploration, development, and production. Such activity levels are affected
by both short- and long-term trends in world oil and natural gas prices.
Utilization of the Company's towboat and fuel barge fleet is also partly
dependent on such prices as well as energy utilization, which is partly a
function of the weather. In recent years, oil and natural gas prices, and
therefore the level of offshore drilling and exploration
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<PAGE>
activity, have been extremely volatile. Any future prolonged decline in natural
gas or oil prices will, in all likelihood, depress the level of offshore
exploration and development activity and result in a corresponding decline in
the demand for the services provided by the Company's offshore energy support
vessels, and any sustained reduction in such activity could have a material
adverse effect on the Company. In addition, marine support and transportation
services are dependent on general economic conditions. Any general economic
slowdown could have an adverse effect on the level of the provision of those
services and therefore upon the Company.
ENVIRONMENTAL RISK AND REGULATIONS
Current laws and regulations could impose substantial liability on the
Company for damages, remediation costs, and penalties associated with oil or
hazardous-substance spills or other discharge into the environment involving the
Company's vessel operations. Shoreside industrial operations, including a small
marine maintenance and drydocking facility owned and operated by the Company,
are also subject to federal, state, and local environmental laws and
regulations. Amendment of these laws and regulations to impose more stringent
requirements would likely result in increased maintenance and operating
expenses. In addition, the Oil Pollution Act of 1990 ("OPA 90") requires tanker
owners and operators to establish and maintain with the U.S. Coast Guard
evidence of financial responsibility, as demonstrated by a certificate of
financial responsibility ("COFR"), with respect to potential oil spill
liability, which the Company and most of its competitors currently satisfy by
virtue of self-insurance or third-party insurance. Additional laws and
regulations may be adopted that could limit the ability of the Company to do
business or increase the cost of its doing business and could have a material
adverse effect on its operations.
MANDATED REMOVAL OF VESSELS FROM JONES ACT TRADE
OPA 90 establishes a phase-out schedule, depending upon vessel size and
age, for single-hull vessels carrying crude oil and petroleum products which, in
the case of the Company's petroleum products carrier (Seabulk Challenger) and
five chemical carriers (HMI Astrachem, Seabulk Magnachem, HMI Dynachem, HMI
Petrochem and Seabulk America), are the years 2003, 2000, 2007, 2011, 2011, and
2015, respectively; and in the case of its fuel barges is the year 2015. As a
result of this requirement, these vessels will be prohibited from transporting
petroleum products in U.S. waters after their respective phase-out dates. There
can be no assurance that future tanker market rates will be sufficient to
support construction of replacement vessels. Although the Company's remaining
vessels are not subject to mandatory retirement, and the Company employs what it
believes to be a rigorous maintenance program for all its vessels, there can be
no assurance that the Company will be able to maintain its fleet by extending
the economic lives of existing vessels or acquiring new or used vessels.
RISKS OF INTERNATIONAL OPERATIONS
The Company derives revenues from international operations. The Company
currently operates 41 vessels in international waters, including the Arabian
Gulf and the waters offshore Southeast Asia, Egypt and Cameroon. Risks
associated with operating in international markets include vessel seizure,
foreign exchange restrictions and currency fluctuations, foreign taxation,
political instability, foreign and domestic monetary and tax policies,
expropriation, nationalization, nullification, modification or renegotiation of
contracts, war and civil disturbances or other risks that may limit or disrupt
markets. Additionally, the ability of the Company to compete in the
international marine support and transportation
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<PAGE>
market may be adversely affected by foreign government regulations that favor or
require the awarding of such contracts to local persons, or by regulations
requiring foreign persons to employ citizens of, or purchase supplies from, a
particular jurisdiction. Furthermore, the Company's foreign subsidiaries may
face governmentally imposed restrictions from time to time on their ability to
transfer funds to the Company. No predictions can be made as to what foreign
governmental regulations may be applicable to the Company's operations in the
future.
RISK OF LOSS AND INSURANCE
The business of the Company is affected by a number of risks, including
the mechanical failure of its vessels, collisions, vessel loss or damage, cargo
loss or damage, hostilities, and labor strikes. In addition, the operation of
any vessel is subject to the inherent possibility of a catastrophic marine
disaster, including oil, fuel, or chemical spills and other environmental
mishaps, as well as other liabilities arising from owning and operating vessels.
Any such event may result in loss of revenues and increased costs and other
liabilities. Although the Company's losses from such hazards have not
historically exceeded its insurance coverage, there can be no assurance that
this will continue to be the case.
OPA 90, by imposing virtually unlimited liability upon vessel owners,
operators, and certain charterers for certain oil pollution accidents in the
United States, has made liability insurance more expensive and has also prompted
insurers to consider reducing available liability coverage. While the Company
maintains insurance, there can be no assurance that all risks are adequately
insured against particularly in light of the virtually unlimited liability
imposed by OPA 90, that any particular claim will be paid, or that the Company
will be able to procure adequate insurance coverage at commercially reasonable
rates in the future. Because it maintains mutual insurance, the Company is
subject to funding requirements and coverage shortfalls in the event claims
exceed available funds and reinsurance and to premium increases based on prior
loss experience. Any such shortfalls could have a material adverse impact on the
Company.
RESTRICTION ON FOREIGN OWNERSHIP OF COMMON STOCK; POSSIBLE INABILITY TO CONVERT
PREFERRED SECURITIES AND DEBENTURES
In order to maintain the eligibility of the Company to operate vessels
in the U.S. domestic trade, 75% of the outstanding capital stock and voting
power of the Company is required to be held by U.S. citizens. Although the
Company's Articles of Incorporation contain provisions limiting non-citizen
ownership of its capital stock (see "Description of Hvide Capital Stock--Foreign
Ownership Restrictions"), the Company could lose its ability to conduct
operations in the U.S. domestic trade if such provisions prove unsuccessful in
maintaining the required level of citizen ownership. Such loss would have a
material adverse effect on the Company. See "Description of Hvide Capital
Stock."
As a result of this limitation upon the non-citizen ownership of the
Company's outstanding capital stock, any non-citizen holder of the Preferred
Securities will, to the extent such conversion would cause more than 25% of the
Company's outstanding Common Stock held by non-citizens, be unable to convert
its Preferred Securities or Debentures into shares of Hvide Class A Common Stock
and will be required to sell its Preferred Securities or Debentures to U.S.
citizens in order to realize the economic benefits, if any, of conversion.
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RISKS OF ACQUISITION STRATEGY
As the marine support and transportation market continues to
consolidate, a key component of the Company's business strategy is to pursue
selected acquisitions of complementary assets and businesses. Since 1994, the
Company has completed a number of significant acquisitions. Possible future
acquisitions may be for purchase prices significantly higher than those paid for
recent and pending acquisitions. Certain risks are inherent in an acquisition
strategy, such as increasing leverage and debt service requirements, which could
adversely affect the Company's operating results. The success of any completed
acquisition will depend in part on the Company's ability to integrate
effectively the acquired business into the Company. The process of integrating
such acquired businesses may involve unforeseen difficulties and may require a
disproportionate amount of management's attention and the Company's financial
and other resources. No assurance can be given that the Company will be able to
continue to identify additional suitable acquisition opportunities, negotiate
acceptable terms, obtain financing for acquisitions on satisfactory terms or
successfully acquire identified targets. The Company's failure to achieve
consolidation savings, to incorporate the acquired businesses and assets into
its existing operations successfully or to minimize any unforeseen operational
difficulties could have a material adverse effect on the Company.
LEGAL PROCEEDINGS
The Company's chemical carrier Seabulk America is the subject of a
pending legal proceeding which, if determined adversely to the Company, could
have a material adverse effect on the Company.
KEY PERSONNEL
The Company is materially dependent upon the continued services of key
members of its management, including its Chairman, President, and Chief
Executive Officer, J. Erik Hvide. The loss of one or more key members of
management could have a material adverse effect on the Company.
POSSIBLE VOLATILITY OF STOCK PRICE
There may be significant volatility in the market price for the
Company's Class A Common Stock. Quarterly operating results of the Company,
changes in general conditions in the economy, the financial markets, or the
marine support and transportation services industry, or other developments
affecting the Company or its competitors, could cause the market price of the
Company's Class A Common Stock to fluctuate substantially. In addition, in
recent years, the stock market and, in particular, the marine support and
transportation services industry segment, has experienced significant price and
volume fluctuations. This volatility has affected the market prices of
securities issued by many companies for reasons unrelated to their operating
performance. In addition, the Company's operating results in future periods may
be below the expectations of securities analysts and investors. In such event,
the price of the Class A Common Stock would likely decline, perhaps
substantially.
CONTROL BY CURRENT STOCKHOLDERS; SHAREHOLDERS AGREEMENT; RESTRICTIONS ON
CORPORATE ACTIONS; ANTI-TAKEOVER EFFECT OF DUAL CLASSES OF STOCK AND CERTAIN
OTHER PROVISIONS
The Company's Common Stock is divided into Class A Common Stock, of
which each share is entitled to one vote with respect to all matters submitted
to stockholder vote, and Class B Common Stock,
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of which each share is entitled to ten votes with respect to such matters. J.
Erik Hvide, the Company's Chairman, together with certain trusts of which he is
the trustee (the "Hvide Trusts"), beneficially own 10,000 shares of Class A
Common Stock and 1,531,466 shares of Class B Common Stock, and a group of
investors (the "Investor Group"), which in September 1994 purchased shares of
Common Stock, Common Stock Contingent Share Issuances (as defined herein) and
certain of the Company's debt securities, beneficially owns 639,439 shares of
Class A Common Stock and 1,468,522 shares of Class B Common Stock. Mr. Hvide
(together with the Hvide Trusts) and the Investor Group therefore own shares
that represent 10.1% and 13.9%, respectively, of the outstanding shares of
Common Stock and each owns shares representing 36.3% of the voting power of all
Common Stock. Accordingly, Mr. Hvide and the Investor Group, acting together,
are able to elect a majority of the Company's directors and to determine the
disposition of all matters submitted to a vote of the Company's stockholders.
There is a dispute between Mr. Hvide and the Investor Group which, depending
upon its resolution, could result in a decrease in the number of shares of
Common Stock beneficially owned by Mr. Hvide and the Hvide Trusts, an increase
in the number of shares of Common Stock beneficially owned by the Investor
Group, and a decrease in the combined voting power of Mr. Hvide and the Investor
Group. See "Description of Hvide Capital Stock--Contingent Share Issuance
Agreement."
In addition, the Hvide Family (as defined herein) and the Investor
Group have entered into an agreement giving them the right to nominate eight and
up to three persons, respectively, to the Company's Board of Directors. Each
share of Class B Common Stock is convertible by its holder into one share of
Class A Common Stock at any time, and automatically converts into Class A Common
Stock if held by persons other than the Hvide Family and members of the Investor
Group. See "Description of Hvide Capital Stock--Certain Provisions of Articles
of Incorporation and Bylaws." In addition, so long as the Investor Group owns
specified percentages of the outstanding Class B Common Stock, certain
significant transactions will require the approval of 95%, and the appointment
of a new chief executive officer will require approval of 75%, of the holders of
the Class B Common Stock. See "Description of Hvide Capital Stock--Certain
Provisions of Articles of Incorporation and Bylaws."
Such control by Mr. Hvide and the Investor Group may also have the
effect of discouraging certain types of transactions involving an actual or
potential change of control of the Company, including transactions in which the
holders of Class A Common Stock might otherwise receive a premium for their
shares over then-current market prices. In addition, pursuant to the Company's
Articles of Incorporation, the Board of Directors is divided into three classes
of directors serving staggered three-year terms and, consequently, it would
likely require two annual meetings rather than one for the stockholders to
replace a majority of the Board of Directors.
SHARES ELIGIBLE FOR FUTURE SALE
Sales of substantial amounts of Class A Common Stock in the public
market, or the perception that such sales may occur, could have an adverse
effect on the market price of the stock. All of the shares of Class B Common
Stock owned by Mr. Hvide, the Hvide Trusts, and the Investor Group are currently
eligible for public sale (Class B Common Stock is freely convertible, share for
share, into Class A Common Stock), subject to volume and other limitations of
Rule 144 under the Securities Act. The Company has granted the Investor Group
certain registration rights under the Securities Act with respect to the Common
Stock owned by them. See "Description of Hvide Capital Stock--Shareholders
Agreement" and "--Contingent Share Issuance Agreement." Certain directors,
officers, and employees of the Company hold options to purchase 827,325 shares
of Class A Common Stock. In addition, the
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<PAGE>
Company has granted the sellers of certain vessels acquired by the Company
certain registration rights with respect to the 141,760 shares of Class A Common
Stock issued to them in connection with the acquisition of those vessels.
Moreover, the Company may issue shares of Common Stock in connection with future
acquisitions.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange
Commission (the "Commission") are incorporated by reference into this
Prospectus:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
(ii) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997;
(iii) the Company's Current Report on Form 8-K filed June 9, 1997 and
amended by Form 8- K/A dated June 26, 1997;
(iv) the description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A filed under the Exchange Act and
any amendments or reports filed for the purpose of updating such description;
and
(v) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the Offered Securities shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such documents. See "Available Information."
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained in this Prospectus, or in any other
subsequently filed document that is also incorporated herein by reference,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Prospectus except as
so modified or superseded.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated into this Prospectus by reference,
other than exhibits to such documents. Requests for such copies should be
directed to Investor Relations, Hvide Marine Incorporated, 2200 Eller Drive,
Fort Lauderdale, Florida 33316, telephone
number (954) 523-2200.
FORWARD-LOOKING INFORMATION
Certain statements and information discussed under "Risk Factors," and
elsewhere in this Prospectus and the documents incorporated herein by reference
constitute forward-looking statements within the meaning of the Federal Private
Securities Litigation Reform Act of 1995. Such statements are
21
<PAGE>
subject to certain risks, uncertainties, or assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated,
or projected. Among the key factors that may have a direct bearing on the
Company's results and financial condition are: (i) competitive factors in the
marine support and transportation industry in which the Company competes, (ii)
fluctuations in oil and gas prices, (iii) environmental liabilities to which the
Company may become subject in the future which are not covered by an indemnity
or insurance, (iv) the impact of current and future laws and governmental
regulations (particularly coastwise and environmental laws and regulations)
affecting the marine support and transportation industry in general and the
Company's operations in particular, (v) risks relating to the Company's high
leverage position and potential inability to service its debt, (vi) risks
related to the mandated removal of the Company's vessels from the Jones Act
trade, (vii) risks related to the Company's reliance on significant customers,
and (viii) risks related to the outcome of pending legal proceedings. Such
statements speak only as of the date of the document in which they are made. The
Company expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any such statements to reflect any change in its
expectations with respect thereto or any change in events, conditions, or
circumstances on which any such statement is based.
HVIDE CAPITAL TRUST
Hvide Capital Trust is a statutory business trust formed under Delaware
law pursuant to (i) a declaration of trust (the "Declaration") executed by
Hvide, as sponsor of the Trust, and the trustees of the Issuer (the "Issuer
Trustees") and (ii) the filing of a certificate of trust with the Secretary of
State of the State of Delaware. The Company holds Common Securities in an
aggregate liquidation amount equal to 3.0% of the total capital of the Issuer.
The Common Securities rank pari passu, and payment is made thereon pro rata,
with the Preferred Securities, except that, upon the occurrence and during the
continuance of an event of default under the Declaration, the rights of the
holders of the 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 Preferred Securities. The assets of the Trust
consist principally of the Debentures. The Issuer exists for the exclusive
purpose of (i) issuing the Preferred Securities and Common Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of the Preferred Securities and Common Securities
in the Debentures and (iii) engaging in only those other activities necessary or
incidental thereto.
Pursuant to the Declaration, the number of Issuer Trustees currently is
five. Three of the Issuer Trustees (the "Company Trustees") are individuals who
are employees or officers of or who are affiliated with Hvide. The fourth Issuer
Trustee is a financial institution that is unaffiliated with Hvide (the
"Trustee"). The fifth Issuer Trustee is an entity that maintains its principal
place of business in the State of Delaware (the "Delaware Trustee"). Currently,
The Bank of New York, a New York banking corporation, is the Trustee, and its
affiliate, The Bank of New York (Delaware), a Delaware banking corporation, is
the Delaware Trustee until, in each case, removed or replaced by the Company
Trustees. The Bank of New York also acts as indenture trustee under the
Guarantee (the "Guarantee Trustee") and under the Indenture (the "Indenture
Trustee"). See "Description of the Guarantee" and "Description of the Preferred
Securities."
The Trustee holds title to the Debentures for the benefit of the
holders of the Preferred Securities and has the power to exercise all rights,
powers and privileges under the Indenture as the holder of the Debentures. In
addition, the Trustee maintains exclusive control of a segregated non-interest
bearing
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<PAGE>
bank account (the "Property Account") to hold all payments made in respect of
the Debentures for the benefit of the holders of Preferred Securities. Hvide, as
the direct or indirect holder of all of the Common Securities, has the right to
appoint, remove or replace any of the Issuer Trustees and to increase or
decrease the number of Issuer Trustees, provided that the number of Issuer
Trustees shall be at least three, the majority of which shall be Company
Trustees. Hvide paid all fees and expenses related to the Trust and the Original
Offering. See "Description of the Debentures."
The rights of the holders of the Preferred Securities, including
economic rights, rights to information and voting rights, if any, are as set
forth in the Declaration and the Delaware Business Trust Act, as amended (the
"Trust Act"). See "Description of the Preferred Securities." The Declaration,
the Indenture and the Guarantee also incorporate by reference the terms of the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). It is
expected that, at the time the registration statement of which this Prospectus
is part becomes effective, the Declaration, the Indenture and the Guarantee will
be qualified under the Trust Indenture Act. The Trustee will act as Indenture
Trustee for the Debentures under the Declaration for purposes of complying with
the Trust Indenture Act.
The place of business and telephone number of the Trust are the
principal executive offices and telephone number of Hvide. See "The Company."
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<PAGE>
THE COMPANY
Hvide (pronounced "vee-dah") provides marine support and transportation
services in the U.S. domestic trade and in selected international markets
principally to the energy and chemical industries. The Company is the third
largest operator of supply and crew boats in the U.S. Gulf of Mexico and, as a
result of a May 1997 acquisition, is one of the largest operators of offshore
energy support vessels in the Arabian Gulf. In addition, the Company is the sole
provider of commercial tug services in Port Everglades and Port Canaveral,
Florida, and a leading provider of such services in Mobile, Alabama. The Company
also transports petroleum products and specialty chemicals in the U.S. domestic
trade, a market insulated from international competition under the Jones Act. In
addition, the Company has a 2.4% interest, and options to acquire up to an
additional 72.6% interest, in five double-hull petroleum product carriers
currently under construction for delivery during 1998 and 1999.
Recent Developments. [add information on pending acquisitions if appropriate.]
The Company's principal office is located at 2200 Eller Drive, Fort
Lauderdale, Florida 33316, and its telephone number is (954) 523-2200.
USE OF PROCEEDS
The Selling Holders will receive all of the proceeds from any sale of
the Offered Securities. Neither the Company nor the Trust will receive any
proceeds therefrom.
ACCOUNTING TREATMENT
The financial statements of the Issuer are included in the consolidated
financial statements of Hvide with the Preferred Securities shown on such
consolidated financial statements as "Company-obligated mandatory redeemable
preferred securities issued by a consolidated subsidiary." The sole assets of
the Issuer will be the 6 1/2% Convertible Subordinated Debentures due 2012.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges on a historical basis for each of the five fiscal years in the period
ended December 31, 1996 and for the six months ended June 30, 1996 and 1997.
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
1992 1993 1994 1995 1996 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings
to Fixed Charges (1)........................ 1.04 1.74 1.02 --(2) 1.67 1.00 4.23
</TABLE>
(1) The ratio of earnings to fixed charges is computed by dividing the
Company's pre tax income from continuing operations adjusted for fixed
charges less preferred stock dividends and minority interest in the income
or loss of majority owned subsidiaries, divided by fixed charges. Fixed
charges include interest, amortization of debt expense and discount and
preferred stock dividends.
(2) Earnings were not able to cover fixed charges by $499,000 for the year
ended December 31, 1995.
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<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
This summary of certain provisions of the Preferred Securities and the
Declaration does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all the provisions of the Declaration (a copy
of which has been filed as an exhibit to the registration statement of which
this Prospectus is part), the Trust Act and the Trust Indenture Act which is
incorporated by reference in the Declaration. Wherever particular defined terms
of the Declaration are referred to herein, such defined terms are incorporated
herein by reference.
GENERAL
Pursuant to the terms of the Declaration, the Issuer Trustees, on
behalf of the Issuer, issued the Preferred Securities and the Common Securities.
The Preferred Securities represent preferred undivided beneficial interests in
the assets of the Issuer and the Common Securities represent common undivided
beneficial interests in the assets of the Issuer. All of the Common Securities
are owned by Hvide. The Preferred Securities rank pari passu, and payments are
made thereon pro rata, with the Common Securities except as described under
"--Subordination of Common Securities." Legal title to the Debentures are held
by the Trustee in trust for the benefit of the holders of the Preferred
Securities and Common Securities. The Declaration does not permit the issuance
by the Issuer of any securities other than the Preferred Securities and the
Common Securities or the incurrence of any indebtedness by the Issuer. The
payment of Distributions out of money held by the Issuer, and payments upon
redemption of the Preferred Securities or liquidation of the Issuer, are
guaranteed by Hvide to the extent described under "Description of the
Guarantee." The Guarantee is held by The Bank of New York, as the Guarantee
Trustee, for the benefit of the holders of the Preferred Securities. The
Guarantee does not cover payment of Distributions when the Issuer does not have
sufficient available funds to pay such Distributions. The remedy of a holder of
Preferred Securities in such an event is as described herein in "--Voting
Rights; Amendment of the Declaration."
DISTRIBUTIONS
Distributions on the Preferred Securities are payable at the annual
rate of 6 1/2% of the liquidation preference of $50 per Preferred Security.
Distributions will accumulate from the date of the original issuance of the
Preferred Securities and will be payable quarterly in arrears on January 1,
April 1, July 1 and October 1 of each year on the applicable record date,
commencing October 1, 1997 when, as and if available for payment by the Trustee,
except as otherwise described below. The amount of Distributions payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which Distributions are payable on the Preferred
Securities is not a Business Day, the payment of the Distributions payable on
such date will be made on the next succeeding day that is a Business Day and
without any additional Distributions or other payment in respect of any such
delay, except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such record date (each
date on which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). A "Business Day" shall mean any day other than a Saturday
or a Sunday, or a day on which banking institutions in the City of New York are
authorized or required by law or executive order to remain closed or a day on
which the corporate trust office of the Trustee or the Indenture Trustee is
closed for business.
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<PAGE>
So long as no Debenture Event of Default has occurred and is
continuing, Hvide has the right under the Indenture to defer the payment of
interest on the Debentures at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the stated maturity of the
Debentures. As a consequence of any such election, quarterly Distributions on
the Preferred Securities will be deferred by the Issuer during any such
Extension Period. Distributions to which holders of the Preferred Securities are
entitled will accumulate additional Distributions thereon at the rate per annum
set forth herein, compounded quarterly from the relevant payment date for such
Distributions. The term "Distributions" as used herein shall include any such
additional Distributions. During any such Extension Period, Hvide may not, and
may not cause any of its subsidiaries to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of Hvide's capital stock or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees of indebtedness for money borrowed) of
Hvide that rank pari passu with or junior to the Debentures (other than with
respect to both (i) and (ii)) (a) any dividend, redemption, liquidation,
interest, principal or guarantee payment by Hvide where the payment is made by
way of securities (including capital stock) that rank pari passu with or junior
to the securities on which such dividend, redemption, interest, principal or
guarantee payment is being made, (b) payments under the Guarantee, (c) purchases
of Hvide Class A Common Stock related to the issuance of Hvide Class A Common
Stock under any of Hvide's benefit plans for its directors, officers or
employees, (d) as a result of a reclassification of Hvide's capital stock or the
exchange or conversion of one series or class of Hvide's capital stock for
another series or class of Hvide's capital stock, and (e) the purchase of
fractional interests in shares of Hvide's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged). Prior to the termination of any such Extension Period,
Hvide may further extend the interest payment period, provided that no Extension
Period may exceed 20 consecutive quarters or extend beyond the stated maturity
of the Debentures. Upon the termination of any such Extension Period and the
payment of all amounts then due on any Interest Payment Date, Hvide may elect to
begin a new Extension Period. See "Description of the Debentures--Option to
Extend Interest Payment Period" and "Certain Federal Income Tax
Consequences--Original Issue Discount."
Hvide has no current intention to exercise its right to defer payments
of interest by extending the Interest Payment Period on the Debentures.
Distributions with respect to the Preferred Securities must be paid on
the dates payable to the extent that the Issuer has funds available for the
payment of such Distributions in the Property Account. The funds of the Issuer
available for distribution to holders of the Preferred Securities will be
limited to payments under the Debentures in which the Issuer will invest the
proceeds from the issuance and sale of the Preferred Securities and the Common
Securities. See "Description of the Debentures." If Hvide does not make interest
payments on such Debentures, the Trustee will not have funds available to pay
Distributions on the Preferred Securities. The payment of Distributions (if and
to the extent the Issuer has funds on hand available for the payment of such
Distributions and cash sufficient to make such payments) is guaranteed by Hvide
as set forth herein under "Description of the Guarantee."
Distributions on the Preferred Securities will be payable to the
holders thereof as they appear on the register of the Issuer on the relevant
record dates, which shall be the fifteenth day (whether or not a Business Day)
next preceding the relevant distribution date. As long as the Preferred
Securities remain in book-entry form, subject to any applicable laws and
regulations and the provisions of the Trust
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<PAGE>
Agreement, each such payment will be made as described under "--Certain
Book-Entry Procedures for Global Certificates."
CONVERSION RIGHTS
The Preferred Securities are convertible at any time beginning
September 25, 1997 through the close of business on the Business Day prior to
the maturity date of the Debentures (or, in the case of Preferred Securities
called for redemption, prior to the close of business on the Business Day prior
to the Redemption Date) (the "Conversion Expiration Date") at the option of the
holder thereof and in the manner described below, into shares of Hvide Class A
Common Stock at an initial conversion rate of 1.7544 shares of Hvide Class A
Common Stock for each Preferred Security (equivalent to a purchase price of
$28.50 per share of Hvide Class A Common Stock), subject to adjustment as
described under "--Conversion Price Adjustments" below.
A holder of Preferred Securities wishing to exercise its conversion
right shall surrender such Preferred Securities, together with an irrevocable
conversion notice to the Trustee, as Conversion Agent, or to such other agent
appointed for such purpose, which shall, on behalf of such holder, exchange the
Preferred Securities for a portion of the Debentures and immediately convert
such Debentures into Hvide Class A Common Stock. So long as a book-entry system
for the Preferred Securities is in effect, however, the procedures for
converting the Preferred Stock that are in the form of Global Certificates into
shares of Hvide Class A Common Stock will be as described under "--Certain
Book-Entry Procedures for Global Certificate." Hvide's delivery upon conversion
of the fixed number of shares of Hvide Class A Common Stock into which the
Debentures are convertible (together with the cash payment, if any, in lieu of
any fractional share) shall be deemed to satisfy Hvide's obligation to pay the
principal amount at maturity of the portion of the Debentures so converted and
any unpaid interest accrued on such Debentures at the time of such conversion.
For a discussion of the taxation of such an exchange to holders, including the
possibility that holders who exchange their Preferred Securities for Hvide Class
A Common Stock may be subject to additional income tax to the extent accrued but
unpaid interest on the Debentures upon a conversion into Hvide Class A Common
Stock, see "Certain Federal Income Tax Consequences--Conversion of Preferred
Securities into Hvide Class A Common Stock." Holders may obtain copies of the
required form of the conversion notice from the Conversion Agent.
Accumulated Distributions will not be paid on Preferred Securities that
are converted; provided, however, holders of Preferred Securities at the close
of business on a Distribution payment record date will be entitled to receive
the Distribution payable, in cash, on such Preferred Securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Preferred Securities on or subsequent to such Distribution record date but prior
to such Distribution payment date. Except as provided in the immediately
preceding sentence, the Issuer will make no payment or allowance for accumulated
and unpaid Distributions, whether or not in arrears, on converted Preferred
Securities. Hvide will make no payment or allowance for dividends on the shares
of Hvide Class A Common Stock issued upon such conversion. Each conversion will
be deemed to have been effected immediately prior to the close of business on
the day on which proper notice was received by the Conversion Agent.
Shares of Hvide Class A Common Stock issued upon conversion of
Preferred Securities will be validly issued, fully paid and non-assessable. No
fractional shares of Hvide Class A Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid in cash.
27
<PAGE>
For possible restrictions on the ability of non-U.S. citizens to
convert Preferred Securities Debentures into Class A Common Stock, see "Risk
Factors--Restriction on Foreign Ownership of Common Stock; Possible Inability
to Convert Preferred Securities and Debentures."
CONVERSION PRICE ADJUSTMENTS
General. The conversion price will be subject to adjustment in certain
events including, without duplication: (i) the payment of dividends (and other
distributions) payable exclusively in Hvide common stock on Hvide common stock;
(ii) the issuance to all holders of Hvide common stock of rights or warrants
entitling holders of such rights or warrants (for a period not exceeding 45
days) to subscribe for or purchase Hvide common stock at less than the then
Current Market Price (as defined herein); (iii) subdivisions and combinations of
Hvide common stock; (iv) the payment of dividends (and other distributions) to
all holders of Hvide common stock consisting of evidences of indebtedness of
Hvide, securities or capital stock, cash, or assets (but excluding those rights
or warrants referred to above in clause (ii) and dividends and distributions
paid exclusively in cash); (v) the payment of dividends (and other
distributions) on Hvide common stock paid exclusively in cash, excluding (A)
cash dividends that do not exceed the per share amount of the immediately
preceding regular cash dividend (as adjusted to reflect any of the events
referred to in clauses (i) through (vi) of this sentence), and (B) cash
dividends if the annualized per share amount thereof does not exceed 5% of the
last sale price of Hvide common stock, as reported on the Nasdaq National
Market, on the trading day immediately preceding the date of declaration of such
dividend (such adjustment being limited to the amount in excess of 5% of such
Current Market Price); and (vi) payment in respect of a tender or exchange offer
(other than an odd-lot offer) by Hvide or any subsidiary of Hvide for Hvide
common stock in excess of 110% of the Current Market Price of Hvide common stock
on the trading day next succeeding the last date tenders or exchanges may be
made pursuant to such tender or exchange offer.
Hvide from time to time may reduce the conversion price of the
Debentures (and thus the conversion price of the Preferred Securities) by any
amount selected by Hvide for any period of at least 30 days, in which case Hvide
shall give at least 15 days' notice of such reduction. Hvide may, at its option,
make such reductions in the conversion price, in addition to those set forth
above, as the Board of Directors of Hvide deems advisable to avoid or diminish
any income tax to holders of Hvide Class A Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. See "Certain Federal Income Tax
Consequences--Adjustment of Conversion Price."
No adjustment of the conversion price will be made upon the issuance of
any shares of Hvide common stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities of
Hvide and the investment of additional optional amounts in shares of Hvide
common stock under any such plan, or the issuance of any shares of Hvide common
stock or options or rights to purchase such shares pursuant to any present or
future employee benefit plan or program of Hvide or pursuant to any option,
warrant, right, or exercisable, exchangeable or convertible security which does
not constitute an issuance to all holders of Hvide common stock (or a class
thereof) of rights or warrants entitling holders of such rights or warrants to
subscribe for or purchase Hvide common stock at less than the Current Market
Price. There shall also be no adjustment of the conversion price in case of the
issuance of any Hvide common stock (or securities convertible into or
exchangeable for Hvide common stock), except as specifically described above. If
any action would require adjustment of the conversion price pursuant to more
than one of the anti-dilution provisions, only one adjustment
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<PAGE>
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to holders of the Preferred Securities. No adjustment in
the conversion price will be required unless such adjustment would require an
increase or decrease of at least 1% of the conversion price, but any adjustment
that would otherwise be required to be made shall be carried forward and taken
into account in any subsequent adjustment.
Merger, Consolidation or Sale of Assets of Hvide. In the event that
Hvide is a party to any transaction (including, without limitation, a merger
other than a merger that does not result in a reclassification, conversion,
exchange or cancellation of Hvide Class A Common Stock), consolidation,
continuance, sale of all or substantially all of the assets of Hvide,
recapitalization or reclassification of Hvide Class A 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 Hvide Class A Common
Stock) or any compulsory share exchange (each of the foregoing being referred to
as a "Transaction"), in each case, as a result of which shares of Hvide Class A
Common Stock shall be converted into the right to receive, or shall be exchanged
for, (i) in the case of any Transaction other than a Transaction involving a
Stock Fundamental Change (as defined below) (and subject to funds being legally
available for such purpose under applicable law at the time of such conversion),
securities, cash or other property, each Preferred Security shall thereafter be
convertible into the kind and, in the case of a Transaction which does not
involve a Fundamental Change (as defined herein), amount of securities, cash and
other property receivable upon the consummation of such Transaction by a holder
of that number of shares of Hvide Class A Common Stock into which a Preferred
Security was convertible immediately prior to such Transaction, or (ii) in the
case of a Transaction involving a Stock Fundamental Change, each Preferred
Security shall thereafter be convertible (in the manner described herein) into
common stock of the kind received by holders of Hvide Class A Common Stock (but
in each case after giving effect to any adjustment discussed below relating to a
Fundamental Change if such Transaction constitutes a Fundamental Change). The
holders of Preferred Securities will have no voting rights with respect to any
Transaction described in this section.
If any Fundamental Change occurs, then the conversion price in effect
will be adjusted immediately after such Fundamental Change as described below.
In addition, in the event of a Stock Fundamental Change, each Preferred Security
shall be convertible solely into common stock of the kind received by holders of
Hvide Class A Common Stock as a result of such Stock Fundamental Change.
The conversion price in the case of any Fundamental Change will be
adjusted immediately after such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined
herein), the conversion price of the Preferred Securities immediately
following such Non-Stock Fundamental Change will be the lower of (A)
the conversion price in effect immediately prior to such Non-Stock
Fundamental Change (after giving effect to any other adjustments
effected pursuant to the preceding paragraphs) or (B) the product of
(1) the greater of the Applicable Price (as defined herein) and the
then applicable Reference Market Price (as defined herein) and (2) a
fraction, the numerator of which is $50 and the denominator of which is
(x) the amount of the redemption price for one Preferred Security if
the redemption date were the date of such Non-Stock Fundamental Change
(or, for the twelve-month periods commencing July 2, 1997, July 2, 1998
and July 2,
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1999 the product of 105.23%, 105.91% and 106.60%, respectively, times
$50) plus (y) any then-accumulated and unpaid distributions on one
Preferred Security; and
(ii) in the case of a Stock Fundamental Change (as defined
herein), the conversion price of the Preferred Securities immediately
following such Stock Fundamental Change will be the conversion price in
effect immediately prior to such Stock Fundamental Change (after giving
effect to any adjustments effected pursuant to the preceding
paragraphs) as adjusted by multiplying such conversion price by a
fraction of which the numerator will be the Purchaser Stock Price and
the denominator will be the Applicable Price; provided, however, that
in the event of a Stock Fundamental Change in which (A) 100% of the
value of the consideration received by a holder of Hvide Class A Common
Stock is common stock of the successor, acquiror, or other third party
(and cash, if any, is paid only with respect to any fractional
interests in such common stock resulting from such Stock Fundamental
Change) and (B) all Hvide Class A Common Stock will have been exchanged
for, converted into, or acquired for common stock (and cash with
respect to fractional interests) of the successor, acquiror, or other
third party, the conversion price of the Preferred Securities in effect
immediately prior to such Stock Fundamental Change as adjusted by
multiplying such conversion price by a fraction of which the numerator
will be one and the denominator will be the number of shares of common
stock of the successor, acquiror, or other third party received by a
holder of one share of Hvide Class A Common Stock as a result of such
Stock Fundamental Change.
In the absence of the Fundamental Change provisions, in the case of a
Transaction each Preferred Security would become convertible into the
securities, cash, or property receivable by a holder of the number of shares of
Hvide Class A Common Stock into which such Preferred Security was convertible
immediately prior to such Transaction. A failure to apply the Fundamental Change
conversion price adjustments described above could substantially lessen or
eliminate the value of the conversion privilege associated with the Preferred
Securities. For example, if Hvide were acquired in a cash merger, each Preferred
Security would become convertible solely into cash and would no longer be
convertible into securities whose value would vary depending on the future
prospects of Hvide and other factors.
The foregoing conversion price adjustments are designed, in certain
circumstances, to reduce the conversion price that would be applicable in a
Fundamental Change where all or substantially all the Hvide Class A Common Stock
is converted into securities, cash, or property and not more than 50% of the
value received by the holders of Hvide Class A Common Stock consists of stock
listed or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the Nasdaq National Market. Such reduction
would result in an increase in the amount of the securities, cash, or property
into which each Preferred Security is convertible over that which would have
been obtained in the absence of such conversion price adjustments.
In a Non-Stock Fundamental Change where the initial value received per
share of Hvide Class A Common Stock (measured as described in the definition of
Applicable Price) is lower than the then applicable conversion price of a
Preferred Security but greater than or equal to the Reference Market Price, the
conversion price will be adjusted as described above with the effect that each
Preferred Security will be convertible into securities, cash or property of the
same type received by the holders of Hvide Class A Common Stock in the
Transaction but in an amount per Preferred Security that would at the time
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<PAGE>
of the Transaction have had a value equal to the then applicable redemption
price per Preferred Security set forth under "--Optional Redemption."
In a Non-Stock Fundamental Change where the initial value received per
share of Hvide Class A Common Stock (measured as described in the definition of
Applicable Price) is lower than both the conversion price of a Preferred
Security in effect prior to any adjustment described above and the Reference
Market Price, the conversion price will be adjusted as described above but
calculated as though such initial value had been the Reference Market Price.
In a Stock Fundamental Change, the foregoing adjustments are designed
to provide in effect that (a) where Hvide Class A Common Stock is converted
partly into such common stock and partly into other securities, cash, or
property, each Preferred Security will be convertible solely into a number of
shares of such common stock determined so that the initial value of such shares
(measured as described in the definition of Purchaser Stock Price) equals the
value of the shares of Hvide Class A Common Stock into which such Preferred
Security was convertible immediately before the Transaction (measured as
aforesaid) and (b) where the Hvide Class A Common Stock is converted solely into
such common stock, each Preferred Security will be convertible into the same
number of shares of such common stock receivable by a holder of the number of
shares of Hvide Class A Common Stock into which such Preferred Security was
convertible immediately before such Transaction.
The term "Applicable Price" means (i) in the case of a Non-Stock
Fundamental Change in which the holders of the Hvide Class A Common Stock
receive only cash, the amount of cash received by the holder of one share of
Hvide Class A Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Stock Fundamental Change, the average of the Closing
Prices (as defined herein) for the Hvide Class A Common Stock during the ten
trading days prior to the record date for determination of the holders of Hvide
Class A Common Stock entitled to receive such securities, cash, or other
property in connection with such Non-Stock Fundamental Change or Stock
Fundamental Change or, if there is no such record date, the date upon which the
holders of the Hvide Class A Common Stock shall have the right to receive such
securities, cash, or other property (such record date or distribution date being
hereinafter referred to as the "Entitlement Date"), in each case as adjusted in
good faith by Hvide to appropriately reflect any of the events referred to in
clauses (i) through (vi) of the first paragraph under "--Conversion Price
Adjustments--General."
The term "Closing Price" means on any day the reported last sale price
on such day or in case no sale takes place on such day, the average of the
reported closing bid and asked prices in each case on the Nasdaq Composite or,
if the stock is not traded on the Nasdaq National Market, on the principal
national securities exchange or quotation system on which such stock is listed
or admitted to trading or, if not listed or admitted to trading on any national
securities exchange or quotation system, the average of the closing bid and
asked prices as furnished by any NASD member firm, selected by the Indenture
Trustee for that purpose.
The term "Current Market Price" of Hvide Class A Common Stock for any
day means the last reported sale price, regular way, on such day, or if no sale
takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on The Nasdaq
National Market, or, if the Hvide Class A Common Stock is not quoted on The
Nasdaq National Market on such day, on the principal national securities
exchange or quotation system on which the Hvide Class A Common Stock is listed
or admitted to trading, or, if not listed or admitted to trading or quoted on
any
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<PAGE>
national securities exchange or quotation system, the average closing bid and
asked prices of the Hvide Class A Common Stock in the over-the-counter market on
the day in question as reported by the National Quotation Bureau Incorporated,
or a similar generally accepted reporting service, or, if not so available, in
such manner, as furnished by the NASD member firm selected from time to time by
the Board of Directors of Hvide for that purpose or, if not so available in such
manner, as otherwise determined in good faith by the Board of Directors of
Hvide.
The term "Fundamental Change" means the occurrence of any Transaction
or event in connection with a plan pursuant to which all or substantially all of
the Hvide Class A Common Stock shall be exchanged for, converted into, acquired
for, or constitute solely the right to receive securities, cash, or other
property (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, continuance, combination, reclassification,
recapitalization, or otherwise), provided, that, in the case of a plan involving
more than one such Transaction or event, for purposes of adjustment on the
conversion price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Hvide Class A Common Stock shall be exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash, or other property, but the adjustment shall be based upon the
consideration that a holder of Hvide Class A Common Stock received in such
Transaction or event as a result of which more than 50% of the Hvide Class A
Common Stock shall have been exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash, or other property.
The term "Non-Stock Fundamental Change" means any Fundamental Change
other than a Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Stock Fundamental Change for the ten consecutive trading days
prior to and including the Entitlement Date, as adjusted in good faith by Hvide
to appropriately reflect any of the events referred to in clauses (i) through
(vi) of the first paragraph under "--Conversion Price Adjustments--General."
The term "Reference Market Price" shall initially mean $15.08 (which is
an amount equal to 662/3% of the last reported sale price for Hvide Class A
Common Stock on The Nasdaq National Market on June 23, 1997) and in the event of
any adjustment of the conversion price other than as a result of a Non-Stock
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 the Preferred
Securities.
The term "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 Hvide) of the consideration received by holders of Hvide Class A
Common Stock consists of common stock that for each of the ten consecutive
trading days prior to the Entitlement Date 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, a
Fundamental Change shall not be a Stock Fundamental Change if either (i) Hvide
continues to exist after the occurrence of such Fundamental Change and the
outstanding Preferred Securities continue to exist as outstanding Preferred
Securities or (ii) not later than the occurrence of such Fundamental Change, the
outstanding Preferred Securities are converted into or exchanged for shares of
convertible preferred stock of an entity succeeding to the business of Hvide or
a subsidiary thereof, which
32
<PAGE>
convertible preferred stock has powers, preferences, and relative,
participating, optional, or other rights, and qualifications, limitations, and
restrictions, substantially similar to those of the Preferred Securities.
SPECIAL EVENT EXCHANGE OR REDEMPTION
At any time following the occurrence and the continuation of a Tax
Event or an Investment Company Event (each as defined herein), the Issuer
Trustees shall direct the Conversion Agent to exchange all outstanding Preferred
Securities for Debentures and to dissolve the Trust, provided that, in the case
of a Tax Event, Hvide shall have the right to (a) direct that less than all, or
none, of the Preferred Securities be so exchanged if and for so long as Hvide
shall have elected to pay any Additional Sums such that the net amounts received
by the holders of Preferred Securities not so exchanged in respect of
Distributions and other distributions are not reduced as a result of such Tax
Event, and shall not have revoked any such election or failed to make such
payments or (b) redeem the Preferred Securities in the manner set forth below.
If a Tax Event shall occur or be continuing, Hvide shall have the
right, upon not less than 30 nor more than 60 days' notice, to redeem the
Debentures, in whole or in part, for cash upon the later of (i) 90 days
following the occurrence of such Tax Event or (ii) July 2, 2000. Promptly
following such redemption, Preferred Securities and Common Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed will be redeemed by the Issuer at the liquidation amount
thereof plus accrued and unpaid Distributions thereon to the redemption date on
a pro rata basis. The Common Securities will be redeemed on a pro rata basis
with the Preferred Securities, except that if a Declaration Event of Default has
occurred and is continuing, the Preferred Securities will have a priority over
the Common Securities with respect to the Redemption Price.
A "Special Event" means a Tax Event or an Investment Company Event. A
"Tax Event" means the receipt by the Trustee, on behalf of the Issuer, of an
opinion of counsel, rendered by a law firm having a national tax and securities
practice (which opinion shall not have been rescinded by such law firm), to the
effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is announced
on or after the date of this Registration Statement, there is more than an
insubstantial risk in each case after the date hereof that (i) the Issuer is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income received or accrued on the Debentures, (ii)
interest payable by Hvide on such Debentures is not, or within 90 days of the
date thereof will not be, deductible by Hvide, in whole or in part, for United
States federal income tax purposes; or (iii) the Issuer is, or will be within 90
days of the date thereof, subject to more than a de minimis amount of other
taxes, duties or other governmental charges. "Investment Company Event" means
the receipt by the Trustee, on behalf of the Issuer, of an opinion of counsel,
rendered by a law firm having a recognized national tax and securities practice
(which opinion shall not have been rescinded by such law firm), to the effect
that, as a result of the occurrence of a change in law or regulation or a change
in interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
that there is more than an insubstantial risk that the Issuer is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended (the "Investment
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<PAGE>
Company Act"), which Change in 1940 Act Law becomes effective on or after the
date of this Registration Statement.
"Additional Sums" means the additional amounts (which shall constitute
part of the Distributions) as may be necessary in order that the amount of
Distributions then due and payable by the Issuer on the outstanding Preferred
Securities and Common Securities of the Issuer shall not be reduced as a result
of any additional taxes, duties and other governmental charges to which the
Issuer has become subject as a result of a Tax Event.
Holders of Preferred Securities, by purchasing such Preferred
Securities, will be deemed to have agreed to be bound by these exchange
provisions in regard to the exchange of such Preferred Securities for Debentures
on the terms described above. See "Risk Factors--Special Event Exchange or
Redemption."
DISTRIBUTION OF DEBENTURES
At any time, Hvide will have the right to dissolve the Issuer and,
after satisfaction of the liabilities of creditors of the Issuer as provided by
applicable law, cause the Debentures to be distributed to the holders of the
Preferred Securities in liquidation of the Issuer. There can be no assurance as
to the market price for the Debentures distributed to the holders of the
Preferred Securities after such a termination of the Issuer. Under current
United States federal income tax law and interpretations and assuming, as
expected, the Issuer is treated as a grantor trust, a distribution of the
Debentures should not be a taxable event to the Issuer and holders of the
Preferred Securities. Should there be a change in law, a change in legal
interpretation, a Special Event or other circumstances, however, the
distribution could be a taxable event to holders of the Preferred Securities.
See "Certain Federal Income Tax Consequences--Redemption of Preferred Securities
for Debentures or Cash Upon Liquidation of the Issuer."
After the liquidation date fixed for any distribution of Debentures for
Preferred Securities (i) such Preferred Securities will no longer be deemed to
be outstanding, (ii) DTC or its nominee, as the record holder of such Preferred
Securities, will receive a registered Global Certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing such Preferred Securities not held by DTC or its
nominee will be deemed to represent the Debentures having a principal amount
equal to the liquidation amount of such Preferred Securities, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such Preferred Securities until such certificates are presented
to the Trustee for transfer or reissuance.
OPTIONAL REDEMPTION
Except as provided under "--Mandatory Redemption" below, the Preferred
Securities may not be redeemed by the Issuer prior to July 2, 2000.
On and after such date, upon any permitted redemption by Hvide of
Debentures, the Preferred Securities are subject to redemption, in whole or in
part, at the following percentages of the liquidation preference thereof plus
accrued and unpaid Distributions, if any, to the date fixed for redemption if
redeemed during the twelve-month period commencing July 2, in each of the
following years indicated:
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<PAGE>
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
<S> <C> <C> <C>
2000................................ 104.55% 2004.......................... 101.95%
2001................................ 103.90% 2005.......................... 101.30%
2002................................ 103.25% 2006.......................... 100.65%
2003................................ 102.60% 2007 and thereafter........... 100.00%
</TABLE>
The Issuer may not redeem the Preferred Securities in part unless all
accumulated and unpaid Distributions have been paid in full on all outstanding
Preferred Securities. If fewer than all the outstanding Preferred Securities are
to be redeemed, the Preferred Securities to be so redeemed will be selected as
described under "--Certain Book-Entry Procedures" and "--Redemption Procedures
for Global Certificates."
In the event Hvide redeems the Debentures in certain circumstances upon
the occurrence of a Tax Event as described under "--Special Event Exchange or
Redemption," the appropriate amount of the Preferred Securities will be redeemed
at 100% of the principal amount thereof together with accumulated and unpaid
Distributions to the redemption date.
If at any time following the Conversion Expiration Date, less than 5%
of the Preferred Securities offered hereby remain outstanding, such Preferred
Securities shall be redeemable at the option of the Issuer, in whole but not in
part, at a redemption price of $50 per Preferred Security, and all accumulated
and unpaid Distributions.
MANDATORY REDEMPTION
Upon repayment at maturity or as a result of the acceleration of the
Debentures upon the occurrence of a "Debenture Event of Default" described under
"Description of the Debentures--Debenture Events of Default," the Debentures
shall be subject to mandatory redemption, in whole but not in part, by Hvide,
and the proceeds from such repayment will be applied to redeem Preferred
Securities and Common Securities having an aggregate liquidation amount equal to
the aggregate principal amount of Debentures so repaid or redeemed at a
redemption price equal to the respective liquidation amount of the Preferred
Securities and Common Securities or, in the case of a redemption of the
Debentures, at the redemption price paid with respect to the Debentures, as
described below, together with accumulated and unpaid Distributions on the
Preferred Securities and Common Securities to the date of redemption. In the
case of acceleration of the Debentures, the Preferred Securities will be
redeemed only when repayment of the Debentures has actually been received by the
Issuer. In addition, as described above under "--Special Event Exchange or
Redemption," upon the occurrence of a Special Event, Preferred Securities shall
be exchanged for Debentures unless, in the case of a Tax Event, Hvide shall have
elected to (a) pay any Additional Sums such that the net amounts of
Distributions received by the holders of any Preferred Securities not so
exchanged are not reduced as a result of such Tax Event and shall not have
revoked any such election or failed to make such payments or (b) redeem the
Preferred Securities as further set forth in "--Special Event Exchange or
Redemption."
REDEMPTION PROCEDURES
Preferred Securities redeemed on the date fixed for redemption shall be
redeemed at the redemption price with the applicable proceeds from the
contemporaneous redemption of the Debentures.
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Redemptions of the Preferred Securities shall be made and the redemption price
shall be payable on the redemption date only to the extent that the Issuer has
funds on hand available for the payment of such redemption price. See also
"--Subordination of Common Securities."
Notice of any redemption (optional or mandatory) of Preferred
Securities (which notice will be irrevocable) will be given by the Trustee to
each recordholder of Preferred Securities that are being redeemed not fewer than
30 nor more than 60 days prior to the redemption date. If the Trustee gives a
notice of redemption in respect of the Preferred Securities, then, by 12:00
noon, New York City time, on the redemption date, to the extent funds are
available, the Trustee will deposit irrevocably with DTC or the Conversion
Agent, as the case may be, funds sufficient to pay the applicable redemption
price and will give DTC or the Conversion Agent, as the case may be, irrevocable
instructions and authority to pay the redemption price to the holders of such
Preferred Securities. See "--Certain Book-Entry Procedures for Global
Certificates." If such Preferred Securities are no longer in book-entry form,
the Trustee, to the extent funds are available, will irrevocably deposit with
the Paying Agent funds sufficient to pay the applicable redemption price and
will give the Paying Agent irrevocable instructions and authority to pay the
redemption price to the holders thereof upon surrender of their certificates
evidencing such Preferred Securities. Notwithstanding the foregoing,
Distributions payable on or prior to the redemption date for any Preferred
Securities called for redemption shall be payable to the holders of such
Preferred Securities as of the relevant record dates for the related
distribution dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease
(including the accumulation of Distributions and conversion rights of the
Preferred Securities), except the right of the holders of such Preferred
Securities to receive the redemption price, but without interest on such
redemption price, and such Preferred Securities will cease to be outstanding. In
the event that any date fixed for redemption of Preferred Securities is not a
Business Day, then payment of the redemption price 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
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the redemption price in
respect of Preferred Securities called for redemption is improperly withheld or
refused and not paid either by the Issuer or by Hvide pursuant to the Guarantee
as described under "Description of the Guarantee," distributions on such
Preferred Securities will continue to accumulate at the then applicable rate,
from the redemption date originally established by the Issuer to the date such
redemption price is actually paid, in which case the actual payment date will be
the date fixed for redemption for purposes of calculating the redemption price.
Subject to applicable law (including, without limitation, United States
federal securities law), Hvide, or its subsidiaries, may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
Payment of the redemption price on the Preferred Securities and any
distribution or exchange of Debentures to holders of Preferred Securities shall
be made to the applicable recordholders thereof as they appear on the register
for such Preferred Securities on the relevant record date, which shall be the
fifteenth day (whether or not a Business Day) prior to the redemption date or
liquidation date, as applicable.
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If less than all of the Preferred Securities and Common Securities are
to be redeemed on a redemption date, then the aggregate liquidation amount of
such Preferred Securities and Common Securities to be redeemed shall be
allocated pro rata among the Preferred Securities and the Common Securities. The
particular Preferred Securities to be redeemed shall be selected not more than
60 days prior to the redemption date by the Trustee from the outstanding
Preferred Securities not previously called for redemption, by lot or by such
method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions (equal to $50 or an integral multiple
of $50 in excess thereof) of the liquidation amount of the Preferred Securities.
The Trustee shall promptly notify the Conversion Agent in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the liquidation amount thereof to be
redeemed; it being understood that, in the case of Preferred Securities held by
DTC (or any successor) or its nominee, the distribution of the proceeds of such
redemption will be made in accordance with the procedures of DTC or its nominee.
For all purposes of the Trust Agreement, unless the context otherwise requires,
all provisions relating to the redemption of Preferred Securities shall relate,
in the case of any Preferred Securities redeemed or to be redeemed only in part,
to the portion of the aggregate liquidation amount of Preferred Securities which
has been or is to be redeemed.
Notice of any redemption of Debentures will be mailed at least 30 days
but not more than 60 days before the redemption date to each holder of
Debentures to be redeemed at its registered address. Unless Hvide defaults in
payment of the redemption price, on and after the redemption date, interest
ceases to accrue on such Debentures or portions thereof called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the redemption price of, the Preferred
Securities and Common Securities, as applicable, shall be made pro rata based on
the liquidation amount of such Preferred Securities and Common Securities;
provided, however, that if on any distribution date or redemption date, a
Declaration Event of Default shall have occurred and be continuing, no payment
of any Distribution on, or redemption price of, any of the Common Securities,
and no other payment on account of the redemption, liquidation or other
acquisition of such Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions on all of the outstanding
Preferred Securities for all Distribution periods terminating on or prior
thereto, or in the case of payment of the redemption price the full amount of
such redemption price on all of the outstanding Preferred Securities then called
for redemption, shall have been made or provided for, and all funds available to
the Trustee shall first be applied to the payment in full in cash of all
Distributions on, or redemption price of, the Preferred Securities then due and
payable.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution of the Issuer
(each, a "Liquidation"), the holders of the Preferred Securities at that time
will be entitled to receive out of the assets of the Issuer, after satisfaction
of liabilities to creditors of the Issuer as provided by applicable law,
distributions in an amount equal to the aggregate of the stated liquidation
amount of $50 per Preferred Security plus accumulated and unpaid Distributions
thereon to the date of payment (the "Liquidation Distribution"), unless, in
connection with such Liquidation, after satisfaction of liabilities to creditors
of the Issuer as provided by applicable law, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
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<PAGE>
interest equal to accumulated and unpaid Distributions on, the Preferred
Securities, have been distributed on a pro rata basis to the holders of
Preferred Securities in exchange for such Preferred Securities. See
"--Distribution of Debentures."
If such Liquidation Distribution can be paid only in part because the
Issuer has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Issuer on the
Preferred Securities shall be paid on a pro rata basis. Hvide will be entitled
to receive Liquidation Distributions upon any such liquidation pro rata with the
holders of the Preferred Securities, except that if a Debenture Event of Default
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities.
Pursuant to the Declaration, the Issuer shall automatically dissolve
upon expiration of its term and shall dissolve on the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of Hvide; (ii) upon
receipt by the Trustee of written direction from Hvide, as sponsor of the
Issuer, to dissolve the Issuer (which direction is optional and wholly within
the discretion of Hvide, as depositor); (iii) the redemption, conversion, or
exchange of all of the Preferred Securities and Common Securities; (iv) the
entry by a court of competent jurisdiction of an order for the dissolution of
the Issuer; (v) the occurrence of a Special Event except in the case of a Tax
Event following which Hvide has elected to pay any Additional Sums such that the
net amount received by holders of Preferred Securities in respect of
Distributions is not reduced as a result of such Tax Event and Hvide has not
revoked any such election or failed to make such payment; and (vi) distribution
of all of the underlying Hvide Class A Common Stock to all holders of Preferred
Securities upon conversion of all of the Preferred Securities.
DECLARATION EVENTS OF DEFAULT; NOTICE
An event of default under the Indenture (a "Debenture Event of
Default") constitutes an event of default under the Declaration with respect to
the Preferred Securities and the Common Securities (a "Declaration Event of
Default"), whatever the reason for such Debenture Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body.
Within ten days after the occurrence of any Declaration Event of
Default actually known to the Trustee, the Trustee shall transmit notice of such
Declaration Event of Default to the holders of the Preferred Securities, the
Company Trustees and Hvide, as depositor, unless such Declaration Event of
Default shall have been cured or waived. Hvide, as depositor, and the Company
Trustees, on behalf of the Issuer, are required to file annually with the
Trustee a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Declaration.
If a Declaration Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
dissolution of the Issuer as described above. See "--Liquidation Distribution
Upon Dissolution." The existence of a Declaration Event of Default does not
entitle the holders of Preferred Securities to accelerate the maturity thereof.
In the case of any Declaration Events of Default, Hvide as holder of
the Common Securities will be deemed to have waived any right to act with
respect to any such Declaration Events of Default until such Declaration Events
of Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Declaration Events of Default with respect
to the Preferred
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Securities have been so cured, waived or otherwise eliminated, the Trustee shall
act solely on behalf of the holders of the Preferred Securities and not on
behalf of Hvide as holder of the Common Securities, and only the holders of the
Preferred Securities will have the right to direct the Trustee to act on their
behalf.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default has occurred and is continuing, the
Trustee, as the sole holder of the Debentures, shall have the right under the
Indenture to declare the principal of, premium, if any, on and interest on the
Debentures immediately due and payable, and, accordingly, the holders of
Preferred Securities would rely on the enforcement by the Trustee of its rights
as a holder of the Debentures against Hvide. In addition, the holders of a
majority in aggregate liquidation amount of the Preferred Securities will have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee or to direct the exercise of any trust or
power conferred upon the Trustee under the Declaration, including the right to
direct the Trustee to exercise the remedies available to it as a holder of the
Debentures. If the Trustee fails to enforce its rights as holder of the
Debentures after a request therefor by a holder of Preferred Securities, such
holder may proceed to enforce such rights directly against Hvide.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of Hvide 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 Direct Action
against Hvide for enforcement of payment to such holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, Hvide will be subrogated to the rights of such holder of Preferred
Securities under the Declaration to the extent of any payment made by Hvide to
such holder of Preferred Securities in such Direct Action. The holders of
Preferred Securities will not be able to exercise directly against Hvide any
other remedy available to the Trustee unless the Trustee first fails to do so.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Trustee, the Delaware Trustee or any
Company Trustee that is not a natural person may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of such Issuer Trustee, shall be the Successor of such Issuer Trustee
under the Declaration, provided such corporation shall be otherwise qualified
and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUER
The Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below. The Issuer may, at the request of Hvide, with the consent of
the Company Trustees and without the consent of the Trustee, the Delaware
Trustee or the holders of the Preferred Securities, merge with or into,
consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any state, provided that (i) such successor entity either (a)
expressly assumes all of the obligations of the Issuer with
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respect to the Preferred Securities or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise, (ii)
Hvide expressly appoints a trustee of such successor entity possessing the same
powers and duties as the Trustee as the holder of the Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (vi) such successor entity
has a purpose identical to that of the Issuer, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, Hvide
has received an opinion from independent counsel to the Issuer experienced in
such matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect (other than with respect to
any dilution of the holders' interest in the new entity) and (b) following such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Issuer nor such successor entity will be required to register as an
investment company under the Investment Company Act, and (viii) Hvide or any
permitted successor or assignee owns all of the Common Securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Issuer shall not, except with the consent of
holders of 100% in aggregate liquidation amount of the Preferred Securities,
consolidate, amalgamate, merge with or into, be replaced by or convey, transfer
or lease its properties and assets substantially as an entirety to any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer or the successor entity to
be classified as other than a grantor trust for United States federal income tax
purposes.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under "Description of the
Guarantee--Amendments and Assignment" and as otherwise required by law and the
Declaration, the holders of the Preferred Securities will have no voting rights.
The Declaration may be amended from time to time by Hvide and the
Issuer Trustees, without the consent of the holders of the Preferred Securities
(i) to cure any ambiguity, correct or supplement any provisions in the
Declaration that may be inconsistent with any other provision, or to make any
other provisions with respect to matters or questions arising under the
Declaration that shall not be inconsistent with the other provisions of the
Declaration, (ii) to modify, eliminate or add to any provision of the
Declaration to such extent as shall be necessary to ensure that the Issuer will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Preferred Securities and Common Securities are outstanding
or to ensure that the Issuer will not be required to register as an "investment
company" under the Investment Company Act or be classified as other than a
grantor trust
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for United States federal income tax purposes or (iii) to qualify or maintain
the qualification of the Declaration under the Trust Indenture Act; provided,
however, that in the case of clause (i), such action shall not adversely affect
in any material respect the interests of any holder of Preferred Securities or
Common Securities, and any amendments of the Declaration shall become effective
when notice thereof is given to the holders of Preferred Securities and Common
Securities. The Declaration may be amended by the Issuer Trustees and Hvide with
(i) the consent of holders representing not less than a majority (based upon
liquidation amounts) of the outstanding Preferred Securities and Common
Securities, acting as a single class, and (ii) receipt by the Issuer Trustees of
an opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer Trustees in accordance with such amendment will not
affect the Issuer's status as a grantor trust for United States federal income
tax purposes or the Issuer's exemption from the status of an "investment
company" under the Investment Company Act; provided further that (a) without the
consent of each holder of Preferred Securities and Common Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Preferred Securities and Common Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Preferred Securities and Common Securities as of a specified date or (ii)
restrict the right of a holder of Preferred Securities and Common Securities to
institute suit for the enforcement of any such payment on or after such date.
If any proposed amendment of the Declaration provides for, or the
Issuer Trustees otherwise proposes to effect, the dissolution, winding-up or
termination of the Issuer, other than pursuant to the terms of the Declaration,
then the holders of the then outstanding Preferred Securities, as a 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 the holders of the majority
in aggregate liquidation amount of the Preferred Securities.
The holders of a majority in aggregate liquidation amount of Preferred
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or to direct
the exercise of any trust or power conferred upon the Trustee under the
Declaration, including the right to direct the Trustee to exercise the remedies
available to it as a holder of the Debentures. So long as any Debentures are
held by the Trustee, the Issuer Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Indenture
Trustee or executing any trust or power conferred on the Indenture Trustee with
respect to such Debentures, (ii) waive any past default that is waivable under
Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Debentures shall be due and payable,
or (iv) consent to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required, without in each case,
obtaining the prior approval of the holders of a majority in aggregate
liquidation amount of all outstanding Preferred Securities (except in the case
of clause (iv), which consent, in the event that no Declaration Event of Default
shall occur and be continuing, shall be of the holders of Preferred Securities
and Common Securities, voting together as a single class); provided, however,
that where a consent under the Indenture would require the consent of each
holder of Debentures affected thereby, no such consent shall be given by the
Trustee without the prior written consent of each holder of the Preferred
Securities. The Issuer Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Preferred Securities
except by subsequent vote of the holders of the Preferred Securities. The
Trustee shall notify each holder of record of the Preferred Securities of any
notice of default with respect to the Debentures.
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A waiver of a Debenture Event of Default will constitute a waiver of
the corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities
may be given at a separate meeting of holders of Preferred Securities convened
for such purpose, at a meeting of all of the holders of the Preferred Securities
and the Common Securities or pursuant to written consent. The Trustee will cause
a notice of any meeting at which holders of Preferred Securities are entitled to
vote, or of any matter upon which action by written consent of such holders is
to be taken, to be given to each holder of record of Preferred Securities in the
manner set forth in the Trust Agreement.
No vote or consent of the holders of Preferred Securities will be
required for the Issuer to redeem and cancel the Preferred Securities in
accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned at such time by Hvide, any affiliate of
Hvide, the Issuer Trustees or any affiliate of any Issuer Trustee shall, for
purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
The procedures by which holders of Preferred Securities may exercise
their voting rights are described below. See "--Certain Book-Entry Procedures
for Global Certificates."
Holders of the Preferred Securities will have no rights to appoint or
remove the Issuer Trustees, who may be appointed, removed or replaced solely by
Hvide, as the direct or indirect holder of all the Common Securities.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to DTC,
which shall credit the relevant accounts at DTC on the applicable distribution
dates or, if the Preferred Securities are not held by DTC, such payments shall
be made by check mailed to the address of the holder entitled thereto as such
address shall appear on the Securities Register. The Paying Agent shall
initially be the Trustee and any co-paying agent chosen by the Trustee and
acceptable to the Company Trustees and Hvide. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Trustee
and Hvide. In the event that the Trustee shall no longer be the Paying Agent the
Company Trustees shall appoint a successor (which shall be a bank or trust
company acceptable to the Company Trustees and Hvide) to act as Paying Agent.
CERTAIN BOOK-ENTRY PROCEDURES FOR GLOBAL CERTIFICATES
The description of book-entry procedures in this Prospectus includes
summaries of certain rules and operating procedures of DTC that affect transfers
of interests in the global certificate or certificates issued in connection with
sales of Preferred Securities made pursuant to this Prospectus. Substantially
all of the Preferred Securities were issued as fully registered securities
registered in the name of Cede & Co. (as nominee for DTC). Fully registered
global Preferred Security certificates (the "Global Certificates") were issued,
representing such Preferred Securities and were deposited with DTC.
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DTC has advised the Issuer and the Company as follows: DTC is a limited
purpose trust company organized under the laws of the State of New York, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participants ("participants") and facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical transfer and delivery of certificates.
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other organizations. Indirect
access to the DTC system is available to other entities such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly ("indirect
participants").
DTC has advised the Issuer and the Company that its current practice,
upon the issuance of Global Certificates, is to credit, on its internal system,
the respective principal amount of the individual beneficial interests
represented by such Global Certificates to the accounts with DTC of the
participants through which such interests are to be held. Ownership of
beneficial interests in the Global Certificates will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
DTC or its nominees (with respect to interests of participants) and the records
of participants and indirect participants (with respect to interests of persons
other than participants).
As long as DTC, or its nominee, is the registered holder of a Global
Certificate, DTC or such nominee, as the case may be, will be considered the
sole owner and holder of the Preferred Securities represented by such Global
Certificate for all purposes under the Declaration and the Preferred Securities.
Except in certain limited circumstances owners of beneficial interests
in a Global Certificate will not be entitled to have any portions of such Global
Certificate registered in their names, will not receive or be entitled to
receive physical delivery of Preferred Securities in definitive form and will
not be considered the owners or holders of the Global Certificate (or any
Preferred Securities represented thereby) under the Declaration or the Preferred
Securities.
Investors may hold their interests in Global Certificates directly
through DTC, if they are participants in such system, or indirectly through
organizations (including Euroclear and CEDEL), which are participants in such
system. All interests in a Global Certificate, including those held through
Euroclear or CEDEL, will be subject to the procedures and requirements of DTC.
Those interests held through Euroclear and CEDEL will also be subject to the
procedures and requirements of such system.
The laws of some states require that certain persons take physical
delivery in definitive form of securities that they own. Consequently, the
ability to transfer beneficial interests in a Global Certificate to such persons
may be limited. Because DTC can act only on behalf of its participants, which in
turn act on behalf of indirect participants and certain banks, the ability of a
person having beneficial interests in a Global Certificate to pledge such
interest to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of such interests, may be affected by the lack
of a certificate evidencing such interests.
Payments of Distributions on Global Certificates will be made to DTC or
its nominee as the registered owner thereof. Neither the Issuer, the Company,
the Trustee nor any of their respective agents will have any responsibility or
liability for any aspect of the records relating to or payments made on
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account of beneficial ownership interests in the Global Certificates or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Issuer and the Company expect that DTC or its nominee, upon receipt
of any payment of Distributions in respect of a Global Certificate representing
any Preferred Securities held by it or its nominee, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global
Certificate for such Preferred Securities as shown on the records of DTC or its
nominee. The Issuer and the Company also expect that payments by participants to
owners of beneficial interests in such Global Certificate held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in "street name." Such payments will be the responsibility of such participants.
Except for trades involving only Euroclear and CEDEL participants,
interests in the Global Certificates will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in such interests will
therefore settle in immediately available funds, subject in all cases to the
rules and procedures of DTC and its participants. Transfers between participants
in DTC will be effected in accordance with DTC's procedures, and will be settled
in same day funds. Transfers between participants in Euroclear and CEDEL will be
effected in the customary manner in accordance with their respective rules and
operating procedures.
Subject to compliance with the transfer and exchange restrictions
applicable to the Preferred Securities described elsewhere herein, cross-market
transfers between DTC participants, on the one hand, and Euroclear or CEDEL
participants, on the other hand, will be effected by DTC in accordance with
DTC's rules on behalf of Euroclear or CEDEL, as the case may be, by its
respective depositary; however, such cross-market transactions will require
delivery of instructions to Euroclear or CEDEL, as the case may be, by the
counterparts in such system in accordance with the rules and procedures and
within the established deadlines (Brussels time) of such system. Euroclear or
CEDEL, as the case may be, will, if the transaction meets its settlement
requirements, deliver instructions to its respective depository to take action
to effect final settlement on its behalf by delivering or receiving interests in
the relevant Global Certificate in DTC, and making or receiving payment in
accordance with customary procedures for same-day funds settlement applicable to
DTC. Euroclear participants and CEDEL participants may not deliver instructions
directly to the depositories for Euroclear or CEDEL.
Because of time zone differences, the securities account of a Euroclear
or CEDEL participant purchasing an interest in a Global Certificate from a DTC
participant will be credited, and any such crediting will be reported to the
relevant Euroclear or CEDEL participant, during the securities settlement
processing day (which must be a business day for Euroclear and CEDEL)
immediately following the DTC settlement date. Cash received in Euroclear or
CEDEL as a result of sales of interests in a Global Certificate by or through a
Euroclear or CEDEL participant to a DTC participant will be received with value
on the DTC settlement date but will be available in the relevant Euroclear or
CEDEL cash account only as of the business day for Euroclear or CEDEL following
the DTC settlement date.
DTC has advised the Issuer and the Company that it will take any action
permitted to be taken by a holder of Global Certificates (including the
presentation of Preferred Securities for exchange as described below and the
conversion of Preferred Securities) only at the direction of one or more
participants to whose account with DTC interests in the Global Certificates are
credited and only in
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respect of such portion of the aggregate liquidation amount of the Preferred
Securities as to which such participant or participants has or have given such
direction. However, if there is a Declaration Event of Default, DTC reserves the
right to exchange the Global Certificates for legended Preferred Securities in
certificated form, and to distribute such Preferred Securities to its
participants.
Although DTC, Euroclear and CEDEL have agreed to the foregoing
procedures in order to facilitate transfers of beneficial ownership interests in
the Global Certificates among participants of DTC, Euroclear and CEDEL, they are
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Issuer, the Company, the
Trustee nor any of their respective agents will have any responsibility for the
performance by DTC, Euroclear and CEDEL, their participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations, including maintaining, supervising or reviewing the
records relating to, or payments made on account of, beneficial ownership
interests in Global Certificates.
Redemption notices shall be sent to Cede as the registered holder of
the Preferred Securities. If less than all of the Preferred Securities are being
redeemed, DTC's current practice is to determine by lot the amount of the
interest of each direct participant to be redeemed.
Although voting with respect to the Preferred Securities is limited to
the holders of record of the Preferred Securities, in those instances in which a
vote is required, neither DTC nor Cede will itself consent or vote with respect
to Preferred Securities. Under its usual procedures, DTC would mail an omnibus
proxy (the "Omnibus Proxy") to the Trustee as soon as possible after the record
date. The Omnibus Proxy assigns Cede's consenting or voting rights to those
direct participants to whose accounts such Preferred Securities are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
Conveyance of notices and other communications by DTC to participants,
by participants to indirect participants, and by participants and indirect
participants to beneficial owners of the Preferred Securities and the voting
rights of participants, indirect participants and beneficial owners of Preferred
Securities will be governed by arrangements among them, subject to any statutory
or regulatory requirements as may be in effect from time to time.
DTC may discontinue providing its services as securities depositary
with respect to the Preferred Securities at any time by giving reasonable notice
to the Trustee and Hvide. In the event that a successor securities depositary is
not obtained, definitive Preferred Securities certificates representing such
Preferred Securities are required to be printed and delivered. Hvide, at its
option, may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor depositary). After a Debenture Event of Default, the
holders of a majority in liquidation amount of Preferred Securities may
determine to discontinue the system of book-entry transfers through DTC. In any
such event, definitive certificates for the Preferred Securities will be printed
and delivered.
TRANSFER AGENT, REGISTRAR AND PAYING, CONVERSION AND EXCHANGE AGENT
The Bank of New York, the Trustee, currently acts as transfer agent,
registrar and paying, conversion and exchange agent for the Preferred
Securities.
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Registration of transfers or exchanges of Preferred Securities will be
effected without charge by or on behalf of the Issuer, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Issuer will not be required to register or cause to be
registered the transfer of the Preferred Securities after such Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE TRUSTEE
Hvide and certain of its subsidiaries may maintain deposit accounts and
conduct other banking and corporate securities transactions and relationships
with the Trustee in the ordinary course of their businesses. The Trustee, other
than during the occurrence and continuance of a Declaration Event of Default,
undertakes to perform only such duties as are specifically set forth in the
Declaration and, after such Declaration Event of Default, must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to this provision, the Trustee is
under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no Declaration Event of Default has occurred and
is continuing and the Trustee is required to decide between alternative causes
of action, construe ambiguous provisions in the Declaration or is unsure of the
application of any provision of the Declaration, and the matter is not one on
which holders of Preferred Securities are entitled under the Declaration to
vote, then the Trustee shall take such action as is directed by Hvide and, if
not so directed, shall take such action as it deems advisable and in the best
interests of the holders of the Preferred Securities and the Common Securities
and will have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS
The Company Trustees are authorized and directed to conduct the affairs
of and to operate the Issuer in such a way that the Issuer will not be deemed to
be an "investment company" required to be registered under the Investment
Company Act or classified as an association taxable as a corporation for United
States federal income tax purposes and so that the Debentures will be treated as
indebtedness of Hvide for United States federal income tax purposes. In this
connection, Hvide and the Company Trustees are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Issuer or
the Declaration, that Hvide and the Company Trustees determine in their
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar
rights.
The Issuer may not borrow money or issue debt or mortgage or pledge any
of its assets.
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DESCRIPTION OF THE GUARANTEE
The Guarantee was executed and delivered by Hvide concurrently with the
issuance by the Issuer of the Preferred Securities for the benefit of the
holders from time to time of such Preferred Securities. The Bank of New York is
the trustee ("Guarantee Trustee") under the Guarantee. This summary of certain
provisions of the Guarantee does not purport to be complete and is subject to,
and qualified in its entirety by reference to, all of the provisions of the
Guarantee, a copy of which has been filed as an exhibit to the registration
statement. The Guarantee Trustee holds the Guarantee for the benefit of the
holders of the Preferred Securities.
GENERAL
Pursuant to and to the extent set forth in the Guarantee, Hvide has
irrevocably agreed to pay in full on a subordinated basis, to the extent set
forth herein, the Guarantee Payments (as defined below) to the holders of the
Preferred Securities, as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert other than the
defense of payment. The following payments with respect to the Preferred
Securities, to the extent not paid by or on behalf of the Issuer (the "Guarantee
Payments"), are subject to the Guarantee: (i) any accumulated and unpaid
Distributions required to be paid on the Preferred Securities, to the extent
that the Issuer has funds on hand available therefor at such time, (ii) the
redemption price with respect to any Preferred Securities called for redemption
to the extent that the Issuer has funds on hand available therefor at such time,
or (iii) upon a voluntary or involuntary dissolution, winding up or liquidation
of the Issuer (unless the Debentures are distributed to holders of the Preferred
Securities), the lesser of (a) the Liquidation Distribution, to the extent that
the Issuer has funds on hand available therefor at such time, and (b) the amount
of assets of the Issuer remaining available for distribution to holders of
Preferred Securities. Hvide's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by Hvide to the holders of
the Preferred Securities or by causing the Issuer to pay such amounts to such
holders.
The Guarantee is an irrevocable guarantee on a subordinated basis of
the Issuer's obligations under the Preferred Securities, but applies only to the
extent that the Issuer has funds sufficient to make such payments, and is not a
guarantee of collection. If Hvide does not make interest payments on the
Debentures held by the Issuer, the Issuer will not be able to pay Distributions
on the Preferred Securities and will not have funds legally available therefor.
Hvide has, through the Guarantee, the Declaration, the Debentures and
the Indenture, taken together, fully, irrevocably and unconditionally guaranteed
all of the Issuer's obligations under the Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Preferred
Securities. See "Relationship Among the Preferred Securities, the Debentures and
the Guarantee."
The Company has also agreed separately to irrevocably and
unconditionally guarantee the obligations of the Issuer with respect to the
Common Securities to the same extent as the Guarantee, except that upon the
occurrence and during the continuation of a Declaration Event of Default,
holders of Preferred Securities shall have priority over holders of Common
Securities with respect to distributions and payments on liquidation, redemption
or otherwise.
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STATUS OF THE GUARANTEE
The Guarantee constitutes an unsecured obligation of Hvide and ranks
subordinate and junior in right of payment to all other liabilities of Hvide and
ranks pari passu with any guarantee now or hereafter entered into by Hvide in
respect of any preferred or preference stock of any affiliate of Hvide and
senior to the Common Stock of Hvide. The terms of the Preferred Securities
provide that each holder by acceptance thereof, consents and agrees to the
subordination and other provisions of the Guarantee.
The Guarantee constitutes a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). The
Guarantee is held for the benefit of the holders of the Preferred Securities.
The Guarantee will not be discharged except by payment of the Guarantee Payments
in full to the extent not paid by the Issuer or upon distribution of the
Debentures to the holders of the Preferred Securities. The Guarantee does not
place a limitation on the amount of additional indebtedness that may be incurred
by Hvide or any of its subsidiaries.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely
affect the rights of holders of the Preferred Securities (in which case no vote
will be required), the Guarantee may not be amended without the prior approval
of the holders of not less than a majority in aggregate liquidation amount of
such outstanding Preferred Securities. The manner of obtaining any such approval
is as set forth under "Description of the Preferred Securities--Voting Rights;
Amendment of the Declaration." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of Hvide and shall inure to the benefit of the holders of the
Preferred Securities then outstanding.
CERTAIN COVENANTS OF HVIDE
Hvide has covenanted in the Guarantee that if and so long as (i) the
Issuer is the holder of all the Debentures, (ii) a Tax Event in respect of the
Issuer has occurred and is continuing and (iii) Hvide has elected, and has not
revoked such election, to pay Additional Sums in respect of the Preferred
Securities and Common Securities, Hvide will pay to the Issuer such Additional
Sums. Hvide has also covenanted that it will not, and it will not cause any of
its subsidiaries to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
Hvide's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of Hvide that rank
pari passu with or junior to the Debentures (other than (a) any dividend,
redemption, liquidation, interest, principal or guarantee payment by Hvide where
the payment is made by way of securities (including capital stock) that rank
pari passu with or junior to the securities on which such dividend, redemption,
interest, principal or guarantee payment is being made, (b) payments under the
Guarantee, (c) purchases of Hvide Class A Common Stock related to the issuance
of Hvide Class A Common Stock under any of Hvide's benefit plans for its
directors, officers or employees, (d) as a result of a reclassification of
Hvide's capital stock or the exchange or conversion of one series or class of
Hvide's capital stock for another series or class of Hvide's capital stock and
(e) the purchase of fractional interests in shares of Hvide's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged) if at such time (i) there shall have
occurred
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and be continuing any event of which Hvide has actual knowledge that with the
giving of notice or the lapse of time, or both, would constitute a Debenture
Event of Default, (ii) Hvide shall be in default with respect to its payment of
any obligations under the Guarantee or (iii) Hvide shall have given notice of
its selection of an Extension Period as provided in the Indenture with respect
to the Debentures and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing. Hvide has also covenanted
(i) for so long as Preferred Securities are outstanding, not to convert
Debentures except pursuant to a notice of conversion delivered to the Conversion
Agent by a holder of Preferred Securities, (ii) to maintain directly or
indirectly 100% ownership of the Common Securities, provided that certain
successors which are permitted pursuant to the Indenture may succeed to Hvide's
ownership of the Common Securities, (iii) not to voluntarily dissolve, wind-up,
liquidate or terminate the Issuer, except (a) in connection with a distribution
of the Debentures to the holders of the Preferred Securities in liquidation of
the Issuer upon the redemption of all outstanding Preferred Securities or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the Declaration, (iv) to maintain the reservation for issuance of the number of
shares of Hvide Class A Common Stock that would be required from time to time
upon the conversion of all of the Debentures then outstanding, (v) to use its
reasonable efforts, consistent with the terms and provisions of the Declaration,
to cause the Issuer to remain classified as a grantor trust and not as an
association taxable as a corporation for United States federal income tax
purposes and (vi) to deliver shares of Hvide Class A Common Stock upon an
election by the holders of the Preferred Securities to convert such Preferred
Securities into Hvide Class A Common Stock.
As part of the Guarantee, Hvide has agreed that it will honor all
obligations described therein relating to the conversion or exchange of the
Preferred Securities into or for Hvide Class A Common Stock or Debentures.
GUARANTEE EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of
Hvide to perform any of its payment or other obligations thereunder. The holders
of a majority in aggregate liquidation amount of the Preferred Securities have
the right to direct the time, method and place of conducting any processing for
any remedy available to the Guarantee Trustee in respect of the Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee.
If the Guarantee Trustee fails to enforce the Guarantee, any holder of
the Preferred Securities may institute a legal proceeding directly against Hvide
to enforce its rights under the Guarantee without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee or any other person or
entity. In addition, any record holder of Preferred Securities shall have the
right, which is absolute and unconditional, to proceed directly against Hvide to
obtain Guarantee Payments, without first waiting to determine if the Guarantee
Trustee has enforced the Guarantee or instituting a legal proceeding against the
Issuer, the Guarantee Trustee or any other person or entity. Hvide has waived
any right or remedy to require that any action be brought just against the
Issuer, or any other person or entity before proceeding directly against Hvide.
Hvide, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not Hvide is in compliance with all the
conditions and covenants applicable to it under the Guarantee.
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INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance
of a default by Hvide in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by the
Guarantee at the request of any holder of Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the redemption price of the Preferred Securities, upon full
payment of the amounts payable upon liquidation of the Issuer, upon the
distribution, if any, of Hvide Class A Common Stock to the holders of Preferred
Securities in respect of the conversion of all such holders' Preferred
Securities into Hvide Class A Common Stock or upon distribution of Debentures to
the holders of the Preferred Securities in exchange for all of the Preferred
Securities. The 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 under such Preferred Securities or the Guarantee.
GOVERNING LAW
The Guarantee is governed by and construed in accordance with the laws
of the State of New York.
DESCRIPTION OF THE DEBENTURES
The Debentures are to be issued under a Junior Subordinated Indenture
(the "Indenture") between Hvide and The Bank of New York, as trustee (the
"Indenture Trustee"), copies of which will be available for inspection at the
corporate trust office of the Indenture Trustee in New York, New York. The terms
of the Debentures include those stated in the Indenture and made a part thereof
by reference to the Trust Indenture Act in effect on the date of the Indenture.
This summary of certain terms and provisions of the Debentures and the Indenture
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the Indenture. Whenever particular defined terms of
the Indenture are referred to herein, such defined terms are incorporated herein
by reference.
GENERAL
The Debentures are unsecured and rank junior and are subordinate in
right of payment to all Senior Debt of Hvide. The Debentures are limited in
aggregate principal amount to $118.5 million, such amount being the sum of the
$115.0 million aggregate stated liquidation amount of the Preferred Securities
and the $3.5 million capital contributed by Hvide in exchange for the Common
Securities. The Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of Hvide, whether under the Indenture or any existing
or other indenture that Hvide may enter into in the future or otherwise. See
"--Subordination."
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Concurrently with the issuance of the Preferred Securities, the Issuer
invested the proceeds thereof and the consideration paid by Hvide for the Common
Securities in the Debentures. The Debentures are in the principal amount equal
to the aggregate stated liquidation amount of the Preferred Securities plus
Hvide's concurrent investment in the Common Securities.
The Debentures are not subject to any sinking fund provision. The
entire principal amount of the Debentures will mature, and become due and
payable, together with any accrued and unpaid interest thereon, on June 15,
2012.
INTEREST
The Debentures bear interest at the annual rate of 6 1/2% per annum,
payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each
year, commencing on October 1, 1997 (each, an "Interest Payment Date"), to the
person in whose name each Debenture is registered at the close of business on
the fifteenth day (whether or not a Business Day) preceding such Interest
Payment Date (the "Regular Record Date"), subject to certain exceptions. It is
anticipated that, until the Liquidation, if any, of the Issuer, each Debenture
will be held in the name of the Trustee in trust for the benefit of the holders
of the Preferred Securities and the Common Securities. The amount of interest
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that if such
Business Day is in the next succeeding calendar year, then such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such Interest Payment Date. Accrued interest that is
not paid on the applicable Interest Payment Date will bear additional interest
on the amount thereof (to the extent permitted by law) at the stated rate per
annum, compounded quarterly. The term "interest" as used herein shall include
quarterly interest payments, interest on quarterly interest payments not paid on
the applicable Interest Payment Date, and Additional Sums, as applicable.
GLOBAL SECURITIES
If distributed to holders of the Preferred Securities in connection
with the involuntary or voluntary dissolution, winding-up or liquidation of the
Issuer as a result of the occurrence of a Special Event, the Debentures will be
issued in the same form as the Preferred Securities that such Debentures
replace. Any Global Certificate will be replaced by one or more global
securities (each, a "Global Security") registered in the name of the depositary
or its nominee. Except under the limited circumstances described below, the
Debentures represented by the Global Security will not be exchangeable for, and
will not otherwise be issuable as, Debentures in definitive form. The Global
Securities described above may not be transferred except 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 or to a successor depository or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in a Global Security.
Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to receive physical delivery of Debentures in
definitive form and will not be considered the holders
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thereof for any purpose under the Indenture, and no Global Security representing
Debentures shall be exchangeable, except for another Global Security of like
denomination and tenor to be registered in the name of the depository or its
nominee or to a successor depository or its nominee. Accordingly, each
beneficial owner of Preferred Securities must rely on the procedures of DTC, or
if such person is not a participant, on the procedures of the participant
through which such person owns its interest to exercise any rights of a holder
under the Indenture.
If Debentures are distributed to holders of Preferred Securities in
liquidation of such holders' interests in the Issuer and a Global Security is
issued, DTC will act as securities depository for the Debentures represented by
such Global Security. For a description of DTC and the general terms of the
depository arrangements, see "Description of the Preferred Securities--Certain
Book-Entry Procedures for Global Certificates." As of the date of this
Prospectus, the description therein of DTC's book-entry system and DTC's
practices as they relate to purchases, transfers, notices and payments with
respect to the Preferred Securities apply in all material respects to any debt
obligations represented by one or more Global Securities held by DTC. Hvide may
appoint a successor to DTC or any successor depository in the event DTC or such
depository is unable or unwilling to continue as a depository for the Global
Securities.
None of Hvide, the Indenture Trustee, any Paying Agent or the
Securities Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of the Global Security representing such Debentures or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
A Global Security shall be exchangeable for Debentures registered in
the names of persons other than DTC or its nominee only if (i) DTC notifies
Hvide that it is unwilling or unable to continue as a depository for such Global
Debenture and no successor depositary shall have been appointed by Hvide within
90 days, or if at any time DTC ceases to be a "clearing agency" registered under
the Exchange Act at a time when DTC is required to be so registered to act as
such depository and no such successor depository has been appointed within 90
days by the Company, (ii) Hvide in its sole discretion determines that such
Global Security shall be so exchangeable, or (iii) there shall have occurred and
be continuing an Event of Default with respect to such Global Security. Any
Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for definitive certificates registered in such names as DTC shall
direct. It is expected that such instructions will be based upon directions
received by DTC from its participants with respect to ownership of beneficial
interests in such Global Security. In the event that Debentures are issued in
definitive form, such Debentures will be in denominations of $50 and integral
multiples thereof and may be transferred or exchanged at the offices described
in "--Payment and Paying Agent" below.
PAYMENT AND PAYING AGENT
Payments on Debentures represented by a Global Security will be made to
DTC, as the depositary for the Debentures. In the event Debentures are issued in
definitive form, principal of and premium, if any, and any interest on
Debentures will be payable, the transfer of the Debentures will be registrable,
and the Debentures will be exchangeable for Debentures of other denominations of
a like aggregate principal amount at the corporate office of the Indenture
Trustee in the City of New York or at the office of such Paying Agent or Paying
Agents as Hvide may designate, except that at the option of Hvide payment of any
interest may be made (i) by check mailed to the address of the Person entitled
thereto as
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such address shall appear in the Securities Register or (ii) by wire transfer to
an account maintained by the Person entitled thereto as specified in the
Securities Register, provided that proper transfer instructions have been
received by the Regular Record Date. Payment of any interest on Debentures will
be made to the Person in whose name such Debentures are registered at the close
of business on the Regular Record Date for such interest, except in the case of
Defaulted Interest. The Regular Record Date for the interest payable on any
Interest Payment Date shall be the fifteenth day (whether or not a Business Day)
next preceding such Interest Payment Date. Hvide may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent.
Any monies deposited with the Indenture Trustee or any Paying Agent, or
then held by Hvide in trust, for the payment of the principal of and premium, if
any, or interest on any Debentures and remaining unclaimed for two years after
such principal and premium, if any, or interest has become due and payable
shall, at the request of Hvide, be repaid to Hvide and the holder of such
Debentures shall thereafter look, as a general unsecured creditor, only to Hvide
for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Event of Default under the Indenture has occurred and is
continuing, Hvide has the right under the Indenture to defer the payment of
interest on the Debentures at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the stated maturity of the
Debentures. At the end of such Extension Period, Hvide must pay all interest
then accrued and unpaid (together with interest thereon at the stated annual
rate, compounded quarterly, to the extent permitted by applicable law). During
an Extension Period, interest will continue to accrue and holders of Debentures
(or holders of Preferred Securities while the Preferred Securities are
outstanding) will be required to accrue interest income for United States
federal income tax purposes. See "Certain Federal Income Tax
Consequences--Original Issue Discount."
During any such Extension Period, Hvide shall not, and shall not permit
any subsidiary to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
Hvide's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of Hvide that rank
pari passu with or junior to the Debentures (other than in the case of both (i)
and (ii) (a) any dividend, redemption, liquidation, interest, principal or
guarantee payment by Hvide where the payment is made by way of securities
(including capital stock) that rank pari passu with or junior to the securities
on which such dividend, redemption, interest, principal or guarantee payment is
being made, (b) payments under the Guarantee, (c) purchases of Hvide Class A
Common Stock related to the issuance of Hvide Class A Common Stock under any of
Hvide's benefit plans for its directors, officers or employees, (d) as a result
of a reclassification of Hvide's capital stock or the exchange or conversion of
one series or class of Hvide's capital stock for another series or class of
Hvide's capital stock, and (e) the purchase of fractional interests in shares of
Hvide's capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged).
Prior to the termination of any such Extension Period, Hvide may
further extend the interest payment period, provided that no Extension Period
may exceed 20 consecutive quarters or extend beyond the stated maturity of the
Debentures. Upon the termination of any such Extension Period and the
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payment of all amounts then due on any Interest Payment Date, Hvide may elect to
begin a new Extension Period subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
Hvide shall give the Trustee, the Delaware Trustee, the Company Trustees and the
Indenture Trustee notice of its election to begin any Extension Period at least
one Business Day prior to the earlier of (i) the record date for the date
Distributions on the Preferred Securities (or, if no Preferred Securities are
outstanding, for the date interest on the Debentures) would have been payable
except for the election to begin such Extension Period and (ii) the date the
Trustee is (or, if no Preferred Securities are outstanding, the Indenture
Trustee is) required to give notice to The Nasdaq National Market or other
applicable self-regulatory organization or to holders of such Preferred
Securities (or, if no Preferred Securities are outstanding, to the holders of
such Debentures) of such election. The Indenture Trustee and the Trustee shall
give notice of Hvide's election to begin an Extension Period to the holders of
the Debentures and the Preferred Securities, respectively.
MANDATORY REDEMPTION
Upon repayment at maturity or as a result of acceleration upon the
occurrence of a Debenture Event of Default, Hvide will redeem the Debentures, in
whole but not in part, at a redemption price equal to 100% of the principal
amount thereof, together with any accrued and unpaid interest thereon. Any
payment pursuant to this provision shall be made prior to 12:00 noon, New York
City time, on the date of such repayment or acceleration or at such other time
on such earlier date as the parties thereto shall agree. The Debentures are not
entitled to the benefit of any sinking fund or, except as set forth above or as
a result of acceleration, any other provision for mandatory prepayment.
OPTIONAL REDEMPTION
On and after July 2, 2000, and subject to the next succeeding sentence,
Hvide will have the right, at any time and from time to time, to redeem the
Debentures, in whole or in part, upon notice given as provided below, during the
twelve-month periods beginning on July 2 in each of the following years and at
the indicated redemption prices (expressed as a percentage of the principal
amount of the Debentures being redeemed), together with any accrued but unpaid
interest on the portion being redeemed.
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
<S> <C> <C> <C>
2000................................... 104.55% 2004........................... 101.95%
2001................................... 103.90% 2005........................... 101.30%
2002................................... 103.25% 2006........................... 100.65%
2003................................... 102.60% 2007 and thereafter............ 100.00%
</TABLE>
For so long as the Issuer is the holder of all the outstanding
Debentures, the proceeds of any such redemption will be used by the Issuer to
redeem Preferred Securities and Common Securities in accordance with their
terms. Hvide may not redeem the Debentures in part unless all accrued and unpaid
interest has been paid in full on all outstanding Debentures. See "Description
of the Preferred Securities--Optional Redemption."
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Hvide also shall have the right to redeem the Debentures at any time
after July 2, 2000 upon the occurrence of a Tax Event as described in
"Description of the Preferred Securities--Special Event Exchange or Redemption"
at a redemption price equal to the principal amount thereof, plus any accrued
and unpaid interest.
If at any time following the Conversion Expiration Date, less than 5%
of the original aggregate principal amount of the Debentures remains
outstanding, such Debentures shall be redeemable at the option of Hvide, in
whole but not in part, at a redemption price equal to the principal amount
thereof, plus any accrued and unpaid interest.
REDEMPTION PROCEDURES
Notices of any redemption of the Debentures and the procedures for such
redemption shall be as provided with respect to the Preferred Securities under
"Description of the Preferred Securities--Redemption Procedures." Notice of any
redemption will be mailed at least 30 days but not more than 60 days before the
redemption date to each holder of Debentures to be redeemed at its registered
address. Unless Hvide defaults in payment of the redemption price, on and after
the redemption date interest ceases to accrue and conversion rights cease on
such Debentures or portions thereof called for redemption.
DISTRIBUTION OF DEBENTURES
At any time, Hvide will have the right to dissolve the Issuer and cause
the Debentures to be distributed to the holders of the Preferred Securities in
liquidation of the Issuer after satisfaction of liabilities to creditors of the
Issuer as provided by applicable law. If distributed to holders of Preferred
Securities in liquidation, the Debentures will initially be issued in the form
of one or more Global Securities and DTC, or any successor depositary for the
Preferred Securities, will act as depositary for the Debentures. It is
anticipated that the depositary arrangements for the Debentures would be
substantially identical to those in effect for the Preferred Securities. There
can be no assurance as to the market price of any Debentures that may be
distributed to the holders of Preferred Securities. For a description of DTC and
the terms of the depositary arrangement, see "Description of the Preferred
Securities--Certain Book-Entry Procedures for Global Certificates."
CONVERSION OF THE DEBENTURES
The Debentures are convertible at the option of the holders of the
Debentures into Hvide Class A Common Stock, at any time prior to redemption,
maturity or the Conversion Expiration Date, initially at the rate of 1.7544
shares of Hvide Class A Common Stock for each $50 in principal amount of
Debentures (equivalent to a conversion price of $28.50 per share of Hvide Class
A Common Stock), subject to the conversion price adjustments described under
"Description of the Preferred Securities--Conversion Rights." The Issuer has
covenanted for so long as the Preferred Securities are outstanding not to
convert Debentures except pursuant to a notice of conversion delivered to the
Conversion Agent by a holder of Preferred Securities. Upon surrender of such
Preferred Securities to the Conversion Agent for conversion, the Issuer will
distribute the commensurate principal amount of the Debentures to the Conversion
Agent on behalf of the holder of every Preferred Security so converted,
whereupon the Conversion Agent will convert such Debentures into Hvide Class A
Common Stock on behalf of such holder. Hvide's delivery to the holders of the
Debentures (through the Conversion Agent)
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of the fixed number of shares of Hvide Class A Common Stock into which the
Debentures are convertible (together with the cash payment, if any, in lieu of
fractional shares) will be deemed to satisfy Hvide's obligation to pay the
principal amount of the Debentures, and the accrued and unpaid interest
attributable to the period from the last date to which interest has been paid or
duly provided for; provided, however, that if any Debenture is converted on or
after a Regular Record Date for payment of interest, the interest payable on the
related Interest Payment Date with respect to such Debenture shall be paid to
the Issuer (which will distribute such interest to the holder) or other holder
of Debentures, as the case may be, despite such conversion; provided, further,
that if a redemption date falls between such Regular Record Date and the related
Interest Payment Date, the amount of such payment shall include interest accrued
to, but excluding, such redemption date.
For possible restrictions on the ability of non-U.S. citizens to
convert Debentures into Class A Common Stock, see "Risk Factors--Restriction on
Foreign Ownership of Common Stock; Possible Inability to Convert Preferred
Securities and Debentures."
EXPIRATION OF CONVERSION RIGHTS
The conversion rights of any Debentures held by the Issuer shall expire
upon the expiration of the conversion rights of the Preferred Securities on the
terms described above under "Description of the Preferred Securities--Conversion
Rights."
MODIFICATION OF INDENTURE
From time to time, Hvide and the Indenture Trustee may, without the
consent of the holders of Debentures, amend, waive or supplement the Indenture
for specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies (provided that any such action does not materially
adversely affect the interest of the holders of the Debentures, or the holders
of the Preferred Securities so long as they remain outstanding) and qualifying,
or maintaining the qualification of, the Indenture under the Trust Indenture
Act. The Indenture contains provisions permitting Hvide and the Indenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of the outstanding Debentures, to modify the Indenture in a
manner affecting the rights of the holders of the Debentures; provided that no
such modification may, without the consent of the holder of each outstanding
Debenture so affected, (i) change the stated maturity of the Debentures, or
reduce the principal amount thereof, or reduce any premium payable on the
redemption thereof, or reduce the rate or extend the time of payment of interest
thereon (other than deferrals of the payments of interest as described under
"--Option to Extend Interest Payment Period") or impair any right to institute
suit for the enforcement of any such payment, or adversely affect the
subordination provisions of the Indenture or any right to convert any Debentures
or (ii) reduce the percentage of principal amount of Debentures, the holders of
which are required to consent to any such modification of the Indenture,
provided that, so long as any of the Preferred Securities remain outstanding, no
such modification may be made that adversely affects the holders of such
Preferred Securities in any material respect, and no termination of the
Indenture may occur, and no waiver of any Debenture Event of Default or
compliance with any covenant under the Indentures shall be effective, without
the prior consent of the holders of at least a majority in aggregate
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liquidation amount of the Preferred Securities then outstanding unless and until
the principal of the Debentures and all accrued and unpaid interest thereon has
been paid in full; provided, however, that where a consent under the Indenture
would require the consent of each holder of Debentures affected thereby, no such
consent shall be given by the Trustee without the prior consent of each holder
of Preferred Securities.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events that has occurred and is continuing constitutes a "Debenture Event of
Default" with respect to such Debentures: (i) failure for 30 days to pay any
interest on the Debentures, when due (subject to the deferral of any due date in
the case of an Extension Period); or (ii) failure to pay any principal or
premium, if any, on the Debentures when due whether at maturity, upon
redemption, by declaration or otherwise; or (iii) failure by Hvide to deliver
shares of Hvide Class A Common Stock upon an appropriate election by holders of
Debentures to convert such Debentures; or (iv) failure to observe or perform in
any material respect certain other covenants contained in the Indenture for 90
days after written notice to Hvide from the Indenture Trustee or to the
Indenture Trustee and Hvide from the holders of at least 25% in aggregate
outstanding principal amount of such Debentures or by the holder or holders of
at least 25% in the aggregate outstanding liquidation amount of the Preferred
Securities; or (v) the dissolution, winding up or termination of the Trust,
except in connection with the distribution of Debentures to the holders of
Preferred Securities in liquidation of the Trust upon the redemption of all
outstanding Preferred Securities and in connection with certain mergers,
consolidations or amalgamations permitted by the Declaration; or (vi) certain
events in bankruptcy, insolvency or reorganization of Hvide.
The holders of a majority in aggregate outstanding principal amount of
the Debentures have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee. The Indenture
Trustee or the holders of not less than 25% in aggregate principal amount of the
Debentures then outstanding may declare the principal due and payable
immediately upon a Debenture Event of Default, and, should the Indenture Trustee
or the holders of the Debentures fail to make such declaration, the holders of
at least 25% in aggregate liquidation amount of the Preferred Securities then
outstanding shall have such right. The holders of a majority in aggregate
outstanding principal amount of the Debentures may annul and rescind such
declaration if the default (other than the non-payment of the principal of the
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Indenture Trustee
and, should the holders of the Debentures fail to annul and rescind such
declaration, the holders of a majority in aggregate liquidation amount of the
Preferred Securities then outstanding shall have such right.
The holders of a majority in aggregate outstanding principal amount of
the Debentures affected thereby may, on behalf of the holders of all the
Debentures, waive any past default, except a default in the payment of principal
or interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Indenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture
affected thereby
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and, should the holders of the Debentures fail to annul such declaration and
waive such default, the holders of a majority in aggregate liquidation amount of
the Preferred Securities shall have such right. Hvide is required to file
annually with the Indenture Trustee a certificate as to whether or not Hvide is
in compliance with all the conditions and covenants applicable to it under the
Indenture.
In case a Debenture Event of Default shall occur and be continuing as
to the Debentures, the Trustee will have the right to declare the principal of
and the interest on the Debentures and any other amounts payable under the
Indenture to be forthwith due and payable and to enforce its other rights as a
creditor with respect to the Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of Hvide to pay interest, premium, if any,
or principal on the Debentures on the date such interest or principal is
otherwise payable, a holder of Preferred Securities may institute a Direct
Action for payment after the respective due date specified in the Debentures.
Hvide may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the
Preferred Securities. Notwithstanding any payment made to such holder of
Preferred Securities by Hvide in connection with a Direct Action, Hvide shall
remain obligated to pay the principal of or interest on the Debentures held by
the Issuer or the Trustee and Hvide shall be subrogated to the rights of the
holder of such Preferred Securities with respect to payments on the Preferred
Securities in the extent of any payments made by Hvide to such holder in any
Direct Action.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that Hvide shall not consolidate with or merge
into any other Person, continue in another jurisdiction or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, and
no Person shall consolidate with or merge into Hvide or convey, transfer or
lease its properties and assets substantially or as an entirety to Hvide, unless
(i) in case Hvide consolidates with or merges into another Person or conveys,
transfers or leases its properties and assets substantially as an entirety to
any Person, the successor Person is organized under the laws of the United
States or any state or the District of Columbia, and such successor Person
expressly assumes Hvide's obligations on the Debentures; (ii) immediately after
giving effect thereto, no Debenture Event of Default, and no event which, after
notice or lapse of time or both, would become a Debenture Event of Default,
shall have happened and be continuing; (iii) in the case of the Debentures, such
transaction is permitted under the Declaration and Guarantee and does not give
rise to any breach or violation of the Declaration or Guarantee; and (iv)
certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Debentures protection in the event of a highly leveraged or other transaction
involving Hvide that may adversely affect holders of the Debentures.
EXPENSES OF ISSUER
The Indenture provides that Hvide will pay all fees and expenses
related to (i) the Original Offering of the Preferred Securities and the
Debentures, (ii) the organization, maintenance and dissolution of the Trust,
(iii) the retention of the Issuer Trustees, the Guarantee Trustee and the
Indenture Trustee
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and (iv) the enforcement by the Trustee of the rights of the holders of the
Preferred Securities. The payment of such fees and expenses is fully and
unconditionally guaranteed by Hvide.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Debentures
not previously delivered to the Indenture Trustee for cancellation (i) have
become due and payable or (ii) will become due and payable at their stated
maturity within one year or are to be called for redemption within one year
under irrevocable agreements satisfactory to the Indenture Trustee for the
giving of notice of redemption, and Hvide irrevocably deposits or causes to be
deposited with the Indenture Trustee trust funds, in trust, for the purpose and
in an amount in the currency or currencies in which the Debentures are payable
sufficient to pay and discharge the entire indebtedness on the Debentures not
previously delivered to the Indenture Trustee for cancellation, for the
principal and premium, if any, and interest to the date of the deposit or to the
stated maturity, as the case may be, then the Indenture will cease to be of
further effect (except as to Hvide's obligations to pay all other sums due
pursuant to the Indenture, to honor any conversion rights prior to the
redemption date or maturity date, and to provide the officers' certificates and
opinions of counsel described therein), and Hvide will be deemed to have
satisfied and discharged the Indenture.
SUBORDINATION
In the Indenture, Hvide has covenanted and agreed that any Debentures
issued thereunder will be subordinate and junior in right of payment to all
Senior Debt of Hvide whether now existing or hereafter incurred. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of Hvide, the holders of Senior Debt will first be
entitled to receive payment in full of principal of and premium, if any, and
interest, if any, on such Senior Debt before the Trustee, on behalf of the
holders of the Debentures, will be entitled to receive or retain any payment in
respect of the principal of and premium, if any, or interest, if any, on the
Debentures.
In the event of the acceleration of the maturity of any Debentures, 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
(including any amounts due upon acceleration) before the holders of Debentures
will be entitled to receive or retain any payment in respect of the principal of
or premium, if any, or interest, if any, on the Debentures.
No payment on account of principal (or premium, if any) or interest, if
any, in respect of the Debentures 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, or if any judicial proceeding shall be pending with respect to
any such default.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
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assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another person the payment of which, in either case, such
Person has guaranteed or for which such Person is responsible or liable,
directly or indirectly, as obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to Hvide whether or not
such claim for post-petition interest is allowed in such proceeding), on Debt of
Hvide, whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is pari
passu with, or subordinated to, the Debentures; provided, however, that Senior
Debt shall not be deemed to include: (i) any Debt of Hvide which, when incurred
and without respect to any election under Section 1111(b) of the Bankruptcy
Code, was without recourse to Hvide, (ii) any Debt of Hvide to any of its
subsidiaries, (iii) Debt to any employee of Hvide, (iv) any liability for taxes,
and (v) Debt or other monetary obligations to trade creditors or assumed by
Hvide or any of its subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services.
The Indenture places no limitation on the amount of additional Senior
Debt that may be incurred by Hvide.
GOVERNING LAW
The Indenture and the Debentures are governed by and construed in
accordance with the laws of the State of New York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee is under no obligation to exercise any of the
powers vested in it by the Indenture at the request of any holder of Debentures,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The Indenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Indenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
RELATIONSHIP AMONG THE PREFERRED
SECURITIES, THE DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by Hvide as and to the extent set
forth under "Description of the Guarantee." Taken together, Hvide's obligations
under the Debentures, the Indenture, the Declaration and the Guarantee provide,
in the aggregate, a full, irrevocable and unconditional guarantee of payments of
Distributions and other amounts due on the Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all
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of the other documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's obligations under the
Preferred Securities. If and to the extent that Hvide does not make payments on
the Debentures, the Issuer will not pay Distributions or other amounts due on
the Preferred Securities. The Guarantee does not cover payment of Distributions
when the Issuer does not have sufficient funds to pay such Distributions. In
such event, a holder of Preferred Securities may institute a Direct Action
directly against Hvide to enforce payment of such Distributions to such holder
after the respective due dates. The obligations of Hvide under the Guarantee are
subordinate and junior in right of payment to all other liabilities of Hvide;
and pari passu with any guarantee now or hereafter entered into by Hvide in
respect of any preferred or preference stock of any affiliate of Hvide.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
the Debentures, such payments will be sufficient to cover Distributions and
other payments due on the Preferred Securities, primarily because (i) the
aggregate principal amount of the Debentures will be equal to the sum of the
aggregate stated liquidation amount of the Preferred Securities and Common
Securities; (ii) the interest rate and interest and other payment dates on the
Debentures will match the Distribution rate and Distribution and other payment
dates for the Preferred Securities; (iii) Hvide shall pay for all and any costs,
expenses and liabilities of the Issuer except the Issuer's obligations to
holders of the Preferred Securities under such Preferred Securities; and (iv)
the Declaration further provides that the Issuer will not engage in any activity
that is not consistent with the limited purposes of the Issuer.
Notwithstanding anything to the contrary in the Indenture, Hvide has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent Hvide has theretofore made, or is concurrently on the
date of such payment making, a payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Securities may institute a legal proceeding
directly against Hvide to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer or any
other person or entity.
A default or event of default under any Senior Debt of Hvide will not
constitute a default under the Indenture or a Debenture Event of Default.
However, in the event of payment defaults under, or acceleration of, Senior Debt
of Hvide, the subordination provisions of the Indenture provide that no payments
may be made in respect of the Debentures until such Senior Debt has been paid in
full or any payment default thereunder has been cured or waived. Failure to make
required payments on the Debentures would constitute a Debenture Event of
Default.
LIMITED PURPOSE OF ISSUER
The Preferred Securities evidence a beneficial interest in the Issuer,
and the Issuer exists for the sole purpose of issuing the Preferred Securities
and Common Securities and investing the proceeds thereof in the Debentures. A
principal difference between the rights of a holder of Preferred Securities and
a holder of Debentures is that a holder of Debentures is entitled to receive
from Hvide the principal amount of and interest accrued on Debentures held,
while a holder of Preferred Securities is entitled to receive
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Distributions from the Issuer (or from Hvide under the applicable Guarantee) if
and to the extent the Issuer has funds available for the payment of such
Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or
liquidation of the Issuer involving the liquidation of the Debentures, the
holders of the Preferred Securities will be entitled to receive, out of assets
held by the Issuer, the Liquidation Distribution in cash. See "Description of
the Preferred Securities--Liquidation Distribution Upon Dissolution." Upon any
voluntary or involuntary liquidation or bankruptcy of Hvide, the Trustee, as
holder of the Debentures, would be a subordinated creditor of Hvide,
subordinated in right of payment to all Senior Debt, but entitled to receive
payment in full of principal and interest before any stockholders of Hvide
receive payments or distributions. Since Hvide is the guarantor under the
Guarantee and has agreed to pay for all costs, expenses and liabilities of the
Issuer (other than the Issuer's obligations to the holders of the Preferred
Securities), the positions of a holder of such Preferred Securities and a holder
of such Debentures relative to other creditors and to stockholders of Hvide in
the event of liquidation or bankruptcy of Hvide would be substantially the same.
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following is a description of the principal terms of certain of the
Company's indebtedness.
CREDIT FACILITY
The Company entered into a Credit Agreement, dated as of September 28,
1994, with Citibank, N. A., as Administrative Agent and Co-Agent, The First
National Bank of Boston, as Letter of Credit Agent and Co-Agent, and the lending
banks parties thereto (as amended, the "Credit Facility"). The Credit Facility
provides for a $20.0 million revolving line of credit, a $50.0 million vessel
acquisition credit line, and a $5.6 million letter of credit, all maturing
January 15, 2001, with the exception of the letter of credit, which matures on
January 15, 2000. There were no amounts outstanding under the Credit
Facility at June 30, 1997. Borrowings under the Credit Facility are
secured by preferred ship mortgages on all vessels owned by the Company,
assignments of all of the Company's receivables and earnings, and collateral
mortgages of spare parts, supplies, and fuel.
The letter of credit serves as collateral for a surety bond to ensure
payment of any final judgment in the pending litigation relating to the
reconstruction of the Seabulk America.
Covenants under the Credit Facility, among other things, (i) require
the Company to meet certain financial tests, including tests requiring the
maintenance of minimum interest coverage ratios, leverage ratios, levels of
liquidity, and cash flow ratios; (ii) require the Company to maintain certain
levels of collateral securing amounts outstanding under the Credit Facility;
(iii) limit the incurrence of additional indebtedness; (iv) limit purchases of
capital equipment and other capital expenditures; (v) restrict payments,
including dividends, with respect to shares of any class of capital stock; and
(vi) limit certain corporate acts of the Company, such as incurring debt,
creating liens, and entering into certain types of business transactions,
including mergers and joint ventures. The limitation on mergers generally
prohibits mergers other than acquisitions funded by the Credit Facility or
otherwise meeting certain requirements for such acquisitions, including the
requirements described above.
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Events of default under the Credit Facility include, among other
things, (i) any failure to pay principal thereunder when due, or to pay interest
or fees within three business days after the date due; (ii) the breach of
certain covenants or the inaccuracy of certain representations or warranties
made under the Credit Facility; (iii) any failure to pay amounts due on certain
indebtedness, or defaults that result in or permit the acceleration of such
indebtedness; (iv) certain events of bankruptcy, insolvency, or dissolution; (v)
certain judgments or orders; (vi) certain seizures, condemnations, or similar
actions pertaining to the Company's assets or business; (vii) the invalidity of
the security interests granted under the Credit Facility; and (viii) a Change in
Control (as defined therein).
LONG-TERM CHARTER OBLIGATIONS
Title XI Bonds. Two of the Company's subsidiaries are parties to
long-term, "hell or high water" charters of the Seabulk Challenger and the
Seabulk Magnachem, the performance of which is guaranteed by the Company. Both
vessels were financed by the issuance of U.S. Government Guaranteed Ship
Financing Bonds issued pursuant to Title XI in leveraged lease transactions. As
of December 31, 1996, the total remaining outstanding obligations of the Company
under the charters for the Seabulk Challenger and Seabulk Magnachem are $4.3
million and $10.6 million, respectively. The Company's aggregate payments due
under such charters for 1997 and 1998 are $3.2 million and $3.3 million,
respectively. The long-term charter for the Seabulk Challenger is coterminous
with the maturity date of the respective obligation, and the charter for the
Seabulk Magnachem terminates in 2002. The Company has the option to purchase the
vessels or renew the charters at fair market value and, with respect to the
Seabulk Magnachem, has the right to share in the residual value proceeds of any
sale to a third party.
In connection with the acquisition of the OMI Chemical Carriers in
August 1996, the Company assumed approximately $34.7 million of U.S. Government
Guaranteed Ship Financing Bonds issued pursuant to Title XI in five distinct
series bearing interest at an average rate of 7.65%.
Repayment of the Company's Title XI bonds is guaranteed by the full
faith and credit of the United States, acting through the Maritime
Administration. As security for such guarantee, the vessels are mortgaged to the
United States, and the subsidiaries that own or charter the vessels are each
party to a security agreement and a financial agreement with the United States
containing various operating covenants and financial conditions that, among
other things, restrict the ability of each to (i) incur additional indebtedness,
(ii) make certain loans, advances, or investments, (iii) create certain liens,
(iv) pay stock dividends, (v) sell, transfer, or dispose of assets, (vi) change
the nature of its business, (vii) make capital expenditures, (viii) effect
certain mergers, consolidations, or similar business combinations, or (ix) enter
into certain vessel charter arrangements. The agreements specify various events
of default, including failure to pay charter hire, pay certain guarantee fees,
satisfy certain covenants, maintain required insurance, and maintain U.S.
citizenship (within the meaning of Section 2 of the Shipping Act, 1916) and
certain events of insolvency or bankruptcy.
Bareboat Charters. The Company is party to bareboat charters relating
to four offshore service vessels, two of which expire in June 2001 and two of
which expire in January 2002. The Company has an option to purchase each of
these vessels for a nominal amount upon the expiration of the charters. The
Company is also party to two bareboat charters relating to a total of nine crew
boats. The charter
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on one crew boat expires in 2002 with an option to purchase the vessel for $0.4
million. The charter on the remaining eight crew boats expires in 2004 with an
option to purchase the vessels for a nominal amount. In addition, the Company is
party to a bareboat charter on a tractor tug which expires in 2010 with an
option to purchase the vessel for $1.6 million.
DESCRIPTION OF HVIDE CAPITAL STOCK
The following summary description of the Company's capital stock is
qualified in its entirety by reference to the Articles of Incorporation and its
Amended and Restated Bylaws (the "Bylaws"), copies of which have been included
as exhibits to the Registration Statement relating to the IPO, and reference to
Florida law. All capitalized terms used and not defined below have the
respective meanings assigned to them in the Articles of Incorporation.
The authorized capital stock of the Company consists of 100,000,000
shares of Class A Common Stock, par value $.001 per share, of which 12,040,388
shares were issued and outstanding as of June 30, 1997, 5,000,000 shares of
Class B Common Stock, par value $.001 per share, of which 3,181,936 shares
were issued and outstanding as of June 30, 1997, and 10,000,000 shares of
Preferred Stock, par value $1.00 per share, none of which are issued and
outstanding.
COMMON STOCK
The holders of Common Stock are entitled to receive such dividends, in
cash, property or securities, as may be declared from time to time by the Board
of Directors out of funds legally available therefor. The holders of Common
Stock are entitled to participate in dividends ratably on a per share basis. If
dividends consist of Common Stock or other voting securities of the Company, the
voting rights of each such security shall correspond to the voting rights of the
security held. Any dividend declared for one class of Common Stock must be
declared for the other classes of Common Stock. The holders of Common Stock have
no preemptive or redemption rights and are not subject to future calls or
assessments by the Company. Subject to the prior rights of holders, if any, of
any outstanding class or series of capital stock having a preference in relation
to the Common Stock as to distributions upon dissolution, liquidation, and
winding-up of the Company, holders of Common Stock are entitled to share ratably
in any assets of the Company that remain after payment in full of all debts and
liabilities of the Company.
The holders of Class A Common Stock and Class B Common Stock vote
together as a single class on all matters submitted to a vote of the
stockholders, including the election of directors, except as described below
under "--Foreign Ownership Restrictions" and as provided under Florida law. In
all matters submitted to a vote of the stockholders, including the election of
directors, and except as described below under "--Foreign Ownership
Restrictions" and under "--Certain Provisions of Articles of Incorporation and
Bylaws," each share of Class A Common Stock is entitled to one vote and each
share of Class B Common Stock is entitled to ten votes. The stockholders do not
have cumulative voting rights.
The Class B Common Stock can be owned only by (i) J. Erik Hvide and,
subject to certain limitations set forth in the Articles of Incorporation, any
person related to him by kinship or marriage, trusts or similar arrangements
established solely on the behalf of one or more of them, and partnerships and
other entities that are wholly owned by them (collectively, the "Hvide Family");
or (ii) the Investor
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Group and its affiliates. If the ownership or beneficial interest in any share
of Class B Common Stock ceases to be vested in any of these persons, then such
share will automatically and immediately convert into a share of Class A Common
Stock, although such a conversion will not occur where Class B Common Stock is
transferred from one Hvide Family member, upon death, to another Hvide Family
member.
Except as described below under "--Foreign Ownership Restrictions,"
each holder of Class B Common Stock may elect at any time to convert any of his
shares, share for share, into Class A Common Stock.
The Hvide Family and the Investor Group hold 51.0% and 49.0%, respectively,
of the outstanding Class B Common Stock. The Hvide Family and the Investor Group
own 10.1% and 13.9%, respectively, of the combined classes of Common Stock and
each controls 36.3% of the voting power and together control the management and
affairs of the Company and any corporate actions requiring stockholder approval.
For information concerning possible changes in these amounts, see "--Contingent
Share Issuance Agreement."
PREFERRED STOCK
The Board of Directors has the authority, without further action by the
stockholders, to issue from time to time shares of Preferred Stock in one or
more series and to fix, with respect to each series, the number of shares,
voting powers, designations, relative rights, preferences (including seniority
upon liquidation), privileges, and restrictions thereof. The rights,
preferences, privileges, and restrictions of different series of Preferred Stock
may differ with respect to dividend rates, amounts payable on liquidation,
voting rights, conversion rights, redemption provisions, sinking fund
provisions, and other matters. The Preferred Stock is subject to the dual stock
certificate system described below under "--Foreign Ownership Restrictions."
The issuance of Preferred Stock could decrease the amount of earnings
and assets available for distribution to holders of Common Stock, could
adversely affect the rights and powers, including voting and distribution
rights, of holders of Common Stock and could have the effect of delaying,
deferring, or preventing a change in control of the Company. Except as otherwise
provided by law, the holders of any series of Preferred Stock may be given the
right, voting separately as a class, to elect one or more directors of the
Company. The term of any such director would expire at the next succeeding
annual meeting of shareholders.
The Company has no present intention to issue any shares of Preferred
Stock.
FOREIGN OWNERSHIP RESTRICTIONS
The Articles of Incorporation (i) contain provisions limiting the aggregate
percentage ownership by Non-Citizens of each class of the Company's capital
stock (including the Class A Common Stock and the Class B Common Stock) to
24.99% of the outstanding shares of each such class (the "Permitted Percentage")
to ensure that such foreign ownership will not exceed the maximum percentage
permitted by applicable federal law (presently 25.0%), (ii) require institution
of a dual stock certificate system to help determine such ownership, and (iii)
permit the Board of Directors to make such determinations as may reasonably be
necessary to ascertain such ownership and implement such limitations. These
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provisions are intended to protect the Company's ability to operate its vessels
in the U.S. domestic trade governed by the Jones Act. The ability of the Company
to so operate is necessary to avoid default under certain of the Company's
financings, may enhance the Company's ability to incur additional debt, and may
have other effects upon the Company. See "Risk Factors--Restriction on Foreign
Ownership; Possible Inability to Convert Preferred Securities and Debentures."
To provide a method to enable the Company reasonably to determine stock
ownership by Non-Citizens, the Articles of Incorporation require the Company to
institute (and to implement through the transfer agent for the Common Stock) a
dual stock certificate system, pursuant to which certificates representing
shares of Common Stock will bear legends that designate such certificates as
either "citizen" or "non-citizen," depending on the citizenship of the owner.
Accordingly, stock certificates are denominated as "citizen" (blue) in respect
of Class A Common Stock owned by Citizens and as "non-citizen" (red) in respect
of Class A Common Stock owned by Non-Citizens. The Company may also issue
non-certificated shares through depositories if the Company determines such
depositories have established procedures that allow the Company to monitor the
ownership of Common Stock by Non-Citizens.
For purposes of the dual stock certificate system, a "Non-Citizen" is
defined as any person other than a Citizen, and a "Citizen" is defined as: (i)
any individual who is a citizen of the U.S. by birth, naturalization, or as
otherwise authorized by law; (ii) any corporation (a) organized under the laws
of the U.S., or a state, territory, district, or possession thereof, (b) of
which title to not less than 75% of its stock is beneficially owned by and
vested in Citizens, free from any trust or fiduciary obligation in favor of
Non-Citizens, (c) of which not less than 75% of the voting power is vested in
Citizens, free from any contract or understanding through which it is arranged
that such voting power may be exercised directly or indirectly in behalf of
Non-Citizens, (d) of which there are no other means by which control is
conferred upon or permitted to be exercised by Non-Citizens, (e) whose president
or chief executive officer, chairman of the board of directors and all officers
authorized to act in their absence or disability are Citizens, and (f) of which
more than 50% of that number of its directors necessary to constitute a quorum
are Citizens; (iii) any partnership (a) organized under the laws of the U.S., or
a state, territory, district, or possession thereof, (b) all general partners of
which are Citizens, and (c) of which not less than a 75% interest is
beneficially owned and controlled by, and vested in, Citizens, free and clear of
any trust or fiduciary obligation in favor of Non-Citizens; (iv) any association
(a) organized under the laws of the U.S., or a state, territory, district, or
possession thereof, (b) of which 100% of the members are Citizens, (c) whose
president, chief executive officer, or equivalent position, chairman of the
board of directors, or equivalent committee or body, and all persons authorized
to act in their absence or disability are Citizens, (d) of which not less than
75% of the voting power is beneficially owned by Citizens, free and clear of any
trust or fiduciary obligation in favor of Non-Citizens, and (e) of which more
than 50% of that number of its directors or equivalent persons necessary to
constitute a quorum are Citizens; (v) any limited liability company (a)
organized under the laws of the U.S., or a state, territory, district or
possession thereof, (b) of which not less than 75% of the membership interests
are beneficially owned by and vested in Citizens, free from any trust or
fiduciary obligation in favor of Non-Citizens, and the remaining membership
interests are beneficially owned by and vested in persons meeting the
requirements of 46 U.S.C. Sec. 12102(a), (c) of which not less than 75% of the
voting power is vested in Citizens, free from any contract or understanding
through which it is arranged that such voting power may be exercised directly or
indirectly in behalf of Non-Citizens, (d) of which there are no other means by
which control is conferred upon or permitted to be exercised by Non-Citizens,
(e) whose president or other chief executive officer or equivalent position,
chairman of the board of directors or equivalent committee or
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body, managing members (or equivalent), if any, and all persons authorized to
act in their absence or disability are citizens, free and clear of any trust or
fiduciary obligation in favor of any Non-Citizens, and (f) of which more than
50% of that number of its directors or equivalent persons necessary to
constitute a quorum are Citizens; (vi) any joint venture, if not an association,
corporation, partnership, or limited liability company (a) organized under the
laws of the U.S., or a state, territory, district, or possession thereof, and
(b) of which 100% of the equity is beneficially owned and vested in Citizens,
free and clear of any trust or fiduciary obligation in favor of any
Non-Citizens; and (vii) any trust (a) domiciled in and existing under the laws
of the U.S., or a state, territory, district, or possession thereof, (b) the
trustee of which is a Citizen, and (c) of which not less than a 75% interest is
held for the benefit of Citizens, free and clear of any trust or fiduciary
obligation in favor of any Non-Citizens. The foregoing definition is applicable
at all tiers of ownership and in both form and substance at each tier of
ownership.
Shares of Common Stock are transferable to Citizens at any time and are
transferable to Non-Citizens if, at the time of such transfer, the transfer
would not increase the aggregate ownership by Non-Citizens of that particular
class of Common Stock above the Permitted Percentage in relation to the total
outstanding shares of that particular class of Common Stock. Non-Citizen
certificates may be converted to Citizen certificates upon a showing,
satisfactory to the Company, that the holder is a Citizen. Any purported
transfer to Non-Citizens of shares or of an interest in shares of the Company
represented by a Citizen certificate in excess of the Permitted Percentage will
be ineffective as against the Company for all purposes (including for purposes
of voting, dividends, and any other distribution, upon liquidation or
otherwise). In addition, the shares may not be transferred on the books of the
Company, and the Company, whether or not such stock certificate is validly
issued, may refuse to recognize the holder thereof as a stockholder of the
Company except to the extent necessary to effect any remedy available to the
Company. Subject to the foregoing limitations, upon surrender of any stock
certificate for transfer, the transferee will receive citizen (blue)
certificates or non-citizen (red) certificates, as applicable.
The Articles of Incorporation establish procedures with respect to the
transfer of shares to enforce the limitations referred to above and authorize
the Board of Directors to implement such procedures. The Board of Directors may
take other ministerial actions or make interpretations of the Company's foreign
ownership policy as it deems necessary in order to implement the policy.
Pursuant to the procedures established in the Articles of Incorporation, as a
condition precedent to each issuance and/or transfer of stock certificates
representing shares of Common Stock (including the shares of Class A Common
Stock being sold in the Offering), a citizenship certificate will be required
from all transferees (and from any recipient upon original issuance) of Common
Stock and, with respect to the beneficial owner of the Common Stock being
transferred, if the transferee (or the original recipient) is acting as a
fiduciary or nominee for such beneficial owner. The registration of the transfer
(or original issuance) will be denied upon refusal to furnish such citizenship
certificate, which must provide information about the purported transferee's or
beneficial owner's citizenship. Furthermore, as part of the dual stock
certificate system, depositories holding shares of the Company's Common Stock
will be required to maintain separate accounts for "Citizen" and "Non-Citizen"
shares. When the beneficial ownership of such shares is transferred, the
depositories' participants will be required to advise such depositories as to
which account the transferred shares should be held. In addition, to the extent
necessary to enable the Company to determine the number of shares owned by
Non-Citizens, the Company may from time to time require
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record holders and beneficial owners of shares of Common Stock to confirm their
citizenship status and may, in the discretion of the Board of Directors,
temporarily withhold dividends payable to, and deny voting rights to, any such
record holder or beneficial owner until confirmation of citizenship is received.
Should the Company (or its transfer agent for the Common Stock) become
aware that the ownership by Non-Citizens of Common Stock at any time exceeds the
Permitted Percentage (the "Excess Shares"), the Board of Directors is authorized
to withhold dividends and other distributions temporarily on the Excess Shares,
pending the transfer of such shares to a Citizen or the reduction in the
percentage of shares owned by Non-Citizens to or below the Permitted Percentage,
and to deny voting rights with respect to the Excess Shares. If dividends and
distributions are to be withheld, they will be set aside for the account of the
Excess Shares. At such time as such shares are transferred to a Citizen or the
ownership of such shares by Non-Citizens will not result in aggregate ownership
by Non-Citizens in excess of the Permitted Percentage, the dividends withheld
shall be paid to the then record holders of the related shares. Excess Shares
shall, so long as the excess exists, not be deemed to be outstanding for
purposes of determining the vote required on any matter brought before the
stockholders for a vote. The Articles of Incorporation provide that the Board of
Directors has the power, in its reasonable discretion and based upon the records
maintained by the Company's transfer agent, to determine those shares of Common
Stock that constitute the Excess Shares. Such determination will be made by
reference to the date or dates on which such shares were purchased by
Non-Citizens, starting with the most recent acquisition of shares by a
Non-Citizen and including, in reverse chronological order, all other
acquisitions of shares by Non-Citizens from and after the acquisition that first
caused the Permitted Percentage to be exceeded; provided that Excess Shares
resulting from a determination that a record holder or beneficial owner is no
longer a Citizen will be deemed to have been acquired as of the date of such
determination. To satisfy the Permitted Percentage described above, the Articles
of Incorporation authorize the Board of Directors, in its discretion, to redeem
(upon written notice) Excess Shares in order to reduce the aggregate ownership
by Non-Citizens to the Permitted Percentage. As long as the shares of Class A
Common Stock offered hereby continue to be authorized for quotation on the
Nasdaq National Market, the redemption price will be the average of the closing
sale price of the shares (as reported by the Nasdaq National Market) during the
30 trading days next preceding the date of the notice of redemption. The
redemption price for Excess Shares will be payable in cash. In the event the
Company is not permitted by applicable law to make such redemption or the Board
of Directors, in its discretion, elects not to make such redemption, the Company
will give notice to the holders of Class B Common Stock and those of whom are
Citizens may elect to purchase their pro rata portion of the Excess Shares by
delivering written notice of such election within 30 days of receipt of the
Company's notice.
POSSIBLE ANTI-TAKEOVER PROVISIONS
Florida Business Corporation Act. The Company is subject to Sections
607.0901 and 607.0902 of the Florida Business Corporation Act ("FBCA"), which
regulate the acquisition and exercise of corporate control.
Under Section 607.0902 of the FBCA, "control shares" of certain
corporations acquired in a "control share acquisition," with certain exceptions,
have no voting rights unless such rights are granted pursuant to a vote of the
holders of a majority of the corporation's voting stock (excluding all
"interested shares"). "Control shares" are shares that, when added to all other
shares which a person owns or has the power to vote, would give that person any
of the following ranges of voting power: (i) one-fifth or more but less than
one-third of the voting power; (ii) one-third or more but less than a majority
of the
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voting power; and (iii) more than a majority of the voting power. A "control
share acquisition" is the acquisition of ownership of, or the power to vote,
outstanding control shares. Shares acquired within 90 days, or as part of a plan
to effectuate a control share acquisition, are deemed to have been acquired in
the same transaction. "Interested shares" include shares held by the person
attempting to effectuate the control share acquisition or any officer or
employee-director of the corporation. A corporation may elect to not be governed
by Section 607.0902 of the FBCA in its articles of incorporation or bylaws.
Section 607.0901 of the FBCA requires that certain transactions between
an interested stockholder (in general, a stockholder that beneficially owns more
than 10% of a corporation's outstanding voting stock) and a corporation be
approved by the affirmative vote of the holders of two-thirds of the
corporation's voting shares (excluding those shares beneficially owned by the
interested stockholder). In general, such approval will not be required if the
transaction is approved by a majority of disinterested directors, the interested
stockholder has been the beneficial owner of at least 80% of the corporation's
outstanding voting stock for at least the preceding five years, the interested
stockholder is the beneficial owner of at least 90% of the outstanding voting
stock of the corporation (excluding stock acquired directly from the corporation
in a transaction not approved by a majority of the disinterested directors), or
the consideration paid in the affiliated transaction satisfies the statutory
"fair price" formula and certain other conditions are met. Transactions covered
by Section 607.0901 include mergers, consolidations, sales of assets having an
aggregate fair market value of 5% or more of the aggregate fair market value of
all the corporation's assets on a consolidated basis or of all the corporation's
outstanding stock or representing 5% or more of the corporation's earning power
or net income on a consolidated basis, transfers of shares having an aggregate
fair market value of 5% or more of the aggregate fair market value of all
outstanding shares of the corporation, liquidations, dissolutions,
reclassifications, recapitalizations, and loans. A corporation may elect, by the
vote of a majority of the outstanding voting stock (not including shares held by
an interested stockholder), by amending such corporation's articles of
incorporation or bylaws, to not be subject to the provisions of Section 607.0901
of the FBCA. Any such election, however, will not be effective until 18 months
after it is made, and will not apply to any affiliated transaction between such
corporation and someone who was an interested stockholder prior to the effective
date of such amendment.
Each of the foregoing provisions of the FBCA could have the effect of
delaying or making it more difficult to effect a change of control or management
of the Company, even though such a change may be beneficial to the Company and
its stockholders.
Dual Classes of Common Stock. The Class A Common Stock entitles its
holders to one vote per share, and the Class B Common Stock entitles its holders
to ten votes per share. Accordingly, upon consummation of the Offering, the
Hvide Family and the Investor Group, as the holders of all the outstanding Class
B Common Stock, will be able to control the vote on all matters submitted to a
vote of the holders of the Common Stock, and such control may have the effect of
discouraging certain types of transactions involving an actual or potential
change of control of the Company, including transactions in which the holders of
Class A Common Stock might otherwise receive a premium for their shares over
then-current market prices.
Board of Directors. In all elections of directors, except elections, if
any, for directors for Preferred Stock, as described in "--Preferred Stock," the
holders of the Class A Common Stock and Class B Common Stock vote together as a
class, with each share of Class A Common Stock entitled to one vote and each
share of Class B Common Stock entitled to ten votes. Neither class has
cumulative
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voting rights. As a result of their ownership of Class B Common Stock, the Hvide
Family and the Investor Group will, upon consummation of the Offering, have the
ability to elect all of the members of the Company's Board of Directors. Under
the terms of the Shareholders Agreement, the Hvide Family and the Investor Group
have the ability to nominate eight and up to three persons, respectively, to the
Company's Board of Directors. In addition, pursuant to the Articles of
Incorporation, the Board of Directors is divided into three classes of directors
serving staggered three-year terms as well as directors, if any, for Preferred
Stock who serve one-year terms. As a result, approximately one third of the
Board of Directors is elected each year. Each of these provisions could have the
effect of delaying or making it more difficult to effect a change in control or
management of the Company, even though such a change may be beneficial to the
Company and its stockholders.
Restrictions on Taking Stockholder Action. The Company's Bylaws provide
that a stockholder must notify the Company in advance of such holder's intent to
bring up items of business or nominate directors at any annual meeting of
stockholders. With respect to other items of business, the Bylaws provide that a
stockholder's notice must be given in accordance with the procedures set forth
in Rule 14a- 8 of Regulation 14A under the Securities Exchange Act of 1934, as
amended, which generally requires that such proposals be received by the Company
not less than 120 days prior to the anniversary date that proxy solicitation
materials were sent out for the immediately preceding annual meeting of
stockholders of the Company. As permitted by the FBCA, pursuant to the Company's
Articles of Incorporation, stockholders may only call a special meeting of
stockholders when the holders of not less than 50% of the shares entitled to
vote make written demand on the Company for such a meeting.
Authorized but Unissued Capital Stock. One of the effects of the
existence of authorized but unissued Common Stock and undesignated Preferred
Stock may be to enable the Board of Directors to make more difficult or to
discourage an attempt to obtain control of the Company by means of a merger,
tender offer, proxy contest, or otherwise, and thereby to protect the continuity
of the Company's management. If, in the exercise of its fiduciary obligations,
the Board of Directors were to determine that a takeover proposal was not in the
Company's best interest, such shares could be issued by the Board of Directors
without stockholder approval in one or more transactions that might prevent or
make more difficult or costly the completion of the takeover transaction by
diluting the voting or other rights of the proposed acquiror or insurgent
stockholder group, by creating a substantial voting block in institutional or
other hands that might undertake to support the position of the incumbent Board
of Directors, by effecting an acquisition that might complicate or preclude the
takeover, or otherwise. In this regard, the Articles of Incorporation grant the
Board of Directors broad power to establish the rights and preferences of the
authorized and unissued Preferred Stock, one or more series of which could be
issued entitling holders (i) to vote separately as a class on any proposed
merger or consolidation, (ii) to cast a proportionately larger vote together
with the Common Stock on any such transaction or for all purposes, (iii) to
elect directors having terms of office or voting rights greater than those of
other directors, (iv) to convert Preferred Stock into a greater number of shares
of Common Stock or other securities, (v) to demand redemption at a specified
price under prescribed circumstances related to a change of control, or (vi) to
exercise other rights designated to impede a takeover. The issuance of shares of
Preferred Stock pursuant to the Board of Directors' authority described above
may adversely effect the rights of holders of the Common Stock.
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CERTAIN PROVISIONS OF ARTICLES OF INCORPORATION AND BYLAWS
Rights of Approval. So long as the Investor Group owns at least 5% of
the Company's outstanding Class B Common Stock, subject to the following
exception, the following actions must be approved by holders of at least 95% of
the Class B Common Stock: (i) engagement of the Company or its subsidiaries in
any material new business; (ii) a merger involving the Company or a sale of all
or substantially all of the Company's assets; (iii) a recapitalization or
voluntary bankruptcy filing; (iv) a capital investment, acquisition, or asset
sale in excess of $5.0 million; (v) borrowings or issuances of securities in
excess of $5.0 million; or (vi) amendment to the Articles of Incorporation
reducing or delegating the authority of the Board of Directors or affecting the
rights of holders of shares of Class B Common Stock. After September 30, 1999,
however, a merger or sale of substantially all of the Company's assets no longer
will require the approval of holders of 95% of the Class B Common Stock. In
addition, so long as the Investor Group owns at least 25% of the Company's
outstanding Class B Common Stock, the appointment of a new chief executive
officer must be approved by the holders of at least 75% of the Class B Common
Stock. As of June 30, 1997, the Investor Group owned of record 1,650,470 shares
of Class B Common Stock representing 51.9% of the outstanding Class B Common
Stock on such date. The Investor Group is obligated, however, to exchange
181,948 shares for shares of Class A Common Stock. See "--Contingent Share
Issuance Agreement."
Liability of Directors and Officers. The FBCA permits corporations to
(i) include provisions in their articles of incorporation that limit the
personal liability of directors for monetary damages resulting from breaches of
the duty of care, subject to certain exceptions, and (ii) indemnify directors
and officers, among others, in certain circumstances for their expenses and
liabilities incurred in connection with defending pending or threatened suits.
The Articles of Incorporation include a provision that eliminates the
personal liability of a director to the Company and its stockholders for
monetary damages resulting from breaches of the duty of care to the fullest
extent permitted by the FBCA and further provide that any amendment or repeal of
that provision will not adversely affect any right or protection of a director
of the Company existing at the time of such amendment, modification, or repeal
to any director for acts or omissions occurring prior to such amendment.
Pursuant to the Articles of Incorporation, the Board of Directors has
indemnified the Company's current and former directors, officers, employees, and
agents to the fullest extent permitted, from time to time, under the FBCA as
presently or hereafter in effect. The Company also may enter into agreements
providing for greater or different indemnification of any of these persons. The
Company maintains an insurance policy covering the liability of its directors
and officers for actions taken in their official capacity.
Citizenship of Directors and Officers. The Company's Bylaws provide
that the Chairman of the Board of Directors, Chief Executive Officer, President,
and all Vice Presidents must be Citizens, and restrict any officer who is not a
Citizen from acting in such capacities in the absence or disability of such
persons. The Bylaws further provide that the number of Non-Citizen directors
shall not exceed a minority of the number necessary to constitute a quorum for
the transaction of business.
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SHAREHOLDERS AGREEMENT
In connection with the September 30, 1994 issuance of debt and equity
securities to the Investor Group, the Company, J. Erik Hvide, the Hvide Trusts,
and the Investor Group entered into an agreement granting certain voting and
approval rights to the Investor Group and the Hvide Family. Immediately prior to
the IPO, that agreement was terminated and Mr. Hvide, the Hvide Trusts, and the
Investor Group entered into a new agreement (the "Shareholders Agreement") that
provides as follows:
Designations to the Board of Directors. The Investor Group may
initially nominate three persons to the Board of Directors and must vote all its
shares so as to elect eight other persons nominated to the Board of Directors by
Mr. J. Erik Hvide. Of these eight nominees, one will be Mr. Hvide, no more than
three others may be employees of the Company, its subsidiaries or members of the
Hvide Family, and the remainder must be independent of Mr. Hvide, the Company,
and its subsidiaries. In addition, J. Erik Hvide and the Hvide Trusts must vote
their shares to elect the three Investor Group nominees. The number of nominees
that the Investor Group is entitled to designate will be reduced by one at such
times as the Investor Group's Primary Economic Interest (as defined in the
Shareholders Agreement) drop below 20%, 10%, and 5%, respectively, of the
Company's outstanding Common Stock. The Investor Group may remove their
nominees, with or without cause, and may nominate successors to their nominees.
All director nominees must be U.S. citizens.
Right of First Refusal. Mr. Hvide (together with the Hvide Trusts) and the
Investor Group, respectively, have granted a right of first refusal for each to
purchase the other's stock in certain circumstances.
Share Adjustment. The Investor Group has agreed that, if following the
issuance of the CSIs (as defined below), the aggregate votes held by the
Investor Group by virtue of its ownership of Class A and Class B Common Stock
would exceed the votes held by the Hvide Family by virtue of its ownership of
Class A and Class B Common Stock, the Investor Group will convert sufficient
Class B Common Stock to Class A Common Stock to allow the Hvide Family to
maintain a one vote majority over the Investor Group.
The rights granted to the Investor Group under the Shareholders
Agreement are in addition to the rights granted to the Investor Group under the
Articles of Incorporation. See "--Certain Provisions of Articles of
Incorporation and Bylaws."
CONTINGENT SHARE ISSUANCE AGREEMENT
Also in connection with the issuance of debt securities to the Investor
Group, the Company and the Investor Group entered into a Contingent Share
Issuance Agreement (the "CSI Agreement"). The agreement, as amended and restated
pursuant to the Recapitalization Agreement, provides for the issuance of
additional shares of Class A Common Stock to the Investor Group to the extent
necessary for such purchasers to earn a specified All-in Return (as defined
below) on their investment. Mr. Hvide and the Hvide Trusts agreed in the
Shareholders Agreement to contribute to the Company a number of shares of Class
B Common Stock equal to the number of shares of Common Stock issued by the
Company pursuant to the CSI Agreement.
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Pursuant to the CSI Agreement, on June 10, 1997 the Company issued 237,641
shares of Class A Common Stock to the Investor Group and Mr. Hvide and the Hvide
Trusts contributed 237,641 shares of Class B Common Stock to the Company. While
the Company and Mr. Hvide believe that the issuance of such shares constituted
full performance of the Company's obligations under the CSI Agreement, the
Investor Group has advised the Company that it believes the Company is obligated
to issue additional shares to it under the agreement. The Investor Group has
also declined to exchange 181,948 shares of its Class B Common Stock for shares
of Class A Common Stock in accordance with the Shareholders Agreement. See
"--Shareholders Agreement--Share Adjustment. Depending upon the ultimate
resolution of this dispute, the Investor Group could receive additional shares
of Class A Common Stock from the Company, in which event Mr. Hvide and the Hvide
Trusts would contribute a like number of shares of Class B Common Stock to the
Company. As a result of the provision of the Shareholders Agreement requiring
the Investor Group to convert sufficient Class B Common Stock to Class A Common
Stock to allow the Hvide Family to maintain a one-vote majority over the
Investor Group, the issuance of any such additional shares to the Investor Group
and corresponding contribution by Mr. Hvide and the Hvide Trusts would result in
a reduction in Mr. Hvide's and the Investor Group's voting power.
REGISTRATION RIGHTS AGREEMENT
The Company and the Investor Group have entered into a registration
rights agreement. Under such registration rights agreement, the Investor Group
has the right to demand that its shares of Common Stock be registered for sale
pursuant to the requirements of the Securities Act, up to three times, subject
to certain deferral rights of the Company. Each of the members of the Investor
Group has the right to request that its shares be included in any registered
underwritten public offering of the Company's Common Stock, subject to certain
cutbacks.
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, LLC, New York, New York.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain of the material United States
federal income tax consequences of the purchase, ownership and disposition of
the Preferred Securities. Unless otherwise stated, this summary deals only with
Preferred Securities held as capital assets by holders who purchase the
Preferred Securities upon original issuance. It does not deal with special
classes of holders such as banks, thrifts, real estate investment trusts,
regulated investment companies, insurance companies, dealers in securities or
currencies, tax-exempt investors, foreign corporations and persons who are not
citizens or residents of the United States (except to the extent discussed under
the heading "--Certain United States Tax Consequences to Non-United States
Holders") or persons that will hold the Preferred Securities as a position in a
"straddle," as part of a "synthetic security" or "hedge," as part of a
"conversion transaction" or other integrated investment, or as other than a
capital asset. This summary also does not address the tax consequences to
persons that have a functional currency other than the U.S. Dollar. Further, it
does not include any description of any alternative minimum tax consequences or
the tax laws of any state or local government or of any foreign government that
may be applicable to the Preferred Securities. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
thereunder and administrative and judicial interpretations thereof, as of the
date hereof, all of which are subject to change, possibly on a retroactive
basis.
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INVESTORS ARE ADVISED TO CONSULT THEIR TAX ADVISORS AS TO THE UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF
PREFERRED SECURITIES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX LAWS AND OF POTENTIAL CHANGES
IN APPLICABLE TAX LAWS.
CLASSIFICATION OF THE DEBENTURES
Hvide has taken the position that the Debentures will be classified for
United States federal income tax purposes as indebtedness of Hvide under current
law and, by acceptance of Preferred Securities, each holder covenants to treat
the Debentures as indebtedness and the Preferred Securities as evidence of an
indirect beneficial ownership interest in the Debentures. No assurance can be
given, however, that such position of Hvide will not be challenged by the
Internal Revenue Service ("IRS") or, if challenged, that such a challenge will
not be successful. The remainder of this discussion assumes that the Debentures
will be classified as indebtedness of Hvide for United States federal income tax
purposes.
CLASSIFICATION OF THE ISSUER
In connection with the issuance of the Preferred Securities, Dyer Ellis
& Joseph PC, United States tax counsel to the Issuer and Hvide, rendered its
opinion generally to the effect that, under then current law and assuming full
compliance with the terms of the Declaration and the Indenture (and certain
other documents), based on certain facts and assumptions contained in such
opinion, the Trust will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Preferred Securities generally will be considered the owner of an undivided
interest in the Debentures, and each holder will be required to include in its
gross income any original issue discount accrued with respect to its allocable
share of those Debentures.
ORIGINAL ISSUE DISCOUNT
Because Hvide has the option, under the terms of the Debentures, to
defer payments of interest by extending interest payment periods for up to 60
months, all of the stated interest payments on the Debentures will be treated as
"original issue discount." Under the Code, holders of debt instruments (such as
the Debentures) issued with original issue discount must include that discount
in income on an economic accrual basis before the receipt of cash attributable
to the interest, regardless of their method of tax accounting. Generally, all of
a holder's taxable interest income with respect to the Debentures will be
accounted for as original issue discount. Actual payments and distributions of
stated interest will not, however, be separately reported as taxable income. The
amount of original issue discount that accrues in any quarter will approximately
equal the amount of the interest that accrues on the Debentures in that quarter
at the stated interest rate. In the event that the interest payment period is
extended, holders will continue to accrue original issue discount in an amount
approximately equal to the amount of the interest payment due at the end of the
extended interest payment period on an economic accrual basis over the length of
the extended interest payment period.
Because income on the Debentures will constitute original issue
discount, corporate holders will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the Debentures.
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REDEMPTION OF PREFERRED SECURITIES FOR DEBENTURES OR CASH UPON LIQUIDATION
OF THE ISSUER
Under certain circumstances, the Debentures may be discounted to
holders in exchange for the Preferred Securities. Under current law, such a
distribution to holders, for United States federal income tax purposes, would be
treated as a nontaxable event to each holder, and each holder would receive an
aggregate tax basis in the Debentures distributed equal to such holder's
aggregate tax basis in its Preferred Securities exchanged therefor. A holder's
holding period in the Debentures so received would include the period during
which the Preferred Securities were held by such holder. If, however, the
exchange is caused by a Tax Event which results in the Issuer being treated as
an association taxable as a corporation the distribution would likely constitute
a taxable event to the Issuer and holders of the Preferred Securities.
Under certain circumstances described herein (see "Description of the
Preferred Securities--Special Event Exchange or Redemption"), the Debentures may
be redeemed for cash and the proceeds of such redemption distributed to holders
in redemption of their Preferred Securities. Under current law, such a
redemption would, for United States federal income tax purposes, constitute a
taxable disposition of the redeemed Preferred Securities, and a holder would
recognize gain or loss in the same manner as if it sold such redeemed Preferred
Securities for cash. See "--Sales of Preferred Securities."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will recognize gain or loss
equal to the difference between the amount realized on the sale of the Preferred
Securities and the holder's adjusted tax basis in such Preferred Securities. A
holder's adjusted tax basis in the Preferred Securities generally will be its
initial purchase price increased by original issue discount previously
includible in such holder's gross income to the date of disposition and
decreased by payments received on the Preferred Securities to the date of
disposition. In general, such gain or loss will be a capital gain or loss and
will be a long-term capital gain or loss if the Preferred Securities have been
held for more than one year at the time of sale.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Debentures. A holder who disposes of or converts his Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Debenture through the date of
disposition or conversion in income as ordinary income, and to add such amount
to his adjusted tax basis in his pro rata share of the underlying Debentures
deemed disposed of or converted. To the extent the selling price is less than
the holder's adjusted tax basis (which basis will include, in the form of
original issue discount, all accrued but unpaid interest), a holder will
recognize a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes.
MARKET DISCOUNT AND BOND PREMIUM
Holders that purchase the Preferred Securities at a price that is
greater or less than the adjusted issue price of such holder's proportionate
share of the Debentures (which generally should approximate the face amount plus
accrued but unpaid interest on the Debentures) may be considered to have
acquired their undivided interests in the Debentures with market discount or
acquisition premium as such phrases are defined for United States federal income
tax purposes. Such holders are advised to consult their tax
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advisors as to the income tax consequences of the acquisition, ownership and
disposition of the Preferred Securities.
CONVERSION OF PREFERRED SECURITIES INTO HVIDE CLASS A COMMON STOCK
Except possibly to the extent attributable to accrued and unpaid
interest on the Debentures, a holder of Preferred Securities will not recognize
income, gain or loss upon the conversion of the Preferred Securities into Hvide
Class A Common Stock through the Conversion Agent. A holder of Preferred
Securities will, however, recognize gain upon the receipt of cash in lieu of a
fractional share of Hvide Class A Common Stock equal to the amount of cash
received less such holder's tax basis in such fractional share. Such a holder's
tax basis in the Hvide Class A Common Stock received upon conversion should
generally be equal to such holder's tax basis in the Preferred Securities
delivered to the Conversion Agent for exchange less the basis allocated to any
fractional share for which cash is received and such holder's holding period in
the Hvide Class A Common Stock received upon conversion should generally begin
on the date such holder acquired the Preferred Securities delivered to the
Conversion Agent for exchange.
Holders of Preferred Securities should not recognize gain or loss upon
expiration of the conversion rights. Such expiration should not affect a
significant modification of the underlying Debentures within the meaning of
applicable Treasury Regulations, and thus will not be considered a sale or
exchange for purposes of federal income taxation.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Code would
treat holders of Preferred Securities as having received a constructive
distribution from Hvide in the event the conversion ratio of the Debentures were
adjusted if (i) as a result of such adjustment, the proportionate interest
(measured by the quantum of Hvide Class A Common Stock into or for which the
Debentures are convertible or exchangeable) of the holders of the Preferred
Securities in the assets or earnings and profits of Hvide were increased, and
(ii) the adjustment was not made pursuant to a bona fide, reasonable
antidilution formula. An adjustment in the conversion ratio would not be
considered made pursuant to such a formula if the adjustment was made to
compensate for certain taxable distributions with respect to the Hvide Class A
Common Stock. Thus, under certain circumstances, a reduction in the conversion
price for the holders may result in deemed dividend income to holders to the
extent of the current or accumulated earnings and profits of Hvide. Holders of
the Preferred Securities would be required to include their allocable share of
such deemed dividend income in gross income but would not receive any cash
related thereto.
INFORMATION REPORTING TO HOLDERS
The Issuer will report the original issue discount, if any, that
accrued during the year with respect to the Debentures, and any gross proceeds
received by the Issuer from the retirement or redemption of the Debentures,
annually to the holders of record of the Preferred Securities and the IRS. The
Issuer currently intends to deliver such reports to holders of record prior to
January 31, following each calendar year. It is anticipated that persons who
hold Preferred Securities as nominees for beneficial holders will report the
required tax information to beneficial holders on Form 1099.
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BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, Preferred Securities
may be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification requirements. Any withheld amounts will generally be
allowed as a credit against the holder's federal income tax provided the
required information is timely filed with the IRS.
POSSIBLE TAX LEGISLATION
As a part of President Clinton's Fiscal 1998 Budget Proposal, the
Treasury Department proposed legislation that, among other things, would have
treated as equity for United States federal income tax purposes certain debt
instruments that are not shown as indebtedness on the consolidated balance sheet
of the Issuer. Although this proposal was not included in the tax legislation
ultimately enacted, there can be no assurance that such a proposal will not be
enacted in the future, that such future legislation will not have a retroactive
effective date and that such future legislation will not prevent Hvide from
deducting interest on the Debentures. Such an event would constitute a Tax Event
and would permit the Issuer to exchange the Preferred Securities, in whole or in
part, for the Debentures or redeem, in whole or in part, the Preferred
Securities and Debentures.
CERTAIN UNITED STATES TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS
General. The following is a general discussion of certain United States
federal income and estate tax consequences of the acquisition, ownership and
disposition of Preferred Securities by a "Non-United States Holder" and does not
deal with tax consequences arising under the laws of any foreign, state, or
local jurisdiction. As used herein, a "Non-United States Holder" is a person or
entity that, for United States federal income tax purposes, is not a citizen or
resident of the United States, a corporation, partnership, or other entity
created or organized under the laws of the United States or a political
subdivision thereof, or an estate or trust, the income of which is subject to
United States federal income taxation regardless of its source, or that
otherwise is subject to United States federal income taxation on a net basis in
respect of the Preferred Securities. The tax treatment of the holders of the
Preferred Securities may vary depending upon their particular situations.
Certain holders (including insurance companies, tax exempt organizations,
financial institutions and broker-dealers) may be subject to special rules not
discussed below. Prospective investors who are Non-United States Holders are
urged to consult their tax advisors regarding the United States Federal tax
consequences of acquiring, holding and disposing of Preferred Securities and
Hvide Class A Common Stock, as well as any tax consequences that may arise under
the laws of any foreign, state, local or other taxing jurisdiction.
Interest. Interest (including original issue discount) received or
accrued by a Non-United States Holder of Preferred Securities will not be
subject to United States federal income or withholding tax if such interest is
not effectively connected with the conduct of a trade or business within the
United States by such Non-United States Holder and (i) the Non-United States
Holder does not actually or constructively own 10% or more of the total voting
power of all voting stock of Hvide and is not a controlled foreign corporation
with respect to which Hvide is a "related person" within the meaning of the Code
and (ii) the beneficial owner of the Preferred Securities certifies, under
penalty of perjury, that the beneficial owner is not a United States person and
provide the beneficial owner's name and address.
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Gain on Disposition of Preferred Securities. A Non-United States Holder
will generally not be subject to United States federal income tax on gain
recognized on a sale, redemption or other disposition of a Preferred Security
unless (i) the gain is effectively connected with the conduct of a trade or
business within the United States by the Non-United States Holder, or (ii) in
the case of a Non-United States Holder who is a nonresident alien individual and
holds the Preferred Security as a capital asset, such holder is present in the
United States for 183 or more days in the taxable year and certain other
requirements are met.
Dividends on Hvide Class A Common Stock. In the event that dividends
are paid on Hvide Class A Common Stock, except as described below, such
dividends paid to a Non-United States Holder of Hvide Class A Common Stock will
be subject to withholding of United States federal income tax at a 30% rate or
such lower rate as may be specified by an applicable income tax treaty, unless
the dividends are effectively connected with the conduct of a trade or business
of the Non-United States Holder within the United States. If the dividend is
effectively connected with the conduct of a trade or business of the Non-United
States Holder within the United States, the dividend would be subject to United
States federal income tax on a net income basis of applicable graduated
individual or corporate rates and would be exempt from the 30% withholding tax
described above. Any such effectively connected dividends received by a foreign
corporation may, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.
Under current United States Treasury regulations, dividends paid to an
address outside the United States are presumed to be paid to a resident of such
country for purposes of the withholding discussed above, and, under the current
interpretation of United States Treasury regulations, for purposes of
determining the applicability of a tax treaty rate. Under proposed United States
Treasury regulations, not currently in effect, however, a Non-United States
Holder of Hvide Class A Common Stock who wishes to claim the benefit of an
applicable treaty rate would be required to satisfy applicable certification and
other requirements. Certain certification and disclosure requirements must be
complied with in order to be exempt from withholding under the effectively
connected income exemption discussed above.
A Non-United States Holder of Hvide Class A Common Stock that is
eligible for a reduced rate of United States withholding tax pursuant to a tax
treaty may obtain a refund of any excess amounts currently withheld by filing an
appropriate claim for refund with the IRS.
Gain on Disposition of Hvide Class A Common Stock. A Non-United States
Holder generally will not be subject to United States income tax on any gain
recognized on a disposition of the Hvide Class A Common Stock unless (i) Hvide
is or has been a "United States real property holding corporation" (a "USRPHC")
within the meaning of Section 897(c)(2) of the Code at any time within the
shorter of the five-year period preceding such disposition or such Non-United
States Holder's holding period, (ii) the gain is effectively connected with the
conduct of a trade or business within the United States of the NonUnited States
Holder and, if a tax treaty applies, attributable to a permanent establishment
maintained by the Non-United States Holder, (iii) The Non-United States Holder
is an individual who holds the Hvide Class A Common Stock as a capital asset and
is present in the United States for 183 days or more in the taxable year of the
disposition and either (a) such individual has a "tax home" (as defined for
United States federal income tax purposes) in the United States or (b) the gain
is attributable to an office or other fixed place of business maintained in the
United States by such individual, or (iv) the Non-United States Holder is
subject to tax pursuant to the Code provisions applicable to certain United
States expatriates. If an individual Non-United States Holder falls under
clauses (ii) or (iv) above, he or she will be taxed
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on his or her net gain derived from the sale under regular United States federal
income tax rates. If the individual Non-United States Holder falls under clause
(iii) above, he or she will be subject to a flat 30% tax on the gain derived
from the sale which may be offset by United States capital losses
(notwithstanding the fact that he or she is not considered a resident of the
United States). If a Non-United States Holder that is a foreign corporation
falls under clause (ii) above, it will be taxed on its gain under regular
graduated United States federal income tax rates and, in addition, will under
certain circumstances be subject to the branch profits tax equal to 30% of its
"effectively connected earnings and profits" within the meaning of the Code for
the taxable year, as adjusted for certain items, unless it qualifies for a lower
rate under an applicable income tax treaty.
A corporation is generally a USRPHC if the fair amount value of its
United States real property interests equals or exceeds 50% of the sum of the
fair market value of its worldwide real property interests plus its other assets
used or held for use in a trade or business. Hvide believes that it currently is
not a USRPHC.
Federal Estate Taxes. A Preferred Security beneficially owned by an
individual who is a NonUnited States Holder at the time of his or her death
generally will not be subject to United States Federal estate tax as a result of
such individual's death, provided that (i) such individual does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of Hvide entitled to vote within the meaning of section 871(h)(3) of
the Code, and (ii) interest payments (including payments of original issue
discount) with respect to the Debentures would not have been, if received at the
time of such individual's death, effectively connected with the conduct of a
U.S. trade or business by such individual. Common Stock of Hvide owned, or
treated as owned, by an individual Non-United States Holder at the time of his
or her death will be included in such holder's gross estate for United States
federal estate tax purposes, unless an applicable estate tax treaty provides
otherwise.
Information Reporting and Backup Withholding. Hvide must report
annually to the IRS and to each Non-United States Holder the amount of interest
and dividends paid to such holder and the amount of any tax withheld. These
information reporting requirements apply regardless of whether withholding is
required. Copies of the information returns reporting such interest and
dividends and withholding may also be made available to the tax authorities in
the country in which the Non-United States Holder resides under the provisions
of an applicable income tax treaty.
In the case of payments of interest to Non-United States Holders,
temporary Treasury regulations provide that the 31% backup withholding tax and
certain information reporting will not apply to such payments with respect to
which either the requisite certification, as described above, has been received
or an exemption has otherwise been established; provided that neither Hvide nor
its payment agent has actual knowledge that the holder is a United States person
or that the conditions of any other exemption are not in fact satisfied. Under
temporary Treasury regulations, these information reporting and backup
withholding requirements will apply, however, to the gross proceeds paid to a
Non-United States Holder on the disposition of the Preferred Securities by or
through a United States office of a United States or foreign broker, unless the
holder certifies to the broker under penalty of perjury as to its name, address
and status as a foreign person or the holder otherwise establishes an exemption.
Information reporting requirements, but not backup withholding, will also apply
to a payment of the proceeds of a disposition of the Preferred Securities by or
through a foreign office of a United States broker or foreign brokers with
certain types of relationships to the United States. Neither information
reporting nor backup
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withholding generally will apply to a payment of the proceeds of a disposition
of the Preferred Securities by or through a foreign office or foreign broker not
subject to the preceding sentence.
United States backup withholding tax generally will not apply to (a)
the payment of dividends paid on Hvide Class A Common Stock to a Non-United
States Holder at an address outside the United States or (b) the payment of the
proceeds of the sale of Hvide Class A Common Stock to or through the foreign
office of a broker. In the case of the payment of proceeds from such a sale of
Hvide Class A Common Stock through a foreign office of a broker that is a United
States person or a "U.S. related person," however, information reporting (but
not backup withholding) is required with respect to the payment unless the
broker has documentary evidence in its files that the owner is a Non-United
States Holder and certain other requirements are met or the holder otherwise
establishes an exemption. For this purpose, a "U.S. related person" is (i) a
controlled foreign corporation for United States federal income tax purposes, or
(ii) a foreign person 50% or more of whose gross income from all sources for the
three-year period ending with the close of its taxable year preceding the
payment (or for such part of the period that the broker has been in existence)
is derived from activities that are effectively connected with the conduct of a
United States trade or business. The payment of the proceeds of a sale of Hvide
Class A Common Stock to or through a United States office of a broker is subject
to information reporting and possible backup withholding unless the owner
certifies its non-United States status under penalty of perjury or otherwise
establishes an exemption.
Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules may be refunded or credited against the Non-United
States Holder's United States federal income tax liability, provided that the
required information is furnished to the IRS.
These information and backup withholding rules are under review by the
United States Treasury and their application to the Preferred Securities and the
Hvide Class A Common Stock could be changed by future regulations. On April 15,
1996, the IRS issued proposed Treasury Regulations concerning the withholding of
tax and reporting for certain amounts paid to non-resident individuals and
foreign corporations. The proposed regulations would, among other changes,
eliminate the presumption under current regulations with respect to dividends
paid to addresses outside the United States. The proposed Treasury Regulations,
if adopted in their present form, would be effective for payments made after
December 31, 1997. Prospective purchasers of the Preferred Securities should
consult their tax advisors concerning the potential adoption of such Treasury
Regulations.
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SELLING HOLDERS
The Preferred Securities were originally issued and sold by the Issuer
to Donaldson, Lufkin & Jenrette Securities Corporation, Howard, Weil, Labouisse,
Friedrichs Incorporated, and Raymond James & Associates, Inc. (the "Initial
Purchasers") and were simultaneously resold by the Initial Purchasers in
transactions exempt from the registration requirements of the Securities Act.
The Selling Holders may from time to time offer and sell pursuant to this
Prospectus any or all of the Offered Securities. The term Selling Holder
includes the holders listed below and the beneficial owners of the Preferred
Securities and their transferees, pledgees, donees or other successors.
The following table sets forth information with respect to the Selling
Holders of the Preferred Securities and the respective number of Preferred
Securities beneficially owned by each Selling Holder that may be offered
pursuant to this Prospectus.
SHARES OF COMMON
STOCK ISSUABLE UPON
NUMBER OF CONVERSION OF
SELLING HOLDERS PREFERRED SECURITIES PREFERRED SECURITIES*
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PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to time to purchasers
directly by the Selling Holders. Alternatively, the Selling Holders may from
time to time offer the Offered Securities to or through underwriters,
broker/dealers or agents, who may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Holders or
the purchasers of such securities for whom they may act as agents. The Selling
Holders and any underwriters, broker/dealers or agents that participate in the
distribution of Offered Securities may be deemed to be "underwriters" within the
meaning of the Securities Act and any profit on the sale of such securities and
any discounts, commissions, concessions or other compensation received by any
such underwriter, broker/dealer or agent may be deemed to be underwriting
discounts and commissions under the Securities Act. The Offered Securities may
be sold from time to time in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. The sale of the Offered Securities may
be effected in transactions (which may involve crosses or block transactions)
(i) on any national securities exchange on which the Offered Securities may be
listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii)
in transactions otherwise than on such exchanges or in the over-the-counter
market, or (iv) through the writing of options. The Selling Holders may enter
into hedging transactions with broker-dealers, which may in turn engage in short
sales of the Offered Securities in the course of hedging the positions they
assume. The Selling Holders may also sell Offered Securities short and deliver
Offered Securities to close out such short positions, or lend or pledge Offered
Securities to broker-dealers that may in turn sell such securities. At the time
a particular offering of the Offered Securities is made, a Prospectus
Supplement, if required, will be distributed setting forth the aggregate amount
and type of Offered Securities being offered and the terms of the offering,
including the name or names of any underwriters, broker/dealers or agents, any
discounts, commissions and other terms constituting compensation from the
Selling Holders and any discounts, commissions or concessions allowed or
reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if
applicable, the Offered Securities will be offered or sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Offered Securities may not be offered or sold unless they have
been registered or qualified for sale in such jurisdictions or any exemption
from registration or qualification is available and is complied with.
The Selling Holders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Offered Securities by the
Selling Holders. The foregoing may affect the marketability of such securities.
The Company and the Trust will bear the expenses of registration of the
Offered Securities, and the Selling Holders will pay all underwriting discounts
and selling commissions, if any. The Selling Holders will be indemnified by the
Company and the Trust, jointly and severally against certain civil liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith. The Company and the Trust will be
indemnified by the Selling Holders severally against certain civil liabilities,
including certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
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EXPERTS
The consolidated financial statements of Hvide Marine Incorporated and
subsidiaries appearing in Hvide Marine Incorporated's Annual Report (Form 10-K)
for the year ended December 31, 1996, have been audited by Ernst & Young LLP,
independent certified public accountants, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the
Preferred Securities have been passed upon on behalf of the Issuer by Morris,
Nichols, Arsht & Tunnel, Wilmington, Delaware. The validity of the Debentures,
the Guarantee, and certain legal matters relating thereto have been passed upon
on behalf of Hvide by Dyer Ellis & Joseph PC, Washington, D.C.
AVAILABLE INFORMATION
Hvide is subject to the informational requirements of the Exchange Act
and, in accordance therewith files reports, proxy statements and other
information with the Commission. The reports, proxy statements and other
information filed by Hvide may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at 7
World Trade Center, New York, New York 10048, and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Hvide Class A Common Stock is traded
on the Nasdaq National Market and reports and other information herein and
therein concerning Hvide can also be inspected at the Nasdaq National Market
Exchange, 1735 K Street, N.W., Washington, D.C. 20546. Such material may also be
accessed electronically by means of the Commission's home page on the Internet
at http://www.sec.gov.
No separate financial statements of the Issuer have been included
herein. The Issuer and Hvide do not consider that such financial statements
would be material to potential investors because the Issuer is a special purpose
entity, has no operating history or independent operations, and is not engaged
in and does not propose to engage in any activity other than holding as trust
assets the Debentures of Hvide and issuing the Preferred Securities and Common
Securities and Hvide has fully and unconditionally guaranteed all of the
Issuer's obligations under the Preferred Securities. See "Hvide Capital Trust,"
"Description of the Preferred Securities," "Description of the Guarantee," and
"Description of the Debentures."
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable in connection with
the registration of the Common Stock that is the subject of this Registration
Statement, all of which shall be borne by the Company. All the amounts shown are
estimates except for the registration fee, and the NASD listing and filing fees.
TO BE PAID BY
REGISTRANT
Securities and Exchange Commission registration fee........ $ 34,849.00
Printing and engraving expenses............................ *
Legal fees and expenses.................................... *
Accounting fees and expenses............................... *
Blue sky fees and expenses................................. *
Transfer Agent and Registrar fees.......................... *
Miscellaneous expenses..................................... *
--------------
Total.................................................... $ *
===============
(*) To be supplied.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation provide that the Company shall
indemnify each director and officer of the Company to the fullest extent
permitted from time to time by the laws of the State of Florida or any other
applicable laws as presently or hereafter in effect. Section 607.0850 of the
Florida Business Corporation Act currently provides as follows:
(1) A corporation shall have power to indemnify any person who was or
is a party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against liability
incurred in connection with such proceeding, including any appeal thereof, 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 corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any proceeding by judgment, order, settlement,
or conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the 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 corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(2) A corporation shall have power to indemnify any person, who was or
is a party to any proceeding by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership,
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joint venture, trust, or other enterprise, against expenses and amounts paid in
settlement not exceeding, in the judgment of the board of directors, the
estimated expense of litigating the proceeding to conclusion, actually and
reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation,
except that no indemnification shall be made under this subsection in respect of
any claim, issue, or matter as to which such person shall have been adjudged to
be liable unless, and only to the extent that, the court in which such
proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee, or agent of a
corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsection (1) or subsection (2), or in defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith.
(4) Any indemnification under subsection (1) or subsection (2), unless
pursuant to a determination by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsection (1) or
subsection (2). Such determination shall be made:
(a) By the board of directors by a majority vote of a
quorum consisting of directors who were not parties
to such proceeding;
(b) If such a quorum is not obtainable or, even if
obtainable, by majority vote of a committee duly
designated by the board of directors (in which
directors who are parties may participate) consisting
solely of two or more directors not at the time
parties to the proceeding;
(c) By independent legal counsel:
1. Selected by the board of directors prescribed in
paragraph (a) or the committee prescribed in
paragraph (b); or
2. If a quorum of the directors cannot be obtained
for paragraph (a) and the committee cannot be
designated under paragraph (b), selected by majority
vote of the full board of directors (in which
directors who are parties may participate); or
(d) By the stockholders by a majority vote of a quorum
consisting of stockholders who were not parties to
such proceeding or, if no such quorum is obtainable,
by a majority vote of stockholders who were not
parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the
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determination of permissibility is made by independent legal counsel, persons
specified by paragraph (4)(c) shall evaluate the reasonableness of expenses and
may authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the corporation pursuant to this section.
Expenses incurred by other employees and agents may be paid in advance upon such
terms or conditions that the board of directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant
to this section are not exclusive, and a corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director,
officer, employee, or agent had reasonable cause to
believe his conduct was lawful or had no reasonable
cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer,
employee, or agent derived an improper personal
benefit;
(c) In the case of a director, a circumstance under which
the liability provisions of s. 607.0834 are
applicable; or
(d) Willful misconduct or a conscious disregard for the
best interests of the corporation in a proceeding by
or in the right of the corporation to procure a
judgment in its favor or in a proceeding by or in the
right of a stockholder.
(8) Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person, unless otherwise provided when authorized or ratified.
(9) Unless the corporation's articles of incorporation provide
otherwise, notwithstanding the failure of a corporation to provide
indemnification, and despite any contrary determination of the board or of the
stockholders in the specific case, a director, officer, employee, or agent of
the corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court conducting the
proceeding, to the circuit court, or to another court of competent jurisdiction.
On receipt of an application, the court, after giving any notice that it
considers necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification or
advancement of expenses, if it determines that:
II-3
<PAGE>
(a) The director, officer, employee, or agent is entitled
to mandatory indemnification under subsection (3), in
which case the court shall also order the corporation
to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or
advancement of expenses;
(b) The director, officer, employee, or agent is entitled
to indemnification or advancement of expenses, or
both, by virtue of the exercise by the corporation of
its power pursuant to subsection (7); or
(c) The director, officer, employee, or agent is fairly
and reasonably entitled to indemnification or
advancement of expenses, or both, in view of all the
relevant circumstances, regardless of whether such
person met the standard of conduct set forth in
subsection (1), subsection (2), or subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, is in the same position
under this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(11) For purposes of this section:
(a) The term "other enterprises" includes employee benefit
plans;
(b) The term "expenses" includes counsel fees, including those
for appeal;
(c) The term "liability" includes obligations to pay a
judgment, settlement, penalty, fine (including an
excise tax assessed with respect to any employee
benefit plan), and expenses actually and reasonably
incurred with respect to a proceeding;
(d) The term "proceeding" includes any threatened,
pending, or completed action, suit, or other type of
proceeding, whether civil, criminal, administrative,
or investigative, and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation"
includes any service as a director, officer,
employee, or agent of the corporation that imposes
duties on such persons, including duties relating to
an employee benefit plan and its participants or
beneficiaries; and
(g) The term "not opposed to the best interest of the
corporation" describes the actions of a person who
acts in good faith and in a manner he reasonably
believes to be in the best interests of the
participants and beneficiaries of an employee benefit
plan.
II-4
<PAGE>
(12) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was director, officer, employee, or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise 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 corporation would have the power to indemnify him against
such liability under the provisions of this section.
The Registrant has purchased an insurance policy that provides for
indemnification of the Registrant's executive officers and directors for
liability resulting from their negligence, error, omission or breach of duty
while acting in their capacities as executive officers and directors on any
matter claimed against them by reason of their being executive officers and
directors.
ITEM 16. EXHIBITS
(a) The following is a list of exhibits furnished:
2.1 Stock Purchase Agreement dated as of October 12, 1995 by and
between Hvide Marine Incorporated and OMI Corp.(1)
2.1(a) Amendment to Stock Purchase Agreement dated as of January 31,
1996 by and among Hvide Marine Incorporated and OMI Corp.(1)
2.2 Asset Purchase Agreement dated as of March 29, 1996, by and
among Hvide Marine Incorporated, Seal Fleet, Inc., Sealcraft
Operators, Inc, Seal GP, Inc., South Corporation, and Thomas M.
Ferguson.(1)
2.2(a) Amendment No. 1 dated July 23, 1996, to Asset Purchase Agreement
dated as of March 29, 1996, by and among Hvide Marine
Incorporated, Seal Fleet, Inc., Sealcraft Operators, Inc., Seal
GP, Inc., South Corporation, and Thomas M. Ferguson.(2)
2.3 Asset Purchase Agreement dated as of March 29, 1996, by and
among Hvide Marine Incorporated, Ross Seal Partners, Ltd.,
Bengal Seal Partners, Ltd., Indian Seal Partners, Ltd., Baffin
Seal Partners, Ltd., Baltic Seal Partners, Ltd., and Irwin M.
Herz, Jr., as trustee under certain trusts.(1)
2.3(a) Amendment Number 1 dated July 23, 1996, to Asset Purchase
Agreement dated a of March 29, 1996, by and among Hvide Marine
Incorporated, Ross Seal Partners, Ltd., Bengal Seal Partners,
Ltd., Indian Seal Partners, Ltd., Baffin Seal Partners, Ltd.,
Baltic Seal Partners, Ltd., and Irwin M. Herz, Jr., as trustee
under certain trusts.(2)
2.4 Articles of Merger of Hvide Marine Incorporated, a Florida
corporation into Hvide Corp., a Florida corporation.(2)
4.1 Certificate of Trust of Hvide Capital Trust.
4.1(a) Appointment of Additional Administrative Trustees of Hvide
Capital Trust.
4.2 Amended and Restated Declaration of Trust, dated as of June 27,
1997, Among Hvide Marine Incorporated as Depositor, The Bank of
New York as Property Trustee, The Bank
II-5
<PAGE>
of New York (Delaware) as Delaware Trustee, and J. Erik Hvide,
John H. Blankley, and Gene Douglas as Administrative Trustees.
4.3 Indenture for the 6 1/2% Convertible Subordinated Debentures,
dated as of June 27, 1997, among Hvide Marine Incorporated and
The Bank of New York as Indenture Trustee.
4.4 Form of 6 1/2% Preferred Securities.
4.5 Form of 6 1/2% Convertible Debentures.
4.6 Preferred Securities Guarantee Agreement, dated as of June 27,
1997, between Hvide Marine Incorporated, as Guarantor, and The
Bank of New York, as Guarantee Trustee.
5.1* Opinion of Dyer Ellis & Joseph, Counsel to Hvide Marine
Incorporated and special counsel to Hvide Capital Trust, as to
the legality of the Debentures, Guarantee and the Common Stock
of Hvide marine Incorporated issuable upon conversion of the
Preferred Securities being registered hereby.
5.2* Opinion of Morris, Nichols, Arsht & Tunnell, special Delaware
counsel to Hvide Capital Trust, as to the legality of the
Preferred Securities being registered hereby.
8.1* Opinion of Dyer Ellis & Joseph, special United States tax
counsel to Hvide Marine Incorporated and Hvide Capital Trust,
as to certain tax matters.
10.1 Registration Rights Agreement, dated June 27, 1997, between
Hvide Capital Trust and Donaldson, Lufkin & Jenrette Securities
Corporation, Howard, Weil, Labouisse, Friedrichs Incorporated
and Raymond James & Associates, Inc., as Purchasers.
12 Computation of Ratios.
23.1 Consent of Ernst & Young LLP.
23.2* Consent of Counsel (included as part of Exhibit 5).
23.3 Consent of Deloitte & Touche
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of The Bank of New York, as Trustee under
the 6 1/2% Convertible Subordinated Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of The Bank of New York, as Property
Trustee under the Amended and Restated Declaration of Trust.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of The Bank of New York, as Guarantee
Trustee under the Guarantee Agreement.
- ---------------
* To be filed by Amendment.
(1) Incorporated herein by reference to Amendment No. 1 to Registration
Statement on Form S-1 (Registration No. 33-78166) filed with the Commission
on May 3, 1996.
(2) Incorporated herein by reference to Amendment No. 4 to Registration
Statement on Form S-1 (Registration No. 33-78166) filed with the Commission on
August 5, 1996.
II-6
<PAGE>
Schedules not listed above have been omitted because they are not
applicable or because required information is included in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS
(1) The undersigned registrant hereby undertakes:
(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 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;
(b) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities which remain unsold at the termination
of the Offering.
(2) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant'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 the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(4) The undersigned registrant hereby undertakes that:
(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 a
registration statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the
II-7
<PAGE>
Securities Act shall be deemed to be part of the
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.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Fort Lauderdale, Florida on the 4th day of September, 1997.
HVIDE MARINE INCORPORATED
By: /s/ J. ERIK HVIDE
J. Erik Hvide
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ J. ERIK HVIDE
J. Erik Hvide Chairman of the Board, President, September 4, 1997
Chief Executive Officer and
Director (principal executive
officer)
/s/ JOHN H. BLANKLEY
John H. Blankley Executive Vice President-- September 4, 1997
Chief Financial Officer
and Director (principal financial
officer)
/s/ JOHN J. KRUMENACKER
John J. Krumenacker Controller (principal accounting September 4, 1997
officer)
/s/ EUGENE F. SWEENEY
Eugene F. Sweeney Executive Vice President--Operations September 4, 1997
and Director
/s/ ROBERT B. CALHOUN, JR.
Robert B. Calhoun, Jr. Director September 4, 1997
/s/ GERALD FARMER
Gerald Farmer Director September 4, 1997
/s/ JEAN FITZGERALD
Jean Fitzgerald Director September 4, 1997
/s/ JOHN J. LEE
John J. Lee Director September 4, 1997
/s/ WALTER C. MINK
Walter C. Mink Director September 4, 1997
/s/ ROBERT RICE
Robert Rice Director September 4, 1997
/s/ RAYMOND B. VICKERS September 4, 1997
Raymond B. Vickers Director
</TABLE>
II-10
Exhibit 4.1
CERTIFICATE OF TRUST
OF
HVIDE CAPITAL TRUST
This Certificate of Trust is being executed as of June 20, 1997 for the
purpose of organizing a business trust pursuant to the Delaware Business Trust
Act, 12 DEL. C. Section 3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. NAME. The name of the business is Hvide Capital Trust (the
"Trust");
2. DELAWARE TRUSTEE. The name and business address of the
Delaware resident trustee of the Trust meeting the
requirements of Section 3807 of the Act are as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
3. EFFECTIVE. This Certificate of Trust, which may be executed
in counterparts, shall be effective immediately upon filing
in the Office of the Secretary of State of the State
of Delaware.
-1-
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written.
The Bank of New York (Delaware)
as Delaware Trustee
By: /s/ MARY JANE MORRISSEY
Name: Mary Jane Morrissey
Title:Authorized Signatory
/s/ GENE DOUGLAS
Gene Douglas, as Administrative Trustee
-2-
Exhibit 4.1(a)
APPOINTMENT OF ADDITIONAL
ADMINISTRATIVE TRUSTEES
OF
HVIDE CAPITAL TRUST
Pursuant to section 6 of the Declaration of Trust, dated as of June 20,
1997, among Hvide Marine Incorporated, a Florida corporation, as "Depositor,"
Gene Douglas, as "Administrative Trustee," and The Bank of New York (Delaware),
as "Delaware Trustee," the Depositor hereby increases the number of trustees of
Hvide Capital Trust from three (3) to five (5) trustees and appoints J. Erik
Hvide and John H. Blankley each to serve as Administrative Trustee of the Trust.
Hvide Marine Incorporated
as Depositor
By: /s/ GENE DOUGLAS
Gene Douglas
Vice President - Legal and
General Counsel
Dated: June 23, 1997
Exhibit 4.2
AMENDED AND RESTATED DECLARATION OF TRUST, dated as of June 27, 1997
among (i) Hvide Marine Incorporated, a Florida corporation (including any
successors or assigns, "the Depositor"), (ii) The Bank of New York, a New York
banking corporation, as property trustee (in such capacity, the "Property
Trustee" and, in its personal capacity and not in its capacity as Property
Trustee, the "Bank"), (iii) The Bank of New York (Delaware), a Delaware banking
corporation, as Delaware trustee (in such capacity, the "Delaware Trustee"),
(iv) J. Erik Hvide, an individual, John H. Blankley, an individual, and Gene
Douglas, an individual, each of whose address is c/o Hvide Marine Incorporated,
2200 Eller Drive, Fort Lauderdale, Florida 33316, (each, an "Administrative
Trustee" and, collectively, the "Administrative Trustees" and, collectively with
the Property Trustee and Delaware Trustee, the "Trustees") and (v) the several
Holders as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor and certain of the Trustees have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into that certain Declaration of Trust, dated as of
June 20, 1997 (the "Original Declaration"), and by the execution and filing by
certain of the Trustees with the Secretary of State of the State of Delaware of
the Certificate of Trust, filed on June 20, 1997 (the "Certificate of Trust"),
attached as Exhibit A, for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in the Debentures (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Declaration in its entirety as set forth herein to provide for, among
other things, (i) the issuance and sale of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Purchase Agreement and (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other party and
for the benefit of the Holders of the Preferred Securities, hereby amends and
restates the Original Declaration in its entirety and agrees as follows:
ARTICLE 1
DEFINED TERMS
SECTION 1.1. Definitions. For all purposes of this Declaration, 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;
<PAGE>
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Declaration;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Declaration as a whole and not to any particular
Article, Section or other subdivision;
(e) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles," with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
(h) each reference herein to a rule or form of the Commission shall
mean such rule or form and any rule or form successor thereto, in each case as
amended from time to time.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to the Trust Securities, the
amount of Additional Interest (as defined in the Indenture) paid by the
Depositor on the Debentures.
"Additional Sums" means, with respect to the Trust Securities, the
additional amounts as may be necessary in order that the amount of Distributions
then due and payable by the Trust on the Outstanding Preferred Securities and
Common Securities shall not be reduced as a result of any additional taxes,
duties and governmental charges to which the Trust has become subject as a
result of a Tax Event.
"Administrative Trustee" means each of J. Erik Hvide, John H. Blankley
and Gene Douglas, each solely in his capacity as Administrative Trustee of the
Trust formed and continued hereunder and not in his individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor in interest in such capacity, or any successor administrative trustee
appointed as herein provided.
"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, provided, however, that an Affiliate of the
Depositor shall not be deemed to include the Trust. 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.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Certificate or beneficial interest therein, the
rules and procedures of Euroclear and Cedel, and of the Clearing Agent for such
security, in each case to the extent applicable to such
<PAGE>
transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to this Declaration.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of such Person in an
involuntary case or proceeding under United States bankruptcy laws, as
now or hereafter constituted, or any other applicable federal, state or
foreign bankruptcy, insolvency, or other similar law or (ii) a decree
or order adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjudication or composition of, or in respect of, such Person under any
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal, state or foreign bankruptcy, insolvency, or
similar law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of such Person or of
any substantial part of such Person's property or assets, or ordering
the winding-up or liquidation of the affairs of such Person, 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
(b) (i) the commencement by such Person of a voluntary case or
proceeding under United States bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent; or (ii) the
consent by such Person to the entry of a decree or order for relief in
respect of such Person in an involuntary case or proceeding under
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal, state or foreign bankruptcy, insolvency or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against such Person; or (iii) the filing
by such Person of a petition or answer or consent seeking
reorganization or relief under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal, state or
foreign bankruptcy, insolvency or other similar law; or (iv) the
consent by such Person to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of such
Person or any substantial part of such Person's property or assets, or
the making by such Person of an assignment for the benefit of
creditors; or (v) the admission by such Person in writing of its
inability to pay its debts generally as they become due; or (vi) the
taking of corporate action by such Person in furtherance of any such
actions.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board of Directors" means either the board of directors of the
Depositor or any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of the resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date
<PAGE>
of such certification, and delivered to the Property Trustee.
"Book-Entry Preferred Securities Certificates" means a beneficial
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.11.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed or a day on which the Corporate Trust
Office of the Property Trustee or the corporate trust office of the Debenture
Trustee, is closed for business.
"Capital Stock" means, with respect to any Person, any and all shares,
interest, participations, rights in or other equivalents (however designated) of
such Person's capital stock, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"Certificate Depositary Agreement" means the agreement among the Trust,
the Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Securities Certificates
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Certificate of Trust" has the meaning specified in the preamble to
this Declaration.
"Certificated Preferred Security" has the meaning specified in Section
5.2.
"Change in 1940 Act Law" has the meaning specified in the definition of
Investment Company Event.
"Class A Common Stock" means the Class A Common Stock, par value $0.001
per share, of the Company.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the first Time of Delivery (as defined in the
Purchase Agreement), which date is also the date of execution and delivery of
this Declaration.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
<PAGE>
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount with respect to the assets of the
Trust of $50 and having the rights provided therefor in this Declaration,
including the right to receive Distributions and a Liquidation Distribution as
provided herein.
"Common Stock" includes any stock of any class of any Person which has
no preference in respect of dividend or amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of such Person
and which is not subject to redemption by such Person.
"Conversion Agent" has the meaning specified in Section 4.3.
"Conversion Date" has the meaning specified in Section 4.3.
"Conversion Expiration Date" means the close of business on the
Business Day prior to the maturity date of the Debentures, or in the case of
Preferred Securities called for redemption, the close of business on the
Business Day prior to the Debenture Redemption Date.
"Conversion Price" has the meaning specified in Section 4.3.
"Corporate Trust Office" means the principal corporate trust office of
the Property Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date hereof is located at
101 Barclay Street, New York, Floor 21 West, New York 10286, Attention:
Corporate Trust Administration.
"Current Market Price", with respect to the Common Stock of the
Depositor, means for any day the last reported sale price, regular way, on such
day, or, if no sale takes place on such day, the average of the reported closing
bid and asked prices on such day, regular way, in either case as reported on The
Nasdaq National Market, or, if such Common Stock is not admitted to trading on
The Nasdaq National Market on such day, on the principal national securities
exchange or quotation system on which such Common Stock is listed or admitted to
trading, or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average closing bid and asked
prices of such Common Stock in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or, if not so available in such manner, as
furnished by any NASD member firm selected from time to time by the Board of
Directors for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Directors.
"Debenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption thereof under the
Indenture.
"Debenture Trustee" means The Bank of New York, a New York banking
corporation,
<PAGE>
as trustee under the Indenture, until a successor Debenture Trustee shall have
become such pursuant to the applicable provision of the Indenture, and
thereafter "Debenture Trustee" shall mean such successor trustee and shall
include each Person who is then a Debenture Trustee hereunder if at any time
there is more than one such Person.
"Debentures" means up to $118,556,700 aggregate principal amount of the
Depositor's 6 1/2% Convertible Subordinated Debentures due June 15, 2012 issued
or to be issued pursuant to the Indenture.
"Declaration" means this Amended and Restated Declaration of Trust, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Declaration, any such modification, amendment or supplement,
the provisions of the Trust Indenture Act that are deemed to be a part of and
govern this Declaration and any such modification, amendment or supplement,
respectively.
"Definitive Preferred Securities Certificates" means either or both (as
the context requires) of (a) Preferred Securities Certificates issued in
certificated, fully registered form as provided in Section 5.11(b) and (b)
Preferred Securities Certificates issued in certificated, fully registered form
as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. (ss.) 3801, et. seq., as it may be amended from time
to time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Declaration solely in its capacity as Delaware
Trustee of the Trust formed and continued hereunder and not in its individual
capacity, or its successor in interest in such capacity, or any successor
Delaware trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this
Declaration.
"Direct Action" has the meaning specified in Section 6.8.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1. Distributions include, but are not
limited to, Additional Sums, Additional Amounts and Liquidated Damages.
"Early Dissolution Event" has the meaning specified in Section 9.2.
"Event of Default" means the occurrence of a Debenture Event of
Default, whatever the reason for such Debenture Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body.
"Exchange Notice" has the meaning specified in Section 4.4(b).
<PAGE>
"Expiration Date" has the meaning specified in Section 9.1.
"Global Certificate" means a Preferred Security that is registered in
the Securities Register in the name of a Clearing Agency or a nominee thereof.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and The Bank of New York, a New York banking corporation, as guarantee
trustee, contemporaneously with the execution and delivery of this Declaration,
for the benefit of the Holders of the Preferred Securities, as amended from time
to time.
"Holder" or "Securityholder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register, such Person
being a beneficial owner within the meaning of the Delaware Business Trust Act.
"Indenture" means the Convertible Subordinated Indenture, dated as of
June 27, 1997 between the Depositor and the Debenture Trustee, as amended or
supplemented from time to time.
"Investment Company Event" means the receipt by the Property Trustee,
on behalf of the Trust, of an Opinion of Counsel, rendered by a law firm having
a national tax and securities practice (which Opinion of Counsel shall not have
been rescinded by such law firm), to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law") that there is more
than an insubstantial risk that the Trust is or will be considered an
"investment company" that is required to be registered under the 1940 Act, which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under this Declaration.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Liquidated Damages" has the meaning specified under the Indenture.
"Liquidation Amount" means an amount with respect to the assets of the
Trust equal to $50 per Trust Security.
"Liquidation Date" means each date on which Debentures or cash are to
be distributed to Holders of Trust Securities in connection with a termination
and liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated thereunder.
"Notice of Conversion" means the notice given by a holder of Preferred
Securities to the Conversion Agent directing the Conversion Agent to exchange
such Preferred Security for
<PAGE>
Debentures and to convert such Debentures into Class A Common Stock on behalf of
such holder. Such notice is substantially in the form set forth in Exhibit H.
"Officers' Certificate" means a certificate signed by (i) the Chairman
of the Board, the Chief Executive Officer, the President, the Chief Operating
Officer or a Vice President, and by (ii) the Chief Financial Officer, the
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 8.15 shall be the
principal executive, financial or accounting officer of the Depositor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, and who may be an
employee of any thereof, and who shall be acceptable to the Property Trustee.
Any Opinion of Counsel delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
(a) a statement that each individual signing the Opinion of
Counsel has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each individual in rendering
the Opinion of Counsel;
(c) a statement that each 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.
"Optional Redemption Price" means, except as set forth below, with
respect to the Preferred Securities, the following percentages of the
Liquidation Amounts thereof, and accumulated and unpaid Distributions, if any,
to the date fixed for redemption if redeemed during the twelve-month period
commencing July 2 in each of the following years indicated:
<PAGE>
Year Redemption Price Year Redemption Price
2000 104.55% 2004 101.95%
2001 103.90% 2005 101.30%
2002 103.25% 2006 100.65%
2003 102.60% 2007 and thereafter 100.00%
In the event of a redemption of Trust Securities upon the occurrence of
a Tax Event, Trust Securities shall be redeemed at the redemption price of $50
per Trust Security and all accumulated and unpaid Distributions, if any to the
date fixed for redemption.
In the event of a redemption of Trust Securities pursuant to Section
4.2(a), Trust Securities shall be redeemed as the redemption price specified
therein.
"Original Declaration" has the meaning specified in the recitals to
this Declaration.
"Outstanding" when used with respect to Trust Securities, means, as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Declaration, except:
(a) Trust Securities theretofore canceled by the
Securities Registrar or delivered to the Securities Registrar for
cancellation or tendered for conversion;
(b) Trust Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the Holders of such Trust Securities;
provided that, if such Trust Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Declaration; and
(c) Trust Securities which have been paid or in exchange for
or in lieu of which other Trust Securities have been executed and
delivered pursuant to Section 5.5 unless proof satisfactory to the
Property Trustee is presented that any Preferred Securities are held by
Holders in whose hands such Preferred Securities are valid, binding and
legal obligations of the Trust.
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Trust Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, any
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee knows to be so owned shall
be so disregarded and (b) the foregoing shall not apply at any time when all of
the Outstanding Preferred Securities are owned by the Depositor, one or more of
the Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Securities Registrar the pledgee's right
so to act with respect to such Preferred Securities and that the pledgee is not
the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred
<PAGE>
Securities Certificate as reflected in the records of the Clearing Agent or, if
a Clearing Agency Participant is not the Owner, then as reflected in the records
of a Person maintaining an account with such Clearing Agent (directly or
indirectly, in accordance with the rules of such Clearing Agent).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof or other entity.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
D.
"Preferred Security" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount with respect to the assets of
the Trust of $50 and having the rights provided therefor in this Declaration,
including the right to receive Distributions and a Liquidation Distribution as
provided herein.
"Property Account" means a segregated non-interest bearing corporate
trust account maintained by the Property Trustee with the Bank (or any successor
appointed by the Property Trustee) in its trust department for the benefit of
the Holders of the Trust Securities in which all amounts paid in respect of the
Debentures will be held and from which the Property Trustee shall make payments
to the Securityholders in accordance with Section 4.1.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Declaration solely
in its capacity as Property Trustee of the Trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement, dated as of June 23,
1997 among the Trust, the Depositor and the Purchasers named therein.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, each Debenture Redemption Date.
"Redemption Price" means, with respect to any Trust Security, $50 per
Trust Security, plus accumulated and unpaid Distributions (including any
Additional Sums, Additional Amounts and Liquidated Damages) to the date of
redemption.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated June 27, 1997, among the Depositor, the Trust, and the
Purchasers named in the Purchase Agreement.
"Regulation S Certificate" means a certificate substantially in the
form set forth in Exhibit E.
<PAGE>
"Regulation S Global Certificate" has the meaning specified in Section
5.2.
"Regulation S Legend" has the meaning specified in Section 5.15(b).
"Regulation S Preferred Security" means all Preferred Securities
required pursuant to Section 5.4(c) to bear a Regulation S Legend. Such term
includes the Regulation S Global Certificate.
"Relevant Record Date" has the meaning specified in Section 4.1(d).
"Relevant Trustee" has the meaning specified in Section 8.9.
"Restricted Global Certificate" has the meaning specified in Section
5.2.
"Restricted Period" means, with respect to the Preferred Securities and
with respect to the Debentures or the Common Stock issuable on conversion of the
Preferred Securities, the one-year period, in either case following the last
original issue date of the Preferred Securities (including any Preferred
Securities issued to cover over-allotments).
"Restricted Securities" means all Preferred Securities required
pursuant to Section 5.4 to bear any Restricted Securities Legend. Such term
includes the Restricted Global Certificate.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit F.
"Restricted Securities Legend" has the meaning specified in Section
5.15(a).
"Rule 144A Preferred Securities" has the meaning specified in Section
5.2.
"Securities Act Legend" means a Restricted Securities Legend or a
Regulation S Legend.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Special Event" means a Tax Event or an Investment Company Event.
"Successor Property Trustee" has the meaning specified in Section 8.9.
"Successor Delaware Trustee" has the meaning specified in Section 8.9.
"Successor Securities" has the meaning specified in Section 9.5.
"Tax Event" means the receipt by the Property Trustee, on behalf of the
Trust, of an Opinion of Counsel, rendered by a law firm having a national tax
and securities practice (which Opinion of Counsel shall not have been rescinded
by such law firm), to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, or as a result of any
official administrative pronouncement
<PAGE>
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is announced
on or after June 23, 1997, there is more than an insubstantial risk in each case
after such date that (i) the Trust is, or will be within 90 days after such
date, subject to United State Federal income tax with respect to income received
or accrued on the Debentures, (ii) interest payable by the Depositor on the
Debentures is not, or will not be, within 90 days after such date, deductible,
in whole or in part, for United States Federal income tax purposes or (iii) the
Trust is, or will be within 90 days after such date, subject to more than de
minimus amount of other taxes, duties, assessments or other governmental
charges.
"Trust" means the Delaware business trust continued hereby and
identified on the cover page of this Declaration.
"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 Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Property Account and (c) all proceeds and rights in respect of
the foregoing to be held by the Property Trustee pursuant to the terms of this
Declaration for the benefit of the Securityholders.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates, the Global Certificates or the Certificated Preferred Securities.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Unrestricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit G.
ARTICLE 2
ESTABLISHMENT OF THE TRUST
SECTION 2.1. Name. The Trust continued hereby shall be known as "Hvide
Capital Trust", as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is 200 White Clay
Center, Newark, Delaware 19711, Attention: Corporate Trust Administration, or
such other address in the State of Delaware as the Delaware Trustee may
designate by written notice to the Securityholders and the Depositor. The
principal executive office of the Trust is 2200 Eller Drive, Fort Lauderdale,
Florida 33316.
<PAGE>
SECTION 2.3. Organizational Expenses. The Depositor shall pay
organizational expenses of the Trust as they arise or shall, upon request of any
Trustee, promptly reimburse such Trustee for any such expenses paid by such
Trustee except as provided in Section 2.6 hereof. The Depositor shall make no
claim upon the Trust Property for the payment of such expenses.
SECTION 2.4. Issuance of the Preferred Securities. As of June 23, 1997, the
Depositor and an Administrative Trustee on behalf of the Trust executed and
delivered the Purchase Agreement. Contemporaneously with the execution and
delivery of this Declaration, an Administrative Trustee, on behalf of the Trust,
shall execute in accordance with Section 5.2 and deliver to the Purchasers named
therein Preferred Securities Certificates, in an aggregate amount of 2,300,000
Preferred Securities having an aggregate Liquidation Amount of $115,000,000,
against receipt of the aggregate purchase price of such Preferred Securities of
$115,000,000, which amount the Administrative Trustees shall promptly deliver to
the Property Trustee.
SECTION 2.5. Subscription and Purchase of Debentures; Issuance of the
Common Securities. Contemporaneously with the execution and delivery of this
Declaration, the Administrative Trustees, on behalf of the Trust, shall
subscribe to and purchase from the Depositor Debentures, registered in the name
of the Property Trustee (in its capacity as such) and having an aggregate
principal amount equal to $103,556,700, and, in satisfaction of the purchase
price for such Debentures, the Property Trustee, on behalf of the Trust, shall
deliver to the Depositor the sum of $103,556,700. Contemporaneously therewith,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2 and deliver to the Depositor Common Securities Certificates
registered in the name of the Depositor, in an aggregate amount of 71,134 Common
Securities having an aggregate Liquidation Amount of $3,556,700 against receipt
of the aggregate purchase price of such Common Securities from the Depositor of
the sum of $3,556,700.
SECTION 2.6. Declaration of Trust. The exclusive purposes and functions of
the Trust are (a) to issue and sell Trust Securities and use the proceeds from
such sale to acquire the Debentures, (b) to distribute the Trust's income as
provided in this Declaration and (c) 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, mortgage or pledge any of its assets
or otherwise undertake (or permit to be undertaken) any activity that would
cause the Trust not to be classified for United States Federal income tax
purposes as a grantor trust. The Depositor hereby appoints the Trustees as
trustees of the Trust, to have all the rights, powers and duties to the extent
set forth herein, and the Trustees hereby accept such appointment. The Property
Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. 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 Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
SECTION 2.7. Authorization to Enter into Certain Transactions. (a) The
Trustees shall conduct the affairs of the Trust in accordance with the terms of
this Declaration. Subject to the limitations set forth in Section 2.6 and
paragraph (b) of this Section, and in accordance with the
<PAGE>
following provisions (i) and (ii), the Trustees shall have the exclusive power,
duty and the authority to cause the Trust to engage in the following activities:
(i) As among the Trustees, each Administrative Trustee shall
have the power and authority to act on behalf of the Trust with respect
to the following matters:
(A) to issue and sell the Trust Securities, provided,
however, that the Trust may issue no more than one series of
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 Trust Securities, and
the issuance of Trust Securities shall be limited to
simultaneous issuance of both Preferred Securities and Common
Securities on the Closing Date and any other date Preferred
Securities and Common Securities are sold pursuant to the
over-allotment option granted to the initial purchasers in the
Purchase Agreement, subject to the issuance of Trust
Securities pursuant to Section 5.5 and Successor Securities
pursuant to Section 9.5;
(B) to acquire the Debentures with the proceeds of
the sale of the Preferred Securities and the Common
Securities; provided, however, that the Administrative
Trustees shall cause legal title to be held of record in the
name of the Property Trustee for the benefit of the
Securityholders;
to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Registration
Rights Agreement, the Purchase Agreement and the Certificate
Depositary Agreement and such other agreements as may be
necessary or incidental to the purposes and function of the
Trust;
to assist in the registration of the Preferred
Securities under the Securities Act of 1933, as amended, and
under state securities or blue sky laws, and the qualification
of this Declaration as a trust indenture under the Trust
Indenture Act;
to assist in the listing of the Preferred Securities
upon such securities exchange or exchanges as shall be
determined by the Depositor and the registration of the
Preferred Securities under the Securities Exchange Act of
1934, as amended, and the preparation and filing of all
periodic and other reports and other documents pursuant to the
foregoing (only to the extent that such listing or
registration is requested by the Depositor);
to appoint a Paying Agent and a Securities Registrar
in accordance with this Declaration;
to the extent provided in this Declaration, to wind
up the affairs of and liquidate the Trust and prepare, execute
and file the certificate of cancellation with the Secretary of
State of the State of Delaware;
unless otherwise determined by the Depositor, the
Property Trustee or the Administrative Trustees, or as
otherwise required by the Delaware Business Trust Act or the
Trust Indenture Act, to execute on behalf of the Trust (either
acting alone or together with any other Administrative
Trustees) any documents that the
<PAGE>
Administrative Trustees have the power to execute pursuant to
this Declaration; and
to take any action incidental to the foregoing not
inconsistent with applicable law, the Certificate of Trust or
this Declaration as the Administrative Trustees may from time
to time determine in their discretion necessary or advisable
to give effect to the terms of this Declaration, including,
but not limited to:
(i) causing the Trust not to be deemed
to be an "Investment Company" required to be
registered under the 1940 Act;
(ii) causing the Trust not to be classified
for United States Federal income tax purposes as a
corporation; and
(iii) cooperating with the Depositor to
ensure that the Debentures will be treated as
indebtedness of the Depositor for United States
Federal income tax purposes;
provided that such action does not adversely affect in any
material respect the interests of Securityholders except as
otherwise provided in Section 10.2(a).
(ii) As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) the establishment of the Property Account;
(B) the receipt of and taking title to the
Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Property Account;
(D) the distribution from the Trust Property of
amounts owed to the Securityholders in respect of the Trust
Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(F) the sending of notices of default, other notices
and other information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Declaration;
(G) the distribution of the Trust Property in
accordance with the terms of this Declaration;
(H) to the extent provided in this Declaration, the
winding up of the affairs of and liquidation of the Trust and
the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
<PAGE>
(I) after an Event of Default, the taking of any
action incidental to the foregoing as the Property Trustee may
from time to time determine is necessary or advisable to give
effect to the terms of this Declaration and protect and
conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any
such action on any particular Securityholder);
(J) subject to this Section 2.7(a)(ii), the Property
Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in
Section 2.7(a)(i);
(K) to act as Paying Agent and/or Securities
Registrar to the extent appointed as such hereunder; and
(L) to appoint an authenticating agent in accordance
with this Declaration.
(b) So long as this Declaration remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trust shall not, and the Trustees shall not and shall
cause the Trust not to (i) invest any proceeds received by the Trust from
holding the Debentures (rather, the Trustees shall distribute all such proceeds
to the Securityholders pursuant to the terms of this Declaration and the Trust
Securities), acquire any investments or engage in any activities not authorized
by this Declaration, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests therein,
including to Securityholders, except as expressly provided herein, (iii) take
any action that would cause the Trust to fail or cease to qualify as a "grantor
trust" for United States Federal income tax purposes, (iv) make any loans or
incur any indebtedness for borrowed money or issue any other debt, (v) take or
consent to any action that would result in the placement of a Lien on any of the
Trust Property, (vi) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Trust Securities in any way whatsoever
except as permitted by the terms of this Declaration, or (vii) issue any
securities or other evidences of beneficial ownership of, or beneficial interest
in, the Trust other than the Trust Securities. The Administrative Trustees shall
defend all claims and demands of all Persons at any time claiming any Lien on
any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, with the following actions (and
any actions taken by the Depositor in furtherance of the following prior to the
date of this Declaration are hereby ratified and confirmed in all respects):
(i) to cause the Trust to file, at the expense of the
Depositor, with the Commission and to execute on behalf of the Trust a
registration statement on the appropriate form in relation to the
Preferred Securities, including any amendments thereto;
(ii) to determine the states and foreign jurisdictions in
which to take appropriate action to qualify or register for sale all or
part of the Preferred Securities and to do any
<PAGE>
and all such acts, other than actions which must be taken by or on
behalf of the Trust, and advise the Trustees of actions which they must
take on behalf of the Trust, and prepare for execution and filing any
documents to be executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such states and foreign jurisdictions;
(iii) to the extent necessary, to prepare for filing by the
Trust with the Commission and to execute on behalf of the Trust a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, including any amendments thereto (it
being understood that neither the Trust nor the Depositor has any
obligation under the Indenture, the Purchase Agreement or the
Declaration to register any Trust Securities under the Securities
Exchange Act of 1934, as amended, or to list any Trust Securities on
any securities exchange);
(iv) to cause the Trust to enter into, and execute, deliver
and perform on behalf of the Trust, the Registration Rights Agreement,
the Purchase Agreement and the Certificate Depositary Agreement and
such other agreements as may be necessary or incidental to the purposes
and functions of the Trust; and
(v) any other actions necessary or incidental to carry out any
of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act, or taxed as a corporation
for United States Federal income tax purposes and so that the Debentures will be
treated as indebtedness of the Depositor for United States Federal income tax
purposes. In this connection, the Depositor and the Administrative Trustees are
authorized to take any action, not inconsistent with applicable law, the
Certificate of Trust or this Declaration, that each of the Depositor and the
Administrative Trustees determines in their discretion to be necessary or
desirable for such purposes, so long as such action does not adversely affect in
any material respect the interests of the Holders of the Preferred Securities
except as otherwise provided in Section 10.2(a).
SECTION 2.8. Assets of Trust. The assets of the Trust shall consist of only
the Trust Property.
SECTION 2.9. Title to Trust Property. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Trust and the Securityholders in accordance with this Declaration. The
Securityholder 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.
ARTICLE 3
PROPERTY ACCOUNT
SECTION 3.1. Property Account. (a) On or prior to the Closing Date, the
Property Trustee shall establish the Property Account. The Property Trustee and
any agent of the Property
<PAGE>
Trustee shall have exclusive control and sole right of withdrawal with respect
to the Property Account for the purpose of making deposits in and withdrawals
from the Property Account in accordance with this Declaration. All monies and
other property deposited or held from time to time in the Property Account shall
be held by the Property Trustee in the Property Account for the exclusive
benefit of the Securityholders and for distribution as herein provided including
(and subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Property Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Property Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE 4
DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION
SECTION 4.1. Distributions. (a) Distributions on the Trust Securities shall
be cumulative, and shall accrue from the date of original issuance, or the most
recent Distribution Date (as defined herein) and, except in the event that the
Depositor exercises its right to defer the payment of interest on the Debentures
pursuant to the Indenture, shall be payable quarterly in arrears on January 1,
April 1, July 1, October 1 of each year, commencing on October 1, 1997 (which
dates correspond to the interest payment dates on the Debentures), when, as and
if available for payment by the Property Trustee, as further described in
paragraph (c) of this Section 4.1. If any date on which Distributions are
otherwise payable on the Trust Securities is not a Business Day, then the
payment of such Distributions shall be made on the next succeeding day which is
a Business Day and without any additional Distributions 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 (each date on which Distributions are payable in accordance with
this Section 4.1(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in
the Trust Property, and the Distributions on the Trust Securities shall be
payable at a rate of 6 1/2% per annum of the Liquidation Amount of the Trust
Securities, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. The amount of Distributions payable for any period
shall be computed on the basis of a 360-day year of twelve 30-day months. For
periods less than a three months, Distributions shall reflect interest on
Debentures computed on the basis of the actual number of elapsed days in such
period based on 30-day months. The amount of Distributions payable for any
period shall include Additional Sums, if any the Additional Amounts, if any and
Liquidated Damages, if any.
(c) Distributions on the Trust Securities shall be made by the Property
Trustee from the Property Account and shall be payable on each Distribution Date
only to the extent that the Trust has funds then on hand and available in the
Property Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be the date which is the fifteenth day (whether or not a
<PAGE>
Business Day) next preceding such Distribution Date (the "Relevant Record
Date").
SECTION 4.2. Redemption. (a) (i) Upon an optional redemption (as set forth
in the Indenture) of Debentures, the proceeds from such redemption shall be
applied to redeem Trust Securities having an aggregate Liquidation Amount equal
to the aggregate principal amount of the Debentures so redeemed by the
Depositor, including pursuant to Section 4.4, at the Optional Redemption Price,
and upon a mandatory redemption (as set forth in the Indenture) of Debentures,
the proceeds from such redemption shall be applied to redeem Trust Securities,
having an aggregate Liquidation Amount equal to the aggregate principal amount
of the Debentures so redeemed by the Depositor, at the Redemption Price.
(ii) If at any time following the Conversion Expiration Date, less than
five percent (5%) in principal amount of the Debentures originally issued by the
Depositor remain outstanding, such Debentures are redeemable, at the option of
the Depositor, in whole but not in part, at a Redemption Price equal to the
aggregate Liquidation Amounts thereof, and all accrued and unpaid interest; in
such event, the proceeds from such redemption shall be applied to redeem the
Outstanding Trust Securities.
(b) Notice of redemption (which notice will be irrevocable) shall be
given by the Property Trustee by first-class mail, postage prepaid, mailed not
less than 30 nor more than 60 days prior to the Redemption Date to the Depositor
and each Holder of Trust Securities to be redeemed, at such Holder's address as
it appears in the Securities Register. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or the Optional Redemption
Price, as the case may be;
(iii) the applicable CUSIP number;
(iv) if less than all of the Outstanding Trust Securities are
to be redeemed, the identification and the aggregate Liquidation Amount
of the particular Trust Securities to be redeemed;
(v) if the Preferred Securities are convertible, (A) that a
Holder of Preferred Securities who desires to convert such Preferred
Securities called for redemption must satisfy the requirements for
conversion contained in Section 4.3 below, (B) the Conversion Price,
and (C) the date and time when the option to convert shall expire;
(vi) that on the Redemption Date the Redemption Price or the
Optional Redemption Price, as the case may be, wi11 become due and
payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date and
the Trust Security will cease to have conversion requirements; and
(vii) the place or places where such Trust Securities are to
be surrendered for payment of the Redemption Price or the Optional
Redemption Price, as the case may be.
<PAGE>
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price or the Optional Redemption Price, as the case
may be, with the proceeds from the contemporaneous redemption of Debentures.
Redemption of the Trust Securities shall be made and the Redemption Price or the
Optional Redemption Price, as the case may be, shall be payable on each
Redemption Date only to the extent that the Trust has funds then on hand and
available in the Property Account for the payment of such Redemption Price or
the Optional Redemption Price, as the case may be.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee wil1, so long
as and to the extent the Preferred Securities are in book-entry-only form,
irrevocably deposit with the Clearing Agency for the Preferred Securities funds
sufficient to pay the applicable Redemption Price and will give the Depositor
irrevocable instructions and authority to pay the Redemption Price or the
Optional Redemption Price, as the case may be, to the Holders of such Preferred
Securities. If the Preferred Securities are no longer in book-entry only form,
the Property Trustee, subject to Section 4.2(c), will irrevocably deposit with
the Paying Agent funds sufficient to pay the applicable Redemption Price or
Optional Redemption Price, as the case may be, on such Preferred Securities held
in certificated form and will give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price or the Optional Redemption Price, as the
case may be, to the Holders thereof upon surrender of their Preferred Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the Relevant Record Dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then, upon the date of such deposit, all rights of
Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price or the
Optional Redemption Price, as the case may be, but without interest, on such
Redemption Date and such Trust Securities will cease to be Outstanding. In the
event that any date on which any Redemption Price or the Optional Redemption
Price, as the case may be, is payable is not a Business Day, then payment of the
Redemption Price or the Optional Redemption Price, as the case may be, payable
on such date will be made on the next succeeding day which is a Business Day and
without 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. In the event that payment of the
Redemption Price in respect of Preferred Securities called for redemption is
improperly withheld or refused and not paid by the Trust or by th Depositor
pursuant to the Guarantee, Distributions on such Preferred Securities will
continue to accumulate at the then applicable rate, from the Redemption Date
originally established by the Trust to the date such Redemption Price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purpose of calculating the Redemption Price.
(e) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated on a pro rata basis (based on
Liquidation Amounts) among the Common Securities and the Preferred Securities
that are to be redeemed. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption,
<PAGE>
by lot or by such other method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $50 or an integral multiple of $50 in excess thereof) of the
Liquidation Amount of the Preferred Securities. The Property Trustee shall
promptly notify the Securities Registrar and the Conversion Agent in writing of
the Preferred Securities selected for partial redemption and, in the case of any
Preferred Securities selected for redemption, the Liquidation Amount thereof to
be redeemed; it being understood that, in the case of Preferred Securities
registered in the name of and held of record by the Clearing Agency or any
nominee, the distribution of the proceeds of such redemption will be made in
accordance with the procedures of the Clearing Agency or its nominee. For all
purposes of this Declaration, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the Liquidation Amount of Preferred Securities which has been or
is to be redeemed. In the event of any redemption in part, the Trust shall not
be required to (i) issue, or register the transfer of or exchange of, any
Preferred Security during a period beginning at the opening of business 15 days
before any selection for redemption of Preferred Securities and ending at the
close of business on the earliest datein which the relevant notice of redemption
is deemed to have been given to all holders of Preferred Securities to be so
redeemed or (ii) register the transfer of or exchange of any Preferred
Securities so selected for redemption, in whole or in part, except for the
unredeemed portion of any Preferred Securities being redeemed in part.
SECTION 4.3. Conversion. The Holders of Trust Securities, subject to the
limitations set forth in this Section, shall have the right at any time
beginning 90 days following the first date of original issuance of the Preferred
Securities and ending on the Conversion Expiration Date, at their option, to
cause the Conversion Agent to convert Trust Securities, on behalf of the
converting Holders, into shares of Class A Common Stock in the manner described
herein on and subject to the following terms and conditions:
(i) The Trust Securities will be convertible into fully paid
and nonassessable shares of Class A Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Trust
Securities for a portion of the Debentures, and immediately convert
such amount of Debentures into fully paid and nonassessable shares of
Class A Common Stock at an initial rate of 1.7544 shares of Class A
Common Stock for each Trust Security (which is equivalent to a
conversion price of $28.50 per $50 principal amount of Debentures),
subject to certain adjustments set forth in the Indenture (as so
adjusted, the "Conversion Price").
(ii) In order to convert Trust Securities into Class A Common
Stock, the Holder of such Trust Securities shall submit to the
Conversion Agent an irrevocable Notice of Conversion to convert Trust
Securities on behalf of such Holder, together, if the Trust Securities
are in certificated form, with such certificates. The Notice of
Conversion shall (i) set forth the number of Trust Securities to be
converted and the name or names, if other than the Holder, in which the
shares of Class A Common Stock should be issued and (ii) direct the
Conversion Agent (a) to exchange such Trust Securities for a portion of
the Debentures held by the Property Trustee (at the rate of exchange
specified in the preceding paragraph) and (b) to immediately convert
such Debentures, on behalf of such Holder, into Class A Common Stock
and, if applicable, other securities, cash or property (at the
conversion rate specified in the preceding paragraph). The Conversion
Agent shall
<PAGE>
notify the Property Trustee of the Holder's election to exchange Trust
Securities for a portion of the Debentures held by the Property Trustee
and the Property Trustee 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 the Depositor of the Holder's election to convert such
Debentures into shares of Common Stock. Holders of Trust Securities at
the close of business on a Relevant Record Date for a Distribution will
be entitled to receive the Distribution paid on such Trust Securities
on the corresponding Distribution Date notwithstanding the conversion
of such Trust Securities following such Relevant Record Date but prior
to such Distribution Date. Except as provided above, neither the Trust
nor the Depositor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions whether or not in arrears accrued
on the Trust Securities surrendered for conversion, or on account of
any accumulated and unpaid dividends on the shares of Common Stock
issued upon such conversion. Trust Securities shall be deemed to have
been converted immediately prior to the close of business on the day on
which an irrevocable Notice of Conversion relating to such Trust
Securities is received by the Conversion Agent in accordance with the
foregoing provision (the "Conversion Date"). The Person or Persons
entitled to receive the Class A Common Stock issuable upon conversion
of the Debentures shall be treated for all purposes as the record
holder or holders of such Class A Common Stock on the date of
conversion. As promptly as practicable on or after the Conversion Date,
the Depositor shall issue and deliver at the office of the Conversion
Agent 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, 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.
(iii) Each Holder of a Trust Security by its acceptance
thereof initially appoints The Bank of New York not in its individual
capacity but solely as conversion agent (the "Conversion Agent") for
the purpose of effecting the conversion of Trust 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 Trust Securities directing it to
effect such conversion transactions. The Conversion Agent is hereby
authorized (i) to exchange Trust Securities from time to time for
Debentures held by the Trust in connection with the conversion of such
Trust Securities in accordance with this Section and (ii) to convert
all or a portion of the Debentures into Class A Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Section and to deliver to the Property Trustee any
new Debenture or Debentures for any resulting unconverted principal
amount delivered to the Conversion Agent by the Debenture Trustee.
(iv) No fractional shares of Class A Common Stock will be
issued as a result of conversion, but, in lieu thereof, such fractional
interest will be paid in cash by the Depositor to the Conversion Agent
in an amount equal to the Current Market Price of such fractional share
on the date on which Trust Securities were dully surrendered to the
Conversion Agent for conversion, and the Conversion Agent will in turn
make such payment to the Holder or Holders of Trust Securities so
converted.
<PAGE>
(v) Nothing in this Section 4.3 shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Trust
Securities or as set forth in this Declaration or otherwise required of
the Property Trustee or the Trust to pay any amounts on account of such
withholdings.
SECTION 4.4. Special Event Exchange or Redemption. (a) If a Special Event
shall occur and be continuing, the Property Trustee, the Delaware Trustee and
the Administrative Trustees shall direct the Conversion Agent to exchange all
Outstanding Trust Securities for Debentures having a principal amount equal to
the aggregate Liquidation Amount of the Trust Securities to be exchanged and to
dissolve the Trust; provided, however, that, in the case of a Tax Event, the
Depositor shall have the right to (i) direct that less than all, or none, as
appropriate, of the Trust Securities be so exchanged if and for so long as the
Depositor shall have elected to pay any Additional Sums such that the net
amounts received by Holders of Trust Securities not so exchanged in respect of
Distributions and other distributions are not reduced as a result of such Tax
Event, and shall not have revoked any such election or failed to make such
payments or (ii) cause the Trust Securities to be redeemed in the manner set
forth below. If a Tax Event shall occur or be continuing, the Depositor shall
have the right, upon not less than 30 nor more than 60 days' notice, to redeem
the Debentures, in whole or in part, for cash upon the later of (i) 90 days
following the occurrence of such Tax Event or (ii) July 2, 2000. Promptly
following such redemption, Trust Securities with an aggregate liquidation amount
equal to the aggregate principal amount of the Debentures so redeemed will be
redeemed by the Trust at the Optional Redemption Price on a pro rata basis,
except as provided for in Section 4.5.
(b) Notice of any exchange pursuant to this Section 4.4 (an "Exchange
Notice") of the Trust Securities, which Exchange Notice shall be irrevocable,
will be given by the Property Trustee by first-class mail to the Depositor and
to each record Holder of Trust Securities to be exchanged not fewer than 30 nor
more than 60 days prior to the date fixed for exchange thereof. For purposes of
the calculation of the date of exchange and the dates on which notices are given
pursuant to this paragraph (b), an Exchange Notice shall be deemed to be given
on the day such notice is first mailed by first-class mail, postage prepaid, to
each Holder. Each Exchange Notice shall be addressed to each Holder of Trust
Securities at the address of such Holder appearing in the books and records of
the Trust. Each Exchange Notice shall state: (A) the exchange date; (B) the
aggregate Liquidation Amount on the Trust Securities to be exchanged and the
aggregate principal amount of the Debentures to be exchanged therefor; (C) that
on the exchange date the Trust Securities to be so exchanged shall be exchanged
for Debentures and that Distributions on the Trust Securities so exchanged will
cease to accumulate on and after said date; and (D) the identity of the
Conversion Agent, if any, and the place or places where each Trust Certificate
to be exchanged is to be surrendered in exchange for Debentures. No defect in
the Exchange Notice or in the mailing thereof with respect to any Trust Security
shall affect the validity of the exchange proceedings for any other Trust
Security.
(c) In the event that fewer than all the Outstanding Preferred
Securities are to be exchanged, then, on the exchange date, (i) if all of the
Outstanding Preferred Securities are represented by Definitive Preferred
Securities Certificates, the particular Preferred Securities to be exchanged
will be selected by the Property Trustee from the Outstanding Preferred
Securities not previously called for redemption or exchange on a pro rata basis
(based on Liquidation Amounts), (ii) if all of the Outstanding Preferred
Securities are represented by Book-Entry
<PAGE>
Preferred Securities Certificates, the Property Trustee shall provide for the
selection for exchange of a portion of the Global Certificate representing the
Book-Entry Preferred Securities Certificates on a pro rata basis (based on
Liquidation Amounts) and (iii) if Outstanding Trust Securities are represented
by both Definitive Preferred Securities Certificates and Book-Entry Preferred
Securities Certificates, the Property Trustee shall select the portion of the
Global Certificate representing the Book-Entry Preferred Securities Certificates
and the particular Outstanding Preferred Securities represented by Definitive
Preferred Securities Certificates to be exchanged on a pro rata basis. In the
case of clause (ii) or (iii) above, the particular Book-Entry Preferred
Securities Certificates to be exchanged shall be selected in accordance with the
applicable rules and procedures for the Clearing Agency in whose name, or whose
nominee's name, such global certificate is then held. Any Preferred Securities
Certificate that is to be exchanged only in part shall be surrendered with due
endorsement or by a written instrument of transfer fully executed by the Holder
thereof (or its attorney duly authorized in writing) and the Trust shall prepare
and deliver to such Holder, without service charge, a new Preferred Securities
Certificate or Certificates in aggregate stated Liquidation Amount equal to, and
in exchange for, the unredeemed portion of the Preferred Securities Certificate
so surrendered. The Common Securities shall be exchanged in a similar manner.
(d) In the event of an exchange pursuant to this Section 4.4, on the
date fixed for any such exchange, (i) if the Preferred Securities are
represented by Book-Entry Preferred Securities Certificates, the Clearing Agency
or its nominee, as the record Holder of the Preferred Securities, will exchange
through the Conversion Agent the Global Certificate representing the Preferred
Securities to be exchanged for a registered Global Certificate or certificates
representing the Debentures to be delivered upon such exchange, (ii) if the
Preferred Securities are represented by Definitive Preferred Securities
Certificates, the certificates representing the Preferred Securities to be so
exchanged will be deemed to represent Debentures having a principal amount equal
to the aggregate stated Liquidation Amount of such Preferred Securities until
such certificates are presented to the Conversion Agent for exchange for
definitive certificates representing Debentures and (iii) all rights of the
Holders of the Preferred Securities so exchanged will cease, except for the
right of such Holders to receive Debentures. The Common Securities shall be
exchanged in a similar manner.
(e) Each Holder, by becoming a party to this Declaration pursuant to
Section 10.11 of this Declaration, will be deemed to have agreed to be bound by
these exchange provisions in regard to the exchange of Trust Securities for
Debentures pursuant to the terms described above.
(f) Nothing in this Section 4.4 shall limit the requirement of the
Trust to withhold taxes pursuant to the terms of the Trust Securities or as set
forth in this Declaration or otherwise require the Property Trustee or the Trust
to pay any amounts on account of such withholdings.
(g) In order to maintain the eligibility of the Depositor to operate
vessels in the U.S. domestic trade, 75% of the outstanding Capital Stock and
voting power of the Depositor is required to be held by U.S. citizens. As a
result of this requirements, any non-citizen Holder of the Preferred Securities
will, to the extent the conversion thereof into shares of Class A Common Stock
would cause more than 25% of the Depositor's outstanding Common Stock to be held
by non-citizens, be unable to convert such Preferred Securities into shares of
Class A Common Stock and will be required to sell its Preferred Securities to
U.S. citizens in order to realize the economic benefits, if any, of conversion.)
<PAGE>
SECTION 4.5. Subordination of Common Securities. Payment of Distributions
(including Additional Sums, Additional Amounts and Liquidated Damages, if
applicable) on, and the Redemption Price or Optional Redemption Price of, the
Trust Securities, as applicable, shall be made pro rata based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any Distribution
Date or Redemption Date an Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Sums,
Additional Amounts and Liquidated Damages, if applicable) on, or the Redemption
Price or Optional Redemption Price of, any Common Security, and no other payment
on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Sums, Additional Amounts and
Liquidated Damages, if applicable) on all Outstanding Preferred Securities for
all Distribution periods terminating on or prior thereto, or in the case of
payment of the Redemption Price the full amount of such Redemption Price or
Optional Redemption Price on all Outstanding Preferred Securities, shall have
been made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Sums, Additional Amounts and Liquidated
Damages, if applicable) on, or the Redemption Price or Optional Redemption Price
of, Preferred Securities then due and payable.
SECTION 4.6. Payment Procedures. Payments in respect of the Preferred
Securities shall be made by check mailed to the address of the Person entitled
thereto as such address shall appear on the Securities Register or, if the
Preferred Securities are held by a Clearing Agency, such Distributions shall be
made to the Clearing Agency in immediately available funds, in accordance with
the Certificate Depositary Agreement on the applicable Distribution Dates or
Redemption Dates. Payments, if any, in respect of the Common Securities shall be
made in such manner as shall be mutually agreed between the Property Trustee and
the Holder of the Common Securities.
SECTION 4.7. Tax Returns and Reports. The Administrative Trustees shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States Federal, State and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this regard, the
Administrative Trustees shall (a) prepare and file (or cause to be prepared or
filed) Form 1041 or the appropriate Internal Revenue Service form required to be
filed in respect of the Trust in each taxable year of the Trust and (b) prepare
and furnish (or cause to be prepared and furnished) to each Securityholder a
Form 1099 or the appropriate Internal Revenue Service form required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor and the
Property Trustee with a copy of all such returns, reports and schedules promptly
after such filing or furnishing. The Trustees shall comply with United States
Federal withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders under the Trust
Securities.
SECTION 4.8. Payment of Taxes, Duties, Etc. of the Trust. Upon receipt
under the Debentures of Additional Sums, the Property Trustee, upon receipt of
written notice from the Depositor or the Administrative Trustees, shall promptly
pay from such Additional Sums any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
<PAGE>
SECTION 4.9. Payments under Indenture. Any amount payable hereunder to any
Holder of Preferred Securities (and any Owner with respect thereto) shall be
reduced by the amount of any corresponding payment such Holder (or Owner) has
directly received pursuant to Section 5.8 of the Indenture in accordance with
the terms of Section 6.8 hereof.
ARTICLE 5
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership. Upon the formation of the Trust and until
the issuance of the Trust Securities, and at any time during which no Trust
Securities are Outstanding, the Depositor shall be the sole beneficial owner of
the Trust.
SECTION 5.2. The Trust Securities Certificates. The Preferred Securities
Certificates shall be issued in minimum denominations of $50 Liquidation Amount
and integral multiples of $50 in excess thereof, and the Common Securities
Certificates shall be issued in denominations of $50 Liquidation Amount and
integral multiples thereof. The consideration received by the Trust for the
issuance of the Trust Securities shall constitute a contribution to the capital
of the Trust and shall not constitute a loan to the Trust. Preferred Securities
initially sold to qualified institutional buyers in reliance on Rule 144A under
the Securities Act ("Rule 144A Preferred Securities") initially will be
represented by one or more certificates in registered, global form
(collectively, the "Restricted Global Certificate"). Preferred Securities
initially sold in off-shore transactions in reliance on Regulation S
("Regulation S Preferred Securities") initially will be represented by one or
more certificates in registered, global form (collectively, the "Regulation S
Global Certificate" and, together with the Restricted Global Certificate, the
"Global Certificates"). Preferred Securities initially transferred, in
accordance with Section 5.4, to institutional accredited investors in a manner
exempt from the registration requirements of the Securities Act will be
exchanged for Preferred Securities in registered, certificated form (the
"Certificated Preferred Securities"). The Preferred Securities Certificates
shall be executed on behalf of the Trust by manual or facsimile signature of at
least one Administrative Trustee and authenticated by the Property Trustee. The
Common Securities Certificate shall be executed on behalf of the Trust by manual
signature of at least one Administrative Trustee. Trust Securities Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefit of this
Declaration, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.4.
SECTION 5.3. Delivery of Trust Securities Certificates. On the Closing
Date, the Administrative Trustees shall cause Trust Securities Certificates, in
an aggregate Liquidation Amount as provided in Sections 2.4 and 2.5, to be
executed by an Administrative Trustee on behalf of the Trust and delivered to or
upon the written order of an Administrative Trustee or authorized agent thereof
without further action by the Trust, in authorized denominations.
A Preferred Security Certificate shall not be valid until authenticated
by the manual
<PAGE>
signature of an authorized signatory of the Property Trustee. The signature
shall be conclusive evidence that the Trust Security Certificate has been
authenticated under this Declaration. Upon a written order of the Trust signed
by one Administrative Trustee, the Property Trustee shall authenticate the Trust
Security Certificates for original issue.
The Property Trustee may appoint an authenticating agent acceptable to
the Administrative Trustees to authenticate Preferred Security Certificates. An
authenticating agent may authenticate Preferred Security Certificates whenever
the Property Trustee may do so. Each reference in this Declaration to
authentication by the Property Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Property Trustee to deal with
the Depositor or an Affiliate with respect to the authentication of Preferred
Securities.
SECTION 5.4. Registration of Transfer and Exchange of Preferred Securities;
Restrictions on Transfer. (a) The Securities Registrar shall keep or cause to be
kept, at the office or agency maintained pursuant to Section 5.8, a register in
which, subject to such reasonable regulations as it may prescribe, the
Securities Registrar shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates (subject to Section 5.10 in the
case of the Common Securities Certificates) and registration of transfers and
exchanges of Preferred Securities Certificates as herein provided (such register
is herein sometimes referred to as the "Securities Register"). The Property
Trustee shall be the initial Securities Registrar.
Subject to the other provisions of this Declaration regarding
restrictions on transfer, upon surrender for registration of transfer of any
Preferred Security at an office or agency of the Depositor designated pursuant
to Section 5.8 for such purpose, the Depositor shall execute, and the Property
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Preferred Securities of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Declaration.
At the option of the Holder, and subject to the other provisions of
this Section 5.4, Preferred Securities may be exchanged for other Preferred
Securities of any authorized denomination and of a like Liquidation Amount, upon
surrender of the Preferred Securities to be exchanged at any such office or
agency. Whenever any Preferred Securities are so surrendered for exchange, the
Depositor shall execute, and the Property Trustee shall authenticate and
deliver, the Preferred Securities which the Holder making the exchange is
entitled to receive.
All Preferred Securities issued upon any registration of transfer or
exchange of Preferred Securities shall be the valid obligations of the
Depositor, evidencing the same obligation, and entitled to the same benefits
under this Declaration, as the Preferred Securities surrendered upon such
registration of transfer or exchange.
Every Preferred Security presented or surrendered for registration of
transfer or for exchange shall (if so requested by the Depositor or the
Securities Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Depositor and the Securities
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Preferred
<PAGE>
Securities Certificates, but the Securities Registrar may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Preferred Securities Certificates,
other than exchanges pursuant to Sections 4.2(c), 4.4 and 5.13.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Declaration or the Preferred Securities, transfers and
exchanges of Preferred Securities and beneficial interests in a Global
Certificate of the kinds specified in this Section 5.4(b) shall be made only in
accordance with this Section 5.4(b).
(i) Restricted Global Certificate to Regulation S Global
Certificate. If the owner of a beneficial interest in the Restricted
Global Certificate wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Regulation S Global Certificate, such transfer may be
effected in accordance with the provisions of this Clause (b)(i) and
Clause (b) (vii) below and subject to the Applicable Procedures. Upon
receipt by the Property Trustee, as Securities Registrar, of (A) an
order given by the Clearing Agency or its authorized representative
directing that a beneficial interest in the Regulation S Global
Certificate in a specified Liquidation Amount (or share amount) be
credited to a specified participant's account and that a beneficial
interest in the Restricted Global Certificate in an equal Liquidation
Amount (or share amount) be debited from another specified
participant's account and (B) a Regulation S Certificate, satisfactory
to the Property Trustee and duly executed by the owner of such
beneficial interest in the Restricted Global Certificate or his
attorney duly authorized in writing, then the Property Trustee, as
Securities Registrar but subject to Clause (b)(vii) below, shall reduce
the share number of the Restricted Global Certificate and increase the
share number of the Regulation S Global Certificate by such specified
Liquidation Amount (or share amount) as provided in Section 5.11(b).
(ii) Regulation S Global Certificate to Restricted Global
Certificate. If the owner of a beneficial interest in the Regulation S
Global Certificate wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Certificate, such transfer may be
effected only in accordance with this Clause (b)(ii) and subject to the
Applicable Procedures. Upon receipt by the Property Trustee, as
Securities Registrar, of (A) an order given by the Clearing Agency or
its authorized representative directing that a beneficial interest in
the Restricted Global Certificate in a specified Liquidation Amount (or
share amount) be credited to a specified participant's account and that
a beneficial interest in the Regulation S Global Certificate in an
equal Liquidation Amount (or share amount) be debited from another
specified participant's account and (B) if such transfer is to occur
during the Restricted Period, a Restricted Securities Certificate,
satisfactory to the Property Trustee and duly executed by the owner of
such beneficial interest in the Regulation S Global Certificate or his
attorney duly authorized in writing, then the Property Trustee, as
Securities Registrar, shall reduce the principal amount of the
Regulation S Global Certificate and increase the Liquidation Amount (or
share amount) of the Restricted Global Certificate by such specified
Liquidation Amount (or share amount) as provided in Section 5.11(b).
(iii) Restricted Non-Global Certificate to Restricted
Global Certificate or
<PAGE>
Regulation S Global Certificate. If the Holder of a Restricted Security
(other than a Global Certificate) wishes at any time to transfer all or
any portion of such Restricted Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the Restricted
Global Certificate or the Regulation S Global Certificate, such
transfer may be effected only in accordance with the provisions of this
Clause (b)(iii) and Clause (b)(vii) below and subject to the Applicable
Procedures. Upon receipt by the Property Trustee, as Securities
Registrar, of (A) such Restricted Security as provided in Section
5.4(a) and instructions satisfactory to the Property Trustee directing
that a beneficial interest in the Restricted Global Certificate or
Regulation S Global Certificate in a Liquidation Amount (or share
amount) not greater than the Liquidation Amount (or share amount) of
such Preferred Security be credited to a specified participant's
account and (B) a Restricted Securities Certificate, if the specified
account is to be credited with a beneficial interest in the Restricted
Global Certificate, or a Regulation S Certificate, if the specified
account is to be credited with a beneficial interest in the Regulation
S Global Certificate, in either case satisfactory to the Property
Trustee and duly executed by such Holder or his attorney duly
authorized in writing, then the Property Trustee, as Securities
Registrar but subject to Clause (b)(vii) below, shall cancel such
Restricted Security (and issue a new Restricted Security in respect of
any untransferred portion thereof) as provided in Section 5.4(a) and
increase the Liquidation Amount (or share amount) of the Restricted
Global Certificate or the Regulation S Global Certificate, as the case
may be, by the specified Liquidation Amount (or share amount) as
provided in Section 5.11(b).
(iv) Regulation S Non-Global Certificate to Restricted Global
Certificate or Regulation S Global Certificate. If the Holder of a
Regulation S Preferred Security (other than a Global Certificate)
wishes at any time to transfer all or any portion of such Regulation S
Security to a Person who wishes to acquire the same in the form of a
beneficial interest in the Restricted Global Certificate or the
Regulation S Global Certificate, such transfer may be effected only in
accordance with this Clause (b)(iv) and Clause (b)(vii) below and
subject to the Applicable Procedures. Upon receipt by the Property
Trustee, as Securities Registrar, of (A) such Regulation S Security as
provided in Section 5.4(a) and instructions satisfactory to the
Property Trustee directing that a beneficial interest in the Restricted
Global Certificate or Regulation S Global Certificate in a specified
share amount not greater than the share amount of such Preferred
Security be credited to a specified participant's account and (B) if
the transfer is to occur during the Restricted Period and the specified
account is to be credited with a beneficial interest in the Restricted
Global Certificate, a Restricted Securities Certificate satisfactory to
the Property Trustee and duly executed by such Holder or his attorney
duly authorized in writing then the Property Trustee, as Securities
Registrar but subject to Clause (b)(vii) below, shall cancel such
Regulation S Security (and issue a new Regulation S Security in respect
of any untransferred portion thereof) as provided in Section 5.4(a) and
increase the Liquidation Amount (or share amount) of the Restricted
Global Certificate or the Regulation S Global Certificate, as the case
may be, by the specified Liquidation Amount (or share amount) as
provided in Section 5.11(b).
(v) Non-Global Certificate to Non-Global Certificate. A
Security that is not a Global Certificate may be transferred, in whole
or in part, to a Person who takes delivery in the form of another
Security that is not a Global Certificate as provided in Section 5.11,
provided that, if the Security to be transferred in whole or in part is
a Restricted
<PAGE>
Security, or is a Regulation S Preferred Security and the transfer is
to occur during the Restricted Period, then the Property Trustee shall
have received (A) a Restricted Securities Certificate, satisfactory to
the Property Trustee and duly executed by the transferor Holder or his
attorney duly authorized in writing, in which case the transferee
Holder shall take delivery in the form of a Restricted Security, or (B)
a Regulation S Certificate, satisfactory to the Property Trustee and
duly executed by the transferor Holder or his attorney duly authorized
in writing, in which case the transferee Holder shall take delivery in
the form of a Regulation S Preferred Security (subject in every case to
Section 5.11(c)).
(vi) Exchanges between Global Certificate and Non-Global
Certificate. A beneficial interest in a Global Certificate may be
exchanged for a Preferred Security that is not a Global Certificate as
provided in Section 5.11 to an institution that is an accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D of the Securities Act of 1933, as amended, provided that,
if such interest is a beneficial interest in the Restricted Global
Certificate, or if such interest is a beneficial interest in the
Regulation S Global Certificate and such exchange is to occur during
the Restricted Period, then such interest shall be exchanged for a
Restricted Security (subject in each case to Section 5.4(c)). A
Preferred Security that is not a Global Certificate may be exchanged
for a beneficial interest in a Global Certificate only if (A) such
exchange occurs in connection with a transfer effected in accordance
with Clause (b)(iii) or (iv) above or (B) such Security is a Regulation
S Preferred Security and such exchange occurs after the Restricted
Period.
(vii) Regulation S Global Certificate to be Held Through
Euroclear or Cedel during Restricted Period. The Depositor shall use
its best efforts to cause the Clearing Agency to ensure that, until the
expiration of the Restricted Period, beneficial interests in the
Regulation S Global Certificate may be held only in or through accounts
maintained at the Clearing Agency by Euroclear or Cedel (or by
participants acting for the account thereof), and no person shall be
entitled to effect any transfer or exchange that would result in any
such interest being held otherwise than in or through such an account;
provided that this Clause (b)(vii) shall not prohibit any transfer or
exchange of such an interest in accordance with Clause (b)(ii) or (vi)
above.
(c) Securities Act Legends. Rule 144A Securities, Certificated
Preferred Securities and their respective Successor Securities shall bear a
Restricted Securities Legend as set forth in Section 5.15, and the Regulation S
Preferred Securities and their Successor Securities shall bear a Regulation S
Legend, subject to the following:
(i) subject to the following Clauses of this Section 5.4(c), a
Preferred Security or any portion thereof which is exchanged upon
transfer or otherwise, for a Global Certificate or any portion thereof
shall bear the Securities Act Legend borne by such Global Certificate
while represented thereby;
(ii) subject to the following Clauses of this Section 5.4(c),
a new Preferred Security which is not a Global Certificate and is
issued in exchange for another Preferred Security (including Global
Certificate) or any portion thereof, upon transfer or otherwise, shall
bear the Securities Act Legend borne by such other Preferred Security,
provided that, if such new Preferred Security is required pursuant to
Section 5.4(b)(v) or (vi) to be
<PAGE>
issued in the form of a Restricted Security, it shall bear a Restricted
Securities Legend and, if such new Preferred Security is so required to
be issued in the form of a Regulation S Preferred Security, it shall
bear a Regulation S Legend;
(iii) Any Preferred Securities which are sold or otherwise
disposed of pursuant to an effective registration statement under the
Securities Act (including the Shelf Registration Statement), together
with their Successor Securities shall not bear a Securities Act Legend;
the Depositor shall inform the Property Trustee in writing of the
effective date of any such registration statement registering the
Preferred Securities under the Securities Act and shall notify the
Property Trustee at any time when prospectuses may not be delivered
with respect to Preferred Securities to be sold pursuant to such
registration statement. The Property Trustee shall not be liable for
any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned registration statement;
(iv) at any time after the Preferred Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act,
a new Preferred Security which does not bear a Securities Act Legend
may be issued in exchange for or in lieu of a Preferred Security (other
than a Global Certificate) or any portion thereof which bears such a
legend if the Property Trustee has received an Unrestricted Securities
Certificate, satisfactory to the Property Trustee and duly executed by
the Holder of such legended Preferred Security or his attorney duly
authorized in writing, and after such date and receipt of such
certificate, the Property Trustee shall authenticate and deliver such a
new Preferred Security in exchange for or in lieu of such other
Preferred Security as provided in this Article 5;
(v) a new Preferred Security which does not bear a Securities
Act Legend may be issued in exchange for or in lieu of a Preferred
Security (other than a Global Certificate) or any portion thereof which
bears such a legend if, in the Depositor's judgment, placing such a
legend upon such new Preferred Security is not necessary to ensure
compliance with the registration requirements of the Securities Act,
and the Property Trustee, at the direction of the Depositor, shall
authenticate and deliver such a new Preferred Security as provided in
this Article 5; and
(vi) notwithstanding the foregoing provisions of this Section
5.4(c), a Successor Security of a Preferred Securities that does not
bear a particular form of Securities Act Legend shall not bear such
form of legend unless the Depositor has reasonable cause to believe
that such Successor Security is a "restricted security" within the
meaning of Rule 144, in which case the Property Trustee, at the
direction of the Depositor, shall authenticate and deliver a new
Preferred Security bearing a Restricted Securities Legend in exchange
for such Successor Security as provided in this Article 5.
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have
<PAGE>
been acquired by a bona fide purchaser, the Administrative Trustees, or any one
of them, on behalf of the Trust shall execute and make available for
authentication in the case of the Preferred Securities Certificates and
delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Securities Certificate, a new Trust Securities Certificate of like
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Securities Registrar may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicative Trust Securities Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
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 Trust Securities.
SECTION 5.6. Persons Deemed Securityholders. The Property Trustee and the
Securities Registrar shall treat the Person in whose name any Trust Securities
Certificate shall be registered in the Securities Register as the owner of such
Trust Securities Certificate for the purpose of receiving Distributions and for
all other purposes whatsoever, and neither the Property Trustee nor the
Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.7. Access to List of Securityholders' Names and Addresses. The
Administrative Trustees or the Depositor shall furnish or cause to be furnished
(unless the Property Trustee is acting as Securities Registrar with respect to
the Trust Securities under the Declaration) a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the
Securityholders as of the most recent record date (a) to the Property Trustee,
quarterly at least five Business Days before each Distribution Date, and (b) to
the Property Trustee, promptly after receipt by the Depositor of a request
therefor from the Property Trustee in order to enable the Property Trustee to
discharge its obligations under this Declaration, in each case to the extent
such information is in the possession or control of the Administrative Trustees
or the Depositor and is not identical to a previously supplied list or has not
otherwise been received by the Property Trustee in its capacity as Securities
Registrar. The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Declaration or under the
Trust Securities, and the corresponding rights of the Trustee shall be as
provided in the Trust Indenture Act, except to the extent Section 3819 of the
Delaware Business Trust Act would require greater access to such information, in
which case the latter shall apply. Each Holder, by receiving and holding a Trust
Securities Certificate, and each Owner shall be deemed to have agreed not to
hold the Depositor, the Property Trustee or the Administrative Trustees
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
SECTION 5.8. Maintenance of Office or Agency. The Securities Registrar
shall maintain in The City of New York an office or offices or agency or
agencies where Preferred Securities Certificates may be surrendered for
registration of transfer, exchange or conversion and where notices and demands
to or upon the Trustees in respect of the Trust Securities Certificates may be
served. The Securities Registrar initially designates 101 Barclay Street, Floor
21, West New York, New York 10286, Attention: Corporate Trust Administration, as
its principal corporate trust office for such purposes. The Securities Registrar
shall give prompt written notice to the
<PAGE>
Depositor and to the Securityholders of any change in the location of the
Securities Register or any such office or agency.
SECTION 5.9. Appointment of Paying Agent. In the event that the Preferred
Securities are not in book-entry form only, the Trust shall maintain in the
Borough of Manhattan, The City of New York, an office or agency (the "Paying
Agent") where the Preferred Securities may be presented for payment. The Paying
Agent shall make Distributions to Securityholders from the Property Account and
shall report the amounts of such Distributions to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Property Account for the purpose of making the
Distributions referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent if such Trustees determine in their sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Declaration in any material respect. The Paying Agent shall initially
be the Property Trustee, and any co-paying agent chosen by the Property Trustee
and acceptable to the Administrative Trustees and the Depositor. Any Person
acting as Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Property Trustee and the Depositor. In the event
that the Property Trustee shall no longer be the Paying Agent or a successor
Paying Agent shall resign or its authority to act be revoked, the Administrative
Trustees shall appoint a successor that is acceptable to the Property Trustee
and the Depositor to act as Paying Agent (which shall be a bank or trust
company). Each successor Paying Agent or any additional Paying Agent shall agree
with the Trustees that, as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to each Securityholder. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Declaration to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 5.10. Ownership of Common Securities by Depositor. On the Closing
Date provided for in Section 2.5, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest extent
permitted by law, any attempted transfer of the Common Securities shall be void.
The Administrative Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".
SECTION 5.11. Global Securities; Non-Global Securities; Common Securities
Certificate. (a) Each Global Certificate authenticated under this Declaration
shall be registered in the name of the Clearing Agency designated by the
Depositor for such Global Certificate or a nominee thereof and delivered to such
Clearing Agency or a nominee thereof or custodian therefor, and each such Global
Certificate shall constitute a Preferred Security for all purposes of this
Declaration.
(b) If a Global Certificate is to be exchanged for Certificated
Preferred Securities or canceled in whole, it shall be surrendered by or on
behalf of the Clearing Agency, its nominee or custodian to the Property Trustee,
as Securities Registrar, for exchange or cancellation as
<PAGE>
provided in this Article 5. If any Global Certificate is to be exchanged for
Certificated Preferred Securities or canceled in part, or if another Preferred
Security is to be exchanged in whole or in part for a beneficial interest in any
Global Certificate, in each case, as provided in Section 5.4, then either (i)
such Global Certificate shall be so surrendered for exchange or cancellation as
provided in this Article 5 or (ii) the Liquidation Amount (or share amount)
thereof shall be reduced or increased by an amount equal to the portion thereof
to be so exchanged or canceled, or equal to the Liquidation Amount (or share
amount) of such Certificated Preferred Security to be so exchanged for a
beneficial interest therein, as the case may be, by means of an appropriate
adjustment made on the records of the Property Trustee, as Securities Registrar,
whereupon the Property Trustee, in accordance with the Applicable Procedures,
shall instruct the Clearing Agency or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Certificate, the Property Trustee shall, subject to Section 5.4 and
as otherwise provided in this Article 5, authenticate and deliver any Preferred
Securities issuable in exchange for such Global Certificate (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Clearing Agency or its authorized representative. Upon the
request of the Property Trustee in connection with the occurrence of any of the
events specified in the preceding paragraph, the Depositor shall promptly make
available to the Property Trustee a reasonable supply of Preferred Securities
that are not in the form of Global Certificates. The Propery Trustee shall be
entitled to rely upon any order, direction or request of the Clearing Agency or
its authorized representative which is given or made pursuant to this Article 5
if such order, direction or request is given or made in accordance with the
Applicable Procedures.
(c) Every Preferred Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Certificate or any portion thereof, whether pursuant to this Article 5 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Certificate, unless such Preferred Security is registered in the name of
a Person other than the Clearing Agency for such Global Certificate or a nominee
thereof.
(d) The Clearing Agency or its nominee, as registered owner of a Global
Certificate, shall be the holder of such Global Certificate for all purposes
under the Declaration and the Preferred Securities, and owners of beneficial
interests in a Global Certificate shall hold such interests pursuant to the
Applicable Procedures. Accordingly, any such Owner's beneficial interest in a
Global Certificate will be shown only on, and the transfer of such interest
shall be effected only through, records maintained by the Clearing Agency or its
nominee or its participants and such owners of beneficial interests in a Global
Certificate will not be considered the owners or holders of such Global
Certificate for any purpose of this Declaration or the Preferred Securities.
(e) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12. Notices to Clearing Agent. To the extent that a notice or
other communication to the Owners is required under this Declaration, unless and
until Definitive Preferred Securities Certificates shall have been issued to
Owners pursuant to Section 5.13, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agent, and
shall have no obligations to provide notices directly to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
Notwithstanding any other
<PAGE>
provision in this Declaration other than as provided for in Section 5.4(b)(vi),
no Global Certificate may be exchanged in whole or in part for Preferred
Securities registered, and no transfer of a Global Certificate in whole or in
part may be registered, in the name of any Person other than the Clearing Agency
for such Global Certificate or a nominee thereof unless (i) such Clearing Agency
(A) has notified the Depositor that it is unwilling or unable to continue as
Clearing Agency for such Global Certificate or (B) has ceased to be a "clearing
agency" registered as such under the Securities Exchange Act of 1934, as
amended, and in either case the Trust and the Depositor thereupon fail to
appoint a successor Clearing Agency within 90 days thereafter, (ii) the Trust
and the Depositor, at their option, notify the Property Trustee in writing that
it elects to cause the issuance of the Preferred Securities in certificated form
or (iii) there shall have occurred and be continuing an Event of Default or any
event which after notice or lapse of time or both would be an Event of Default.
In all cases, Certificated Preferred Securities delivered in exchange for an
Global Certificate or beneficial interests therein will be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the Clearing Agent (in accordance with its customary procedures).
SECTION 5.14. Rights of Securityholders. The legal title to the Trust
Property is vested exclusively in the Property Trustee (in its capacity as such)
in accordance with Section 2.9, and the Securityholders shall not have any right
or title therein other than the undivided beneficial interest in the assets of
the Trust conferred by their Trust Securities and they shall have no right to
call for any partition or division of property, profits or rights of the Trust
except as described below. The Trust Securities shall be personal property
giving only the rights specifically set forth therein and in this Declaration.
The Trust Securities shall have no preemptive or similar rights and, when issued
and delivered to Securityholders against payment of the purchase price therefor,
will be validly issued, fully paid and nonassessable beneficial interests in the
assets of the Trust. The Holders of the Trust Securities, in their capacities as
such, 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 5.15. Restrictive Legends. (a) The Restricted Global Certificate
and the Certificated Preferred Securities shall bear the following legend
(the "Restricted Securities Legend") unless the Depositor determines otherwise
in accordance with applicable law:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE, BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT(A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144A UNDER THE SECURITIES ACT (OF ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE
TRANSFER THE SECURITIES EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY, ISSUABLE
UPON
<PAGE>
CONVERSION OR EXCHANGE OF SUCH SECURITY EXCEPT (A) TO HVIDE MARINE INCORPORATED
OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144 UNDER THE SECURITIES ACT, (D)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE PREFERRED SECURITIES OR THE
DEBENTURES, AS THE CASE MAY BE, (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK,
THE TRANSFER AGENT FOR THE COMMON STOCK), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TOT HE EXEMPTION FROM
REGISTRATION PROVIDED BUY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND, IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE FOR THE PREFERRED SECURITIES OR THE DEBENTURES, AS THE CASE MAY BE (OR,
IF THIS CERTIFICTE EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE
COMMON STOCK AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE FOR THE PREFERRED SECURITIES OR THE DEBENTURES,
AS THE CASE MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
THE DEPOSITOR OR THE TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGISTRATION S UNDER THE SECURITIES ACT.
(b) The Regulation S Preferred Securities shall either bear the
Restricted Securities Legend or the following legend (the "Regulation S Legend")
unless the Depositor determines otherwise in accordance with the applicable law:
<PAGE>
"THE SECURITIES EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF (COLLECTIVELY, THE "SECURITIES") HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS SUCH
SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS THEREOF IS AVAILABLE."
ARTICLE 6
ACT OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights. (a) Except as provided in this
Section, in Section 8.9 and 10.2 and in the Indenture and as otherwise required
by law, no Holder of Preferred Securities shall have any right to vote or in any
manner otherwise control the administration, operation and management of the
Trust or the obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Trust Securities Certificates, be
construed so as to constitute the Securityholders from time to time as partners
or members of an association.
(b) (i) The Declaration may be amended from time to time by the
Depositor and the Trustees, without the consent of the Holders of the Preferred
Securities, (i) to cure any ambiguity, correct or supplement any provisions in
the Declaration that may be inconsistent with any other provisions, or to make
any other provisions with respect to matters or questions arising under the
declaration that shall not be inconsistent with the other provisions of the
Declaration, (ii) to modify, eliminate or add to any provision of the
declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Preferred Securities and Common Securities are outstanding
or to ensure that the Trust will not be required to register as an "investment
company" under the 1940 Act or be classified as other than a grantor trust for
United States federal income tax purposes or (iii) to qualify or maintain the
qualification of the Declaration under the Trust Indenture Act; provided,
however, that in the case of clause (i), such action shall not adversely affect
in any material respect the interests of any Holder of Preferred Securities or
Common Securities, and any amendments of the Declaration shall become effective
when notice thereof is given to the holders of Preferred Securities and Common
Securities.
(ii) The Declaration may be amended by the Trustees and the Depositor
with (i) the consent of Holders representing not less than a majority (based
upon Liquidation Amounts) of the Outstanding Preferred Securities and Common
Securities, acting as a single class, and (ii) receipt by the Trustees of an
Opinion of Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment will not affect
the Trust's status as a grantor trust for United States federal income tax
purposes or the Trust's exemption from the status of an "investment company"
under the 1940 Act; provided, further, that (a) without the consent of each
Holder of Preferred Securities and Common Securities, the Declaration may not be
amended to (i) change the amount or timing of any Distribution on the Preferred
Securities and Common Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Preferred Securities and
Common Securities as of a specified date or (ii) restrict the right of a holder
of Preferred Securities and Common Securities to institute suit for the
enforcement of any such payment on or after such date.
<PAGE>
(iii) Subject to Section 8.2 hereof, if an Event of Default with
respect to the Preferred Securities has occurred and been subsequently cured,
waived or otherwise eliminated, the provisions of Section 6.1(b)(iii)(2) hereof
shall apply. During (x) the period commencing on the date of the occurrence of
an Event of Default with respect to the Preferred Securities and ending on the
date when such Event of Default is cured, waived or otherwise eliminated, or (y)
any period not described in either the preceding sentence or the preceding
clause (x), the provisions of this Section 6.1(b)(iii)(1) shall apply.
(1) The Holders of a majority in aggregate liquidation amount
of the Preferred Securities 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 exercise any trust or power conferred
upon the Property Trustee under the Declaration, including the right to
direct the Property Trustee to exercise the remedies available to it as
a holder of the Debentures but excluding the right to direct the
Property Trustee to consent to an amendment, modification or
termination of the Indenture (which shall be as provided below). So
long as any Debentures are held by the Property Trustee, the Trustees
shall not (A) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee or
executing any trust or power conferred on the Debenture Trustee with
respect to such Debentures, (B) waive any past default which is
waivable under Section 5.13 of the Indenture, (C) exercise any right to
rescind or annul a 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, without, in each case, obtaining the prior approval
of the Holders of a majority in aggregate Liquidation Amount of all
Outstanding Preferred Securities (except in the case of clause (D),
which consent, in the event that no Event of Default shall occur and be
continuing, shall be of the Holders of all Trust Securities, voting
together as a single class); provided, however, that where a consent
under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of
Preferred Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Preferred Securities, except by a subsequent vote of the Holders of the
Preferred Securities. The Property Trustee shall notify all Holders of
record of the Preferred Securities of any notice of default received
from the Debenture Trustee with respect to the Debentures. In addition
to obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Trustees
shall, at the expense of the Depositor, obtain an Opinion of Counsel
experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation or partnership
for United States Federal income tax purposes on account of such
action.
(2) Subject to Section 8.2 of this Declaration and only after
the Event of Default with respect to the Preferred Securities has been
cured, waived, or otherwise eliminated the holders of a majority in
aggregate liquidation amount of the Common Securities 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 exercise any
trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee to
exercise the remedies available to it as a holder of the Debentures but
excluding the right to direct the Property Trustee to consent to an
<PAGE>
amendment, modification or termination of the Indenture (which shall be
as provided below). So long as any Debentures are held by the Property
Trustee, the Trustees shall not (A) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture
Trustee with respect to such Debentures, (B) waive any past default
which is waivable under Section 5.13 of the Indenture, (C) exercise any
right to rescind or annul a 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, without, in each case, obtaining the
prior approval of the Holders of a majority in aggregate Liquidation
Amount of all Common Securities (except in the case of clause (D),
which consent, in the event that no Event of Default shall occur and be
continuing, shall be of the Holders of all Trust Securities, voting
together as a single class); provided, however, that where a consent
under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of
Common Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Common
Securities, except by a subsequent vote of the Holders of the Common
Securities. The Property Trustee shall notify all Holders of record of
the Common Securities of any notice of default received from the
Debenture Trustee with respect to the Debentures. In addition to
obtaining the foregoing approvals of the Holders of the Common
Securities, prior to taking any of the foregoing actions, the Trustees
shall, at the expense of the Depositor, obtain an Opinion of Counsel
experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation or partnership
for United States Federal income tax purposes on account of such
action.
(c) If any proposed amendment to the Declaration provides for, or the
Trustees otherwise propose to effect the dissolution, winding-up or termination
of the Trust, other than pursuant to the terms of this Declaration, then the
Holders of Outstanding Preferred Securities as a 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 the Holders of a majority in aggregate
Liquidation Amount of the Outstanding Preferred Securities.
SECTION 6.2. Notice of Meetings. Notice of all meetings of the Holders of
the Preferred Securities, stating the time, place and purpose of the meeting,
shall be given by the Property Trustee pursuant to Section 10.8 to each
Preferred Securityholder of record, at its registered address, at least 15 days
and not more than 90 days before the meeting. At any such meeting, any business
properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without
further notice.
SECTION 6.3. Meetings of Preferred Securityholders. No annual meeting of
Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Preferred Securityholders of record of 25% of the Preferred
Securities (based upon their Liquidation Amount) and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a meeting of
the Holders of Preferred Securities to vote on any matters as to which such
Holders are entitled to vote.
<PAGE>
Holders of record of 50% of the Preferred Securities (based upon their
Liquidation Amount), present in person or by proxy, shall constitute a quorum at
any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Holders
of record of Preferred Securities present, in person or by proxy, holding more
than a majority of the Preferred Securities (based upon their Liquidation
Amount) held by Holders of record of Preferred Securities present, either in
Person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Declaration requires a greater number of
affirmative votes.
SECTION 6.4. Voting Rights. Securityholders shall be entitled to one vote
for each $50 of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are entitled to vote.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by the Depositor, the Trustees or any
affiliate of any Trustee shall, for purposes of such vote or consent, be treated
as if such Preferred Securities were not Outstanding.
SECTION 6.5. Proxies, Etc. At any meeting of Securityholders, any
Securityholders entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or
more officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in Person or represented by proxy in respect
of such Trust Securities, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
SECTION 6.6. Securityholder Action by Written Consent. Any action which may
be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding more than a majority of all Outstanding Trust Securities
(based upon their Liquidation Amount) entitled to vote in respect of such action
(or such larger proportion thereof as shall be required by any express provision
of this Declaration) shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes. For the purposes of
determining the Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or to participate in any Distribution on the
Trust Securities in respect of which a record date is not otherwise provided for
in this Declaration, or for the purpose of any other action, the Property
Trustee may from time to time fix a date, not more than 90 days prior to the
date of any meeting of Securityholders or the payment of Distributions or other
action, as the case may be, as a record date for the determination of the
identity of the Securityholders of record for such purposes.
<PAGE>
SECTION 6.8. Acts of Securityholders. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Declaration to be given, made or taken by Securityholders or Owners may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders or Owners in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to an Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidence thereby) are herein sometimes referred to as the
"Act" of the Securityholders or Owners signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Declaration and (subject to
Section 8.1) conclusive in favor of the Trustees, if made in the manner provided
in this Section.
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 any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
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 Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article 6, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
Upon the occurrence and continuation of an Event of Default, the
Holders of Preferred Securities shall rely on the enforcement by the Property
Trustee of its rights as holder of the Debentures against the Depositor. If the
Property Trustee fails to enforce its rights as holder of the Debentures after a
request therefor by a Holder of Preferred Securities, such Holder may
<PAGE>
proceed to enforce such rights directly against the Depositor. Notwithstanding
the foregoing, if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Depositor 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 shall have the right to institute a proceeding directly
against the Depositor for enforcement of payment to such Holder of the principal
amount of or interest on Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Preferred Securities of such Holder after
the respective due date specified in the Debentures (a "Direct Action"). In
connection with any such Direct Action, the rights of the Depositor will be
subrogated to the rights of any Holder of the Preferred Securities to the extent
of any payment made by the Depositor to such Holder of Preferred Securities as a
result of such Direct Action.
If the Guarantor Trustee (as defined in the Guarantee) fails to enforce
the Guarantee, any Holder of the Preferred Securities may institute a legal
proceeding directly against the Depositor under the Guarantee to enforce its
rights under the Guarantee without first instituting a legal proceeding against
the Guarantee Trustee, the Trust or any other Person. In addition, any Holder
Preferred Securities shall have the right, which is absolute and unconditional,
to proceed directly against the Depositor to obtain payments under the
Guarantee, without first waiting to determine if the Guarantee Trustee has
enforced the Guarantee or instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other Person. Similarly, a Holder of Common securities
shall have the right, which is absolute and unconditional, to proceed against
the Depositor to obtain payment under that certain Guarantee Agreement dated
June 27, 1997, of the Guarantee relating to the Common Securities.
SECTION 6.9. Inspection of Records. Upon reasonable notice to the
Administrative Trustees and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and the
Delaware Trustee. The Property Trustee and the Delaware Trustee, each severally
on behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Securityholders that (each such representation and
warranty made by the Property Trustee and the Delaware Trustee being made only
with respect to itself):
(a) the Property Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of New York;
(b) the Delaware Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(c) each of the Property Trustee and the Delaware Trustee has full
corporate power, authority and legal right to execute, deliver and perform its
obligations under this Declaration and has taken all necessary action to
authorize the execution, delivery and performance by it of this Declaration;
<PAGE>
(d) this Declaration has been duly authorized, executed and delivered
by each of the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of the Property Trustee and the Delaware
Trustee enforceable against each in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(e) the execution, delivery and performance by each of the Property
Trustee and the Delaware Trustee of this Declaration have been duly authorized
by all necessary corporate or other action on the part of the Property Trustee
and the Delaware Trustee and does not require any approval of stockholders of
the Property Trustee or the Delaware Trustee and such execution delivery and
performance will not (i) violate either of the Property Trustee's or the
Delaware Trustee's charter or by-laws, (ii) violate any provision of, or
constitute, with or without notice or lapse of time, a default under, or result
in the creation or imposition of any Lien on an properties included in the Trust
Property pursuant to the provisions of, any indenture, mortgage, credit
agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound, or (ii)
violate any law, governmental rule or regulation of the United States or the
State of Delaware, as the case may be, governing the banking, corporate, or
trust powers of the Property Trustee or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Property Trustee or
the Delaware Trustee;
(f) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Declaration nor the consummation of any
of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to, any governmental authority or agency under any
existing Federal law governing the banking, corporate or trust powers of the
Property Trustee or the Delaware Trustee, as the case may be, under the laws of
the United States or the State of Delaware;
(g) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Declaration.
SECTION 7.2. Representations and Warranties of Depositor. The Depositor
hereby represents and warrants for the benefit of the Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Declaration and
the Securityholders will be, as of such date, entitled to the benefits of this
Declaration; and
<PAGE>
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Declaration.
ARTICLE 8
THE TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities. (a) The duties and
responsibilities of the Trustees shall be as provided by this Declaration and,
in the case of the Property Trustee, by the Trust Indenture Act. The Property
Trustee, before the occurrence of any Event of Default and after the curing or
waiving of all Events of Default that may have occurred, shall undertake to
perform only such duties and obligations as are specifically set forth in this
Declaration and the Trust Indenture Act and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (and has not been cured or waived pursuant to Section 8.2) of which
a responsible officer of the Property Trustee has actual knowledge, the Property
Trustee shall exercise such rights and powers vested in it by this Declaration
and the Trust Indenture Act, and use the same degree of care and skill in its
exercise, as a prudent individual would exercise or use under the circumstances
in the conduct of his or her own affairs. Notwithstanding the foregoing, no
provision of this Declaration shall require the Trustees to expend or risk their
own funds or otherwise incur any financial liability in the performance of any
of their duties hereunder, or in the exercise of any of their rights or powers,
if they shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of this
Declaration relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
Nothing in this Declaration shall be construed to release the Administrative
Trustees from liability for their own grossly negligent action, their own
grossly negligent failure to act, or their own willful misconduct. To the extent
that, at law or in equity, an Administrative Trustee has duties (including
fiduciary duties) and liabilities relating thereto to the Trust r to the
Securityholders, such Administrative Trustee shall not be liable to the Trust or
to any Securityholder for such Administrative Trustee's 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 the Administrative
Trustees otherwise existing at law or in equity, are agreed by the Depositor and
the Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Declaration or, in the case of the Property Trustee, in the
Trust Indenture Act.
<PAGE>
(c) 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) this subsection shall not be construed to limit the
effectiveness of Subsection (a) of this Section;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(ii) 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 a majority of the
aggregate Liquidation Amount of the Trust Securities entitled 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; and
(iii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Declaration, nor
shall the Property Trustee be liable for the default or misconduct of
the Administrative Trustees or the Depositor.
(d) The Property Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Debentures and the Property Account
shall be to deal with such property as fiduciary assets, subject to the
protections and limitations on liability afforded to the Property Trustee under
this Declaration and the Trust Indenture Act.
(e) The Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Depositor and
money held by the Property Trustee need not be segregated from other funds held
by it except in relation to the Property Account maintained by the Property
Trustee pursuant to Section 3.l and except to the extent otherwise required by
law.
SECTION 8.2. Notice of Defaults. (a) Within ten days after the occurrence
of any Event of Default actually known to the Property Trustee, the Property
Trustee shall transmit, in the manner and to the extent provided in Section
10.8, notice of such Event of Default to the Holders of Preferred Securities,
the Administrative Trustees and the Depositor, unless such Event of Default
shall have been cured or waived, provided that, except for a default in the
payment of principal of (or premium, if any) or interest (including Additional
Sums, Additional Amounts and Liquidated Damages, if applicable) on any of the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as the Board of Directors, the executive committee, or a trust
committee of directors and/or responsible officers of the Property Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Preferred Securities.
(b) Within ten days after the receipt of notice of the Depositor's
exercise of its right to extend the interest payment period for the Debentures
pursuant to the Indenture, the Property
<PAGE>
Trustee shall transmit, in the manner and to the extent provided in Section
10.8, notice of such exercise to the Securityholders, unless such exercise shall
have been revoked.
(c) The Holders of a majority of the aggregate Liquidation Amount of
Outstanding Preferred Securities may, by vote, on behalf of the Holders of all
of the Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Debenture Event of Default:
(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 the
same proportion in aggregate Liquidation Amount of the Preferred
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
The provisions of Sections 6.1(b) and 8.2(d) and this Section 8.2(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 Preferred 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 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 Preferred Securities or impair any right consequent
thereon. Any waiver by the Holders of the Preferred Securities of an Event of
Default with respect to the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of any such Event of
Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(d) The Holders of a majority in aggregate 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 Debenture
Event of Default:
(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
8.2(d), 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 8.2(d), the Event of Default under the
Declaration may only be waived by the vote of the Holders of the same
proportion in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding;
<PAGE>
provided, further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated.
In such a case, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee to act
on their behalf. The provisions of Section 6.1(b) and 8.2(c) and this Section
8.2(d) 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 Preferred Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 8.2(d),
upon such waiver, any such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(e) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities constitutes
a waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 8.2(e) 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
Preferred Securities, as permitted by the Trust Indenture Act.
SECTION 8.3. Certain Rights of Property Trustee. Subject to the provisions
of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if no Event of Default has occurred and is continuing and, (i) in
performing its duties under this Declaration the Property Trustee is required to
decide between alternative courses of action or (ii) in construing any of the
provisions in this Declaration the Property Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein or (iii) the Property
Trustee is unsure of the application of any provision of this Declaration, then,
except as to any matter as to which the Holders of Preferred Securities are
entitled to vote under the terms of this Declaration, the Property Trustee shall
deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken and the Property Trustee shall
take such action, or refrain from taking such action, as the Property Trustee
shall be instructed in writing to take, or to refrain from taking, by the
Depositor; provided, however, that if the Property Trustee does not receive such
instructions of the Depositor within ten Business Days after it has delivered
such notice, or such reasonably shorter period of time set forth in such notice
(which to the extent practicable shall not be less than two Business Days), it
may, but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Declaration as it shall deem advisable and in the best
interests of the
<PAGE>
Securityholders, in which event the Property Trustee shall have no liability
except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(d) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be established before undertaking,
suffering or omitting any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officers' Certificate and an Opinion of
Counsel which, upon receipt of such request, shall be promptly delivered by the
Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to accomplish any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
re-recording, refiling or re-registration thereof;
(f) the Property Trustee may consult with counsel of its selection
(which counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) 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 and in accordance with such advice; and 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;
(g) 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 of the Securityholders pursuant to this Declaration, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make an investigation
into the facts or matters stated in any resolutions, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by Holders of record of 25% or more of the
Preferred Securities (based upon their Liquidation Amount), but the Property
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys or an Affiliate, provided that the
Property Trustee shall be responsible for its own negligence or
recklessness with respect to selection of any agent or attorney
appointed by it hereunder;
(ii) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request
<PAGE>
instructions from the Holders of the Trust Securities, which
instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to
direct the Property Trustee under the terms of the Trust Securities in
respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in acting in
accordance with such instructions; and
(iii) 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.
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 8.4. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Trust Securities Certificates shall not be
taken as the statements of the Trustees, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Depositor of the proceeds of the Debentures.
SECTION 8.5. May Hold Securities. Except as provided in the definition of
the term "Outstanding" in Article 1, any Trustee or any other agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and, subject to Section 8.8 and 8.12, may
otherwise deal with the Trust with the same rights it would have if it were not
a Trustee or such other agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay each of the Trustees from time to time such compensation for
all services rendered by such Trustee hereunder as the Depositor and such
Trustee may agree upon from time to time (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
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Declaration (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith;
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any
Trustee, and (iv) any employee or agent of the Trust
<PAGE>
or its Affiliates (referred to herein as an "Indemnified Person") from and
against any loss, damage, liability, tax, pena1ty, expense or claim of any kind
or nature whatsoever incurred by such Indemnified Person by reason of the
creation, operation, dissolution or termination of the Trust or 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 authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions; and
(d) no Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
SECTION 8.7. Property Trustee Required; Eligibility of Trustees. (a) There shall
at all times be a Property Trustee, which is a corporation organized and doing
business under the laws of the United States of America or of any State,
Territory or the District of Columbia, authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by federal,
state, territorial or District of Columbia authority hereunder with respect to
the Trust Securities. The Property Trustee 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 $100,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
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 Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative 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 persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
SECTION 8.8. Disqualification: Conflicting Interest. The Property Trustee
shall be subject to the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Property Trustee from filing with the
Commission the application referred to in the second to last paragraph of
Section 310(b) of the Trust Indenture Act. The Indenture and the Guarantee shall
be deemed to be specifically described in this Declaration for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
SECTION 8.9. Resignation and Removal; Appointment of Successor.
(a) Subject to Sections 8.9(b) and 8.9(c), Trustees (the "Relevant Trustee")
may be appointed or removed
<PAGE>
without cause at any time:
(i) until the issuance of any Trust Securities, by written
instrument executed by the Depositor; and
(ii) after the issuance of any Securities, (1) if the Property
Trustee or the Delaware Trustee, by the Administrative Trustees and (2)
if an Administrative Trustee, by vote of the Holders of a majority in
Liquidation Amount of the Common Securities voting as a class.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 8.9(a) until a successor possessing the qualifications
to act as a Property Trustee under Section 8.7 (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 Depositor and
the removed Property Trustee.
(c) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 8.9(a) until a successor possessing the qualifications
to act as Delaware Trustee under Section 8.7 (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 Depositor and
the removed Delaware Trustee.
(d) A Trustee appointed to office shall hold office until his, her or
its successor shall have been appointed or until his, her or its death, removal,
resignation, dissolution or liquidation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Depositor 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:
(1) 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
(2) 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 Depositor and the resigning Delaware Trustee.
(e) The Administrative Trustees shall use their best efforts to
promptly appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with Section
<PAGE>
8.9(d).
(f) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
8.9 within 60 days after delivery pursuant to this Section 8.9 of an instrument
of resignation or removal, the Property Trustee or Delaware Trustee resigning or
being removed, as applicable, may petition any court of competent jurisdiction
for appointment of a Successor Property Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(g) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(h) The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
(i) Notwithstanding the foregoing or any other provision of this
Declaration, in the event any Administrative Trustee or a Delaware Trustee who
is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of the remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies the
eligibility requirement for Administrative Trustees or the Delaware Trustee, as
the case may be, set forth in Section 8.7).
(j) The indemnity provided to a Trustee under Section 8.6 shall survive
any Trustee's resignation or removal.
SECTION 8.10. Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Trustee, such successor Trustee so
appointed shall execute, acknowledge and deliver to the Trust 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 Depositor 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 if the Property Trustee is the resigning Trustee shall duly
assign, transfer and deliver to the successor Trustee all property and money
held by such retiring Property Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee shall execute
and deliver an amendment hereto wherein each successor Relevant Trustee shall
accept such appointment and which (a) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Relevant Trustee all the rights, powers, trusts and duties of the
retiring Relevant Trustee and (b) shall add to or change any of the provisions
of this Declaration as shall
<PAGE>
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Relevant Trustee, it being understood that nothing
herein or in such amendment shall constitute such Relevant Trustees co-trustees
and upon the execution and delivery of such amendment the resignation or removal
of the retiring Relevant Trustee shall become effective to the extent provided
therein and each such successor Relevant Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee; but, on request of the Trust or any
successor Relevant Trustee, such retiring Relevant Trustee shall duly assign,
transfer and deliver to such successor Relevant Trustee all Trust Property, all
proceeds thereof and money held by such retiring Relevant Trustee hereunder.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Relevant Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided that such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto.
SECTION 8.12. Preferential Collection of Claims Against Depositor or Trust.
If and when the Property Trustee shall be or become a creditor of the Depositor
or the Trust (or any other obligor upon the Debentures or the Trust Securities),
the Property Trustee shall be subject to and shall take all actions necessary in
order to comply with the provisions of the Trust Indenture Act regarding the
collection of claims against the Depositor or Trust (or any such other obligor).
SECTION 8.13. Reports by Property Trustee. (a) To the extent required by
the Trust Indenture Act, within 60 days after May 15 of each year commencing
with May 15, 1998 the Property Trustee shall transmit to all Securityholders in
accordance with Section 10.8 and to the Depositor, a brief report dated as of
such December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if
to the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with
all of its obligations under this Declaration during the twelve-month
period (or, in the case of the initial report, the period since the
Closing Date) ending with such December 31 or, Property Trustee has not
complied in any material respects with such obligations, a
<PAGE>
description of such noncompliance; and
(iii) any change in the property and funds in its possession
as Property Trustee since the date of its last report and any action
taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Trust Securities.
(b) In addition, the Property Trustee shall transmit to Securityholders
such reports concerning the Property Trustee and its actions under this
Declaration as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of such report shall, at the time of such transmissions to
Holders, be filed by the Property Trustee with each national securities exchange
or self-regulatory organization upon which the Trust Securities are listed, with
the Commission and with the Depositor.
SECTION 8.14. Reports to the Property Trustee. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 8.15. Evidence of Compliance with Conditions Precedent. Each of the
Depositor and the Administrative 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) of
the Trust Indenture Act shall be given in the form of an Officers' Certificate.
SECTION 8.16. Number of Trustees. (a) The number of Trustees shall be
five, provided that the Holder of all of the Common Securities by written
instrument may increase or decrease the number of Administrative Trustees.
The Property Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.16(a), or if the
number of Trustees is increased pursuant to Section 8.16(a), a vacancy shall
occur.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.9, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Declaration), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Declaration.
SECTION 8.17. Delegation of Power. (a) Any Administrative 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 2.7(a),
<PAGE>
including any registration statement or amendment thereof filed with the
Commission, or making any other governmental filing.
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative 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.
ARTICLE 9
DISSOLUTION, LIQUIDATION, TERMINATION AND MERGER
SECTION 9.1. Dissolution upon Expiration Date. Unless earlier dissolved,
the Trust shall automatically dissolve on June 15, 2027 (the "Expiration Date").
SECTION 9.2. Early Dissolution. The first to occur of any of the
following events is an "Early Dissolution Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the distribution of Debentures to the Holders of the Trust
Securities, if the Depositor has given written direction to the Property Trustee
to terminate the Trust (which direction is optional and wholly within the
discretion of the Depositor);
(c) the occurrence of a Special Event except in the case of a Tax Event
following which the Depositor has elected (i) to pay any Additional Sums (in
accordance with Section 4.4) such that the net amount received by Holders of
Preferred Securities in respect of Distributions are not reduced as a result of
such Tax Event and the Depositor has not revoked any such election or failed to
make such payments or (ii) to redeem all or some of the Debentures pursuant to
Section 4.4(a);
(d) the redemption, conversion or exchange of all of the Trust
Securities;
(e) an order for dissolution of the Trust shall have been entered by a
court of competent jurisdiction; and
(f) receipt by the Property Trustee of written notice from the
Depositor at any time (which direction is optional and wholly within the
discretion of the Depositor) of its intention to dissolve the Trust and
distribute the Debentures in exchange for the Preferred Securities.
SECTION 9.3. Termination. The respective obligations and responsibilities
of the Trustees and the Trust created and continued hereby shall terminate upon
the latest to occur of the following: (a) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to Section
9.4, or upon the redemption of all of the Trust Securities pursuant to Section
4.2, of all amounts required to be distributed hereunder upon the final payment
of the Trust Securities; (b) the payment of all expenses owed by the Trust; and
(c) the discharge of all administrative duties of the Administrative Trustees,
including the performance
<PAGE>
of any tax reporting obligations with respect to the Trust or the
Securityholders.
SECTION 9.4. Liquidation. (a) If an Early Dissolution Event specified in
clause (a), (b), (c), (e) or (f) of Section 9.2 occurs or upon the Expiration
Date, the Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after paying or making
reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act, to each
Securityholder an aggregate principal amount of Debentures equal to the
aggregate Liquidation Amount of Trust Securities held by such Holder, subject to
Section 9.4(d). Notice of liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not later than 30 nor more than 60
days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address as it appears in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that, from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and any
Trust Securities Certificates not surrendered for exchange will be
deemed to represent an aggregate principal amount of Debentures equal
to the aggregate Liquidation Amount of Preferred Securities held by
such Holder; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for
Debentures, or, if Section 9.4(d) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) the Clearing Agency or its nominee, as the record holder of
such Trust Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any Trust Securities Certificates not held by the Clearing Agency will
be deemed to represent an aggregate principal amount of Debentures equal to the
aggregate Liquidation Amount of Preferred Securities held by such Holders, and
bearing accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such Trust Securities until such certificates are presented to
the Property Trustee for transfer or reissuance.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practicable, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up and terminated, by the Property Trustee after paying or
making reasonable
<PAGE>
provision to pay all claims and obligations of the Trust in accordance with
Section 3808(e) of the Business Trust Act in such manner as the Property Trustee
determines. In such event, on the date of the dissolution, Securityholders will
be entitled to receive out of the assets of the Trust available for distribution
to Securityholders, after paying or making reasonable provision to pay all
claims and obligations of the Trust in accordance with Section 3808(e) of the
Business Trust Act, an amount equal to the Liquidation Amount per Trust Security
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"). 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
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The Holder of the Common Securities will be entitled
to receive Liquidation Distributions upon any such dissolution pro rata
(determined as aforesaid) with Holders of Preferred Securities, except that, if
an Event of Default has occurred and is continuing, the Preferred Securities
shall have a priority over the Common Securities.
(e) As soon as is practicable after the occurrence of an Early
Dissolution Event or the Expiration Date and upon completion of the winding up
of the Trust, the Trustees (each of whom is authorized to take such action)
shall terminate the Trust by filing a certificate of cancellation with the
Secretary of State of the State of Delaware.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of the
Trust. The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 9.5. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Property Trustee, the
Delaware Trustee or the Holders of the Preferred Securities, the Trust may merge
with or into, consolidate, amalgamate, be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any state of the United States; provided
that (i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to Distributions and payments upon liquidation, redemption
and otherwise, (ii) the Depositor expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Debentures, (iii) the Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease the Depositor has received an Opinion of Counsel
from independent counsel to the Trust experienced in such matters to the effect
that (a) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of
<PAGE>
the Holders of the Preferred Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the Holder's
interest in the new entity), (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease neither the Trust nor
such successor entity will be required to register as an investment company
under the 1940 Act, and (c) following such merger, consolidation, amalgamation
or replacement, the Trust or such successor entity will be treated as a grantor
trust for United States Federal income tax purposes and (viii) the Depositor or
any permitted successor or assignee owns all of the Common Securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in aggregate Liquidation Amount of the Preferred Securities,
consolidate, amalgamate, merge with or into, be replaced by or convey, transfer
or lease its properties and assets substantially as an entirety to any other
entity or permit any other entity to consolidate, amalgamate, merge with or
into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity to
be classified as other than a grantor trust for United States Federal income tax
purposes.
ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Securityholders. The death or
incapacity of any person having an interest, beneficial or otherwise, in Trust
Securities shall not operate to terminate this Declaration, nor entitle the
legal representatives or heirs of such person or any Securityholder for such
person to claim an accounting, take any action or bring any proceeding in any
court for a partition or winding-up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
SECTION 10.2. Amendment. (a) This Declaration may be amended from time to
time by the Trustees and the Depositor, without the consent of any
Securityholders, (i) to cure any ambiguity, 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
Declaration, which shall not be inconsistent with the other provisions of this
Declaration, (ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States Federal income tax purposes as a grantor trust
at all times that any Trust Securities are Outstanding or to ensure that the
Trust will not be required to register as an "investment company" under the 1940
Act, or be classified as other than a grantor trust for United States Federal
income tax purposes, or (iii) to comply with the requirements of the Commission
in order to effect or maintain the qualification of this Declaration under the
Trust Indenture Act; provided, however, that in the case of clause (i), such
action shall not adversely affect in any material respect the interests of any
Securityholder, and any amendments of this Declaration shall become effective
when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this
Declaration may be amended by the Trustees and the Depositor with (i) the
consent of Holders representing not less than a majority (based upon Liquidation
Amounts) of the Trust Securities then Outstanding, acting as a single class, and
(ii) receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in
<PAGE>
accordance with such amendment will not affect the Trustee's status as a grantor
trust for United States Federal income tax purposes or the Trust's exemption
from the status of an "investment company" under the 1940 Act, provided,
however, that if any amendment or proposal that would adversely affect the
powers, preferences or special rights of the Trust Securities, whether by way of
amendment or otherwise, would adversely affect only the Preferred Securities or
only the Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of a majority in Liquidation Amount of such
class of Trust Securities.
(c) In addition to and notwithstanding any other provision in this
Declaration, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Declaration
may not be amended to (i) change the amount or timing of any Distribution on the
Trust Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a specified date or
(ii) restrict the right of a Securityholder to institute suit for the
enforcement of any such payment on or after such date; notwithstanding any other
provision herein, without the unanimous consent of the Securityholders (such
consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Declaration, no
Trustee shall enter into or consent to any amendment to this Declaration which
would cause the Trust to fail or cease to qualify for the exemption from the
status of an "investment company" under the 1940 Act or be classified as other
than a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Declaration to the contrary,
without the consent of the Depositor, this Declaration may not be amended in a
manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Declaration is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Declaration which affects its own
rights, duties or immunities under this Declaration. The Property Trustee shall
be entitled to receive an Opinion of Counsel and an Officers' Certificate
stating that any amendment to this Declaration is in compliance with this
Declaration.
SECTION 10.3. Separability. In case any provision in this Declaration or
in the Trust Securities Certificates 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 10.4. 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 CONFLICTS OF LAWS OF THE STATE OF DELAWARE OR
ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER,
<PAGE>
THAT THERE SHALL NOT BE APPLICABLE TO THE PARTIES HEREUNDER OR THIS DECLARATION
ANY PROVISION OF THE LAWS (COMMON OR STATUTORY) OF THE STATE OF DELAWARE
PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH
THE TERMS HEREOF (A) THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF
TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE
REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A
TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL
CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY,
(D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A
TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL,
(F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR
CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING,
STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G) THE
ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR LIMITATIONS
ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE LIMITATIONS OR
AUTHORITIES AND POWERS OF THE TRUSTEES HEREUNDER AS SET FORTH OR REFERENCED IN
THIS DECLARATION. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY
TO THE TRUST.
SECTION 10.5. Payments Due on Non-Business Day. If the date fixed for any
payment on any Trust Security shall be a day which is not a Business Day, then
such payment need not be made on such date but may be made on the next
succeeding day which is a Business Day (except as otherwise provided in Section
4.1(a) and Section 4.2(d)), with the same force and effect as though made on the
date fixed for such payment, and no interest shall accrue thereon for the period
after such date.
SECTION 10.6. Successors. This Declaration shall be binding upon and shall
inure to the benefit of any successor to the Depositor, the Trust or the
Relevant Trustee, including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that is
permitted under Article 8 of the Indenture and pursuant to which the assignee
agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
SECTION 10.7. Headings. The Article and Section headings are for
convenience only and shall not affect the construction of this Declaration
SECTION 10.8. Reports, Notices and Demands. Any report, notice, demand or
other communications which by any provision of this Declaration is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, first-class postage
prepaid, in the United States mail, hand delivery or facsimile transmission, in
each case, addressed, (a) in the case of a Holder of Preferred Securities, to
such Holder as such Holder's name and address may appear on the Securities
Register; and (b) in the case of the Holder of the Common Securities.
Any notice to Preferred Securityholders shall also be given to such
Owners as have, within two years preceding the giving of such notice, filed
their names and addresses with the Property
<PAGE>
Trustee for that purpose. Such notice, demand or other communication to or upon
a Securityholder shall be deemed to have been sufficiently given, or made, for
all purposes, upon hand delivery, mailing or transmission .
Any notice, demand or other communication which by any provision of
this Declaration is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee, to The Bank of New
York, 101 Barclay Street, New York, New York, 10286, Attention: Corporate Trust
Administration, (b) with respect to the Delaware Trustee, to The Bank of New
York (Delaware), 200 White Clay Center, Newark, Delaware 19711, with a copy of
any such notice to the Property Trustee at its address above, and (c) with
respect to the Administrative Trustees, to them at the address for notices to
the Depositor, marked "Attention: General Counsel". Such notice, demand or other
communication to or upon the Trust or the Property Trustee shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust or the Property Trustee.
SECTION 10.9. Agreement Not to Petition. Each of the Trustees and the
Depositor agrees for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
9, it shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.9, the Property Trustee
agrees, for the benefit of Securityholders, that, at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Declaration.
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.
(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 the trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Declaration by any of
the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Declaration modifies or excludes any provision
of the Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Declaration as so modified or to be
excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
<PAGE>
SECTION 10.11. ACCEPTANCE OF TERMS OF DECLARATION, GUARANTEE AND INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR FURTHER
MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE
SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS DECLARATION AND AGREEMENT TO
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND
SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS
THAT THE TERMS AND PROVISIONS OF THIS DECLARATION SHALL BE BINDING, OPERATIVE
AND EFFECTIVE AS THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
SECTION 10.12. 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.
ARTICLE 11
REGISTRATION RIGHTS
SECTION 11.1. Registration Rights. The Holders of the Preferred Securities,
the Debentures and the Guarantee and the shares of Common Stock of the Depositor
issuable upon conversion of the Debentures and/or the Preferred Securities
(collectively, the "Registrable Securities") are entitled to the benefits of a
Registration Rights Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration to
be duly executed as of the day and year first above written.
HVIDE MARINE INCORPORATED
as Depositor
By: /s/ J. ERIK HVIDE
Name: J. Erik Hvide
Title: Chief Executive Officer and President
THE BANK OF NEW YORK
as Property Trustee
By: /s/ MARY LA GUMINA
Name: Mary La Gumina
Title: Assistant Vice President
THE BANK OF NEW YORK (DELAWARE)
as Delaware Trustee
By: /s/ FREDERICK W. CLARK
Name: Frederick W. Clark
Title: Authorized Signatory
/s/ J. ERIK HVIDE
J. Erik Hvide,
as Administrative Trustee
/s/ JOHN H. BLANKLEY
John H. Blankley,
as Administrative Trustee
/s/ GENE DOUGLAS
Gene Douglas,
as Administrative Trustee
Exhibit 4.3
HVIDE MARINE INCORPORATED
to
THE BANK OF NEW YORK
as Indenture Trustee
INDENTURE
Dated as of June 27, 1997
6 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
DUE JUNE 15, 2012
<PAGE>
RECONCILIATION AND TIE
This reconciliation and tie between the Trust Indenture Act of 1939, as
amended (including cross-references to provisions of Section 310 to and
including 317 which, pursuant to Section 318(c) of the Trust Indenture Act of
1939, as amended by the Trust Reform Act of 1990, are a part of and govern the
Indenture whether or not physically contained therein) and the Indenture, dated
as of June 27, 1997.
<PAGE>
CONVERTIBLE SUBORDINATED INDENTURE
CONVERTIBLE SUBORDINATED INDENTURE, dated as of June 27, 1997 between
HVIDE MARINE INCORPORATED, a Florida corporation (hereinafter called the
"COMPANY") having its principal office at 2200 Eller Drive, Fort Lauderdale,
Florida 33316 and The Bank of New York, a New York banking corporation ("BNY"),
as Indenture Trustee (hereinafter called the "INDENTURE TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its 6 1/2% Convertible Subordinated
Debentures due June 15, 2012 (hereinafter called the "DEBENTURES") of
substantially the tenor hereinafter provided which evidence loans made to the
Company of the proceeds from the issuance by Hvide Capital Trust, a Delaware
statutory business trust (the "TRUST"), of preferred undivided beneficial
interests in the Trust (the "PREFERRED SECURITIES") and common undivided
beneficial interests in the Trust (the "COMMON SECURITIES"), and to provide the
terms and conditions upon which the Debentures are to be authenticated, issued
and delivered.
All things necessary to make the Debentures, when executed by the
Company and authenticated and delivered by the Trustee hereunder and duly issued
by the Company, the valid obligations of the Company, and to make this Indenture
a valid agreement of the Company, in accordance with their and its respective
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 covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Debentures, as follows:
ARTICLE 1.
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, and the term "generally accepted accounting
principles", with respect to any computation required
<PAGE>
or permitted hereunder shall mean such accounting principles which are
generally accepted at the date or time of such computation;
(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;
(e) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case
may be, of this Indenture;
(f)"or" is not exclusive;
(g) provisions apply to successive events and transactions;
and
(h) each reference herein to a rule or form of the Commission
shall mean such rule or form and any rule or form successor thereto, in
each case as amended from time to time.
"ACT", when used with respect to any Holder, has the meaning specified
in Section 1.4.
"ADDITIONAL INTEREST" means the interest, if any, that shall accrue on
any interest on the Debentures that is in arrears for more than one interest
payment period or not paid during any Extension Period, which in either case
shall accrue at the stated rate per annum specified or determined as specified
in such Debenture and compounded quarterly.
"ADDITIONAL SUMS" has the meaning specified in Section 10.7
"ADDITIONAL TAXES" means the sum of any additional taxes, duties and
other governmental charges to which the Trust has become subject from time to
time as a result of a Tax Event.
"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; provided, however, that an Affiliate of the
Company shall not be deemed to include the Trust to which Debentures have been
issued. 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.
"APPLICABLE PRICE" means (i) in the case of a Non-Stock Fundamental
Change in which the holders of the Class A Common Stock receive only cash, the
amount of cash received by the holder of one share of Class A Common Stock and
(ii) in the event of any other Non-Stock Fundamental Change or any Class A
Common Stock Fundamental Change, the average of the Closing Prices for the Class
A Common Stock during the ten Trading Days prior to and including the record
date for the determination of the holders of Class A Common Stock entitled to
receive such securities, cash, or other property in connection with such
Non-Stock Fundamental Change
<PAGE>
or Class A Common Stock Fundamental Change or, if there is no such record date,
the date upon which the holders of the Class A Common Stock shall have the right
to receive such securities, cash, or other property (such record date or
distribution date being referred to as the "ENTITLEMENT DATE"), in each case as
adjusted in good faith by the Company to appropriately reflect any of the events
referred to in Section 13.4.
"AUTHENTICATING AGENT" means any Person authorized by the Indenture
Trustee pursuant to Section 6.14 to act on behalf of the Indenture Trustee to
authenticate Debentures.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any committee thereof duly authorized to act hereunder.
"BOARD RESOLUTION" means a copy of the resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Indenture Trustee.
"BNY" has the meaning specified in the introductory paragraph of this
Indenture.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed or a day or which the Corporate Trust
Office of the Indenture Trustee, or the principal office of the Trustee under
the Declaration, is closed for business.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person's capital stock, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"CHANGE IN 1940 ACT LAW" has the meaning specified in the definition of
Investment Company Event.
"CLASS A COMMON STOCK" means Class A Common Stock, par value $0.001 per
share, of the Company.
"CLOSING PRICE" means, with respect to any shares of Capital Stock, on
any day the reported last sale price on such day or, in case no sale takes place
on such day, the average of the reported closing bid and asked prices in each
case on The Nasdaq National Market or, if the Capital Stock is not then traded
on The Nasdaq National Market, on the principal national securities exchange on
which such Capital 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 NASD member firm, selected by
the Indenture Trustee for that purpose.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time
<PAGE>
constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust indenture Act, then the body
performing such duties on such date.
"COMMON SECURITIES" has the meaning specified in the first recital of
this Indenture.
"COMMON STOCK" includes any stock of any class of any person 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 such person
and which is not subject to redemption by such person. However, subject to the
provisions of Sections 13.4 and 13.5, shares issuable on conversion of
Debentures shall include only shares of the class designated as Class A Common
Stock of the Company at the date of this Indenture or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or 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 all such classes
resulting from all such reclassifications.
"COMPANY" means the Person named as the "Company" in the introductory
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" and "COMPANY ORDER" means, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board,
its Vice Chairman, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Controller, its Secretary or an Assistant Secretary,
and delivered to the Indenture Trustee.
"CONVERSION AGENT" has the meaning specified in Section 13.2(a).
"CONVERSION DATE" has the meaning specified in Section 13.2(a).
"CONVERSION EXPIRATION DATE" has the meaning specified in Section 13.3.
"CONVERSION PRICE" has the meaning specified in Section 13.1.
"CORPORATE TRUST OFFICE" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered which office at the date hereof is located at 101 Barclay Street,
Floor 21 West, New York, New York 10286, Attention:
Corporate Trust Administration.
"CURRENT MARKET PRICE" means, with respect to Common Stock of the
Company, for any day the last reported sale price, regular way, on such day of
such Common Stock, or, if no sale takes place on such day, the average of the
reported closing bid and asked prices on such day, regular way, in either case
as reported by The Nasdaq National Market, or, if such Common
<PAGE>
Stock is not quoted on The Nasdaq National Market on such day, on the principal
quotation system on which such Common Stock may be listed or admitted to trading
or quoted, or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of such Common Stock in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or, if not so available in such manner, as
furnished by any NASD member firm selected from time to time by the Board of
Directors for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Directors.
"DEBENTURES" or "DEBENTURE" means any debt securities or debt security,
as the ease may be, authenticated and delivered under this Indenture.
"DEBT" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person, and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible for or liable, directly or indirectly,
as obligor or otherwise
"DECLARATION" means the Declaration of Trust for the Trust pursuant to
which the Preferred Securities and Common Securities were issued substantially
in the form attached hereto as Annex A, as amended by the form of Amended and
Restated Declaration of Trust substantially in the form attached hereto as Annex
B, as amended from time to time.
"DEFAULT" means any event that as, or after notice or passage of time,
or both, would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section 3.7.
"DEPOSITARY" means, with respect to the Debentures issuable or issued
in whole or in part in the form of one or more Global Debentures, the Person
designated as Depositary by the Company (or any successor thereto).
"DIRECT ACTION" has the meaning specified in Section 5.8.
"DOLLAR" means the currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.
"ENTITLEMENT DATE" has the meaning specified in the definition of
"Applicable Price".
<PAGE>
"EVENTS OF DEFAULT" has the meaning specified in Article 5.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXPIRATION TIME" has the meaning specified in Section 13.4(e).
"EXTENSION PERIOD" has the meaning specified in Section 3.11.
"FUNDAMENTAL CHANGE" means the occurrence of any Transaction or event
in connection with a plan pursuant to which all or substantially all of the
Class A Common Stock shall be exchanged for, converted into, acquired for, or
constitute solely the right to receive securities, cash, or other property
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, continuance, combination, reclassification,
recapitalization or otherwise), provided that, in the case of a plan involving
more than one such Transaction or event, for purposes of adjustment of the
Conversion Price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Class A Common Stock shall be exchanged for, converted
into, or acquired for or constitute solely the right to receive securities,
cash, or other property, but the adjustment shall be based upon consideration
that a holder of Class A Common Stock received in such Transaction or event as a
result of which more than 50% of the Class A Common Stock shall have been
exchanged for, converted into, or acquired for or constitute solely the right to
receive securities, cash, or other property.
"GLOBAL DEBENTURE" has the meaning specified in Section 3.15 and
complying with the form of Debenture prescribed in Section 2.4 evidencing all or
part of the Debentures, issued to the Depositary or its nominee, and registered
in the name of such Depositary or its nominee.
"GUARANTEE" means the guarantee by the Company of distributions on the
Preferred Securities of the Trust to the extent provided in the Guarantee
Agreement, substantially in the form attached hereto as Annex C, as amended from
time to time.
"HOLDER" means a Person in whose name a Debenture is registered in the
Securities Register.
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"INDENTURE TRUSTEE" means the Person named as the "Indenture Trustee"
in the introductory paragraph of this instrument until a successor Indenture
Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Indenture Trustee" shall mean such successor
Indenture Trustee and shall include each Person who is then an Indenture Trustee
hereunder if at any time there is more than one such Person.
<PAGE>
"INTEREST" with regard to the Debentures shall include quarterly
interest payments, interest or quarterly interest payments not paid on an
applicable Interest Payment Date, Liquidated Damages, if any, and Additional
Sums, if any.
"INTEREST PAYMENT DATE" means as to the Debentures the Stated Maturity
of an installment of interest on such Debentures.
"INTEREST RATE" means the rate of interest specified or determined as
specified in each Debenture and this Indenture as being the rate of interest
payable on such Debenture.
"INVESTMENT COMPANY EVENT" means, in respect of the Trust, the receipt
by the Trustee on behalf of the Trust of an Opinion of Counsel, rendered by a
law firm having a recognized national tax and securities practice (which Opinion
of Counsel shall not have been rescinded by such law firm), to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "CHANGE IN 1940 ACT LAW"),
that there is more than an insubstantial risk that the Trust is or will be
considered an "investment company" that is required to be registered under the
1940 Act, which Change in 1940 Act Law becomes effective on or after the date of
original issuance of the Preferred Securities of the Trust.
"JUNIOR SECURITIES" has the meaning specified in Section 12.15.
"JUNIOR SUBORDINATED PAYMENT" has the meaning specified in Section
12.2.
"LIQUIDATED DAMAGES" has the meaning specified in the form of reverse
of Debenture set forth in Section 2.3.
"MATURITY" when used with respect to the Debentures, means the date on
,which the principal of the Debentures become due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"1940 ACT" means the Investment Company Act of 1940, as amended and the
rules promulgated thereunder.
"NON BOOK-ENTRY PREFERRED SECURITIES" has the meaning specified in
Section 3.15.
"NON-STOCK FUNDAMENTAL CHANGE" means any Fundamental Change other than
a Class A Common Stock Fundamental Change.
"NOTICE OF CONVERSION" means the notice given by a holder of Preferred
Securities to the Conversion Agent directing the Conversion Agent to exchange
such Preferred Securities for Debentures and to convert such Debentures into
Class A Common Stock on behalf of such holder.
"NOTICE OF DEFAULT" has the meaning specified in Section 5.1(d).
<PAGE>
"OFFICERS' CERTIFICATE" means a certificate signed by (i) the Chairman,
the President, the Chief Executive Officer, the Chief Operating Officer or any
Vice President and by (ii) the Chief Financial Officer, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and delivered to the Indenture Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, the Trust, or the Indenture Trustee, but who may be an
employee thereof, and who shall be reasonably acceptable to the Indenture
Trustee; provided that any Opinion of Counsel delivered regarding the occurrence
of a Special Event shall not be rendered by an employee of the Company.
"OUTSTANDING" means, as of the date of determination, all Debentures
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures theretofore canceled by the Indenture Trustee
or delivered to the Indenture Trustee for cancellation;
(ii) Debentures for whose payment money in the necessary
amount has been theretofore irrevocably deposited with the Indenture
Trustee or any Paying Agent (other than the Company or any affiliate of
the Company) in trust for the Holders of such Debentures; provided
that, if such Debentures are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Debentures in substitution for or in lieu of which other
Debentures have been authenticated and delivered or which have been
paid pursuant to Section 3.6, or which have been converted into Class A
Common Stock pursuant to Section 13.1, unless proof satisfactory to the
Indenture Trustee is presented that any Debentures are held by Holders
in whose hands such Debentures are valid, binding and legal obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Debentures have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Debentures which the Indenture Trustee actually
knows to be so owned shall be so disregarded. Debentures so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture 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 the Debentures or any Affiliate of the Company or such
other obligor. Upon request of the Indenture Trustee, the Company shall furnish
to the Indenture Trustee promptly an Officers' Certificate listing and
identifying all Debentures, if any, known by the Company to be owned or held by
or for the account of the Company, or any other obligor on the Debentures or any
Affiliate of the Company or such obligor, and, subject to the provisions of
Section 6.1,
<PAGE>
the Indenture Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Debentures not listed therein are Outstanding for the purpose of any such
determination.
"PAYING AGENT" means the Indenture Trustee or any Person authorized by
the Company to pay the principal of (premium, if any) or interest on any
Debentures on behalf of the Company.
"PERSON" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or other entity.
"PREDECESSOR DEBENTURE" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.6 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"PREFERRED SECURITIES" has the meaning specified in the first recital
of this Indenture.
"PREFERRED STOCK", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Common Stock of such Person.
"PROCEDURES" has the meaning specified in Section 3.3.
"PROCEEDING" has the meaning specified in Section 12.2.
"PURCHASE AGREEMENT" means the Purchase Agreement dated June 23, 1997
by and among the Trust, the Company and the Purchasers.
"PURCHASED SHARES" has the meaning specified in Section 13.4(e).
"PURCHASERS" with respect to the Preferred Securities, means Donaldson,
Lufkin & Jenrette Securities Corporation, Howard, Weil, Labouisse, Friedrichs
Incorporated and Raymond James & Associates, Inc.
"PURCHASER STOCK PRICE" means, with respect to any Stock Fundamental
Change the average of the Closing Prices for the Common Stock received in such
Stock Fundamental Change for the ten consecutive Trading Days prior to and
including the Entitlement Date, as adjusted in good faith by the Company to
appropriately reflect any of the events referred to in Section 13.4.
"RECORD EXPIRATION DATE" has the meaning specified in Section 1.4.
"REDEMPTION DATE", when used with respect to any Debenture to be
redeemed, means
<PAGE>
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.
"REFERENCE DATE" has the meaning specified in Section 13.4(c).
"REFERENCE MARKET PRICE" initially means $15.08 (which is an amount
equal to 66 {2} OVERSM {3}% of the last reported sale price for the Class A
Common Stock on The Nasdaq National Market on June 23, 1997), and in the event
of any adjustment of the Conversion Price other than as a result of a Non-Stock
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 the
Debentures.
"REGULAR RECORD DATE" means for the interest payable on any Interest
Payment Date the fifteenth day next preceding such Interest Payment Date.
"RESPONSIBLE OFFICER" when used with respect to the Indenture Trustee
means any officer of the Indenture Trustee assigned by the Indenture Trustee
from time to time to administer its corporate trust matters, or any other
officer to whom such matters may be referred.
"RESTRICTED PREFERRED SECURITIES" means all Preferred Securities
required to bear any restricted securities legend pursuant to the Declaration.
"RESTRICTED SECURITIES" means all the Debentures required pursuant to
Section 2.6 to bear a Restricted Securities Legend.
"RESTRICTED SECURITIES LEGEND" has the meaning specified in Section
2.6.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR," have the respective
meanings specified in Section 3.5.
"SENIOR DEBT" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Company, whether incurred on or prior to the date of this Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Debentures or to other
Debt which is pari passu with, or subordinated to, the Debentures, provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Company which when incurred and, without respect to any election under Section
1111(b) of the Bankruptcy Code, was without recourse to the Company, (b) any
Debt of the Company to any of its Subsidiaries, (c) Debt to any employee of the
Company, (d) any liability for taxes, (e) Debt or other monetary obligations to
trade creditors created or assumed by the
<PAGE>
Company or any of its Subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services and (f) the
Debentures.
"SPECIAL EVENT" means a Tax Event or an Investment Company Event.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Indenture Trustee pursuant to Section 3.7.
"STATED MATURITY" when used with respect to the Debentures or any
installment of principal thereof or interest thereon means the date specified in
the Debentures or this Indenture as the fixed date on which the principal of the
Debentures or such installment of interest is due and payable.
"STOCK FUNDAMENTAL CHANGE" means any Fundamental Change in which more
than 50% of the value (as determined in good faith by the Board of Director in a
Board Resolution) of the consideration received by holders of Class A Common
Stock consists of Common Stock that for each of the ten consecutive Trading Days
prior to the Entitlement Date 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 Stock Fundamental Change if either (i) the Company
continues to exist after the occurrence of such Fundamental Change and the
outstanding Preferred Securities continue to exist as outstanding Preferred
Securities or (ii) not later than the occurrence of such Fundamental Change, the
outstanding Preferred Securities are converted into or exchanged for shares of
convertible Preferred Stock of an entity succeeding to the business of the
Company or a subsidiary thereof, which convertible Preferred Stock has powers,
preferences, and relative, participating, optional, or other rights, and
qualifications, limitations, and restrictions, substantially similar to those of
the Preferred Securities.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation
more than 50 percent of the outstanding shares of Voting Stock of which is
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more Subsidiaries
thereof or (ii) any general partnership, joint venture or similar entity, more
than 50 percent of the outstanding partnership or similar interests of which are
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person and (iii) any limited partnership of which such
Person or any Subsidiary of such Person is a general partner.
"TAX EVENT" means the receipt by the Trustee on behalf of the Trust of
an Opinion of Counsel, rendered by a law firm having a recognized national tax
and securities practice (which Opinion of Counsel shall not have been rescinded
by such law firm), to the effect that, as a result of any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after June 23, 1997, there is
more than an insubstantial risk in each case after such date that (i) the Trust
is, or will be within
<PAGE>
90 days of the date thereof, subject to United States Federal income tax with
respect to income received or accrued on the Debentures, (ii) interest payable
by the Company on the Debentures is not, or within 90 days of the date thereof,
will not be, deductible, in whole or in part, for United States Federal income
tax purposes or (iii) the Trust is, or will be within 90 days of the date
thereof, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"TRADING DAY" with respect to a securities exchange or automated
quotation system means a day on which such exchange or system is open for a full
day of trading.
"TRANSACTION" has the meaning specified in Section 13.5(a).
"TRUST" has the meaning specified in the first recital of this
Indenture.
"TRUSTEE" means, in respect of the Trust, the commercial bank or trust
company identified as the "Trustee" in the Declaration, solely in its capacity
as Trustee of the Trust under the Declaration and not in its individual
capacity, or its successor in interest in such capacity, or any successor
Trustee appointed as therein provided.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in effect or the date as of this
Indenture; 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 the Common Securities and Preferred Securities
"VICE PRESIDENT" when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
"VOTING STOCK" means, with respect to any person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or at the times that such class of Capital Stock has
voting power by reason of the happening of any contingency) to vote in the
election of members of the board of directors or comparable body of such Person.
SECTION 1.2. COMPLIANCE CERTIFICATE AND OPINIONS. Upon any application
or request by the Company to the Indenture Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Indenture Trustee
an Officers' Certificate stating that all conditions precedent (including
covenants, compliance with which constitutes a condition 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 (including covenants compliance with which
constitute a condition 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
<PAGE>
opinion need be furnished. Each such Officers' Certificate and Opinion of
Counsel shall comply with the requirements of the Trust Indenture Act.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.5) shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. FORMS OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or
<PAGE>
other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such
instrument or instruments is or are delivered to the Indenture Trustee,
and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "ACT" of the
Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Company and
any agent of the Indenture Trustee or the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by the certificate of any 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 Person acting
in other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority.
(c) The fact and date of the execution by any Person 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 Indenture
Trustee deems sufficient and in accordance with such reasonable rules
as the Indenture Trustee may determine.
(d) The ownership of Debentures shall be proved by the
Securities Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Debenture shall
bind every future Holder of the same Debenture and the Holder of every
Debenture issued upon the transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done or suffered to be done by
the Indenture Trustee or the Company in reliance thereon, whether or
not notation of such action is made upon such Debenture.
(f) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to take
any action under this Indenture by vote or consent; provided that the
Company may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next
paragraph. Except as otherwise provided herein, such record date shall
be the later of 30 days prior to the first solicitation of such consent
or vote or the date of the most recent list of Holders furnished to the
Indenture Trustee pursuant to Section 7.1 prior to such solicitation.
If a record date is fixed, those persons who were Holders at such
record date (or their duly designated proxies), and only those persons,
shall be entitled to take such action by vote or consent or to revoke
any vote or consent previously given, whether or not such persons
continue
<PAGE>
to be Holders after such record date; provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Record Expiration Date by Holders of the requisite principal amount of
Outstanding Debentures on such record date; and provided, further, that
for the purpose of determining whether Holders of the requisite
principal amount of such Debentures have taken such action, no
Debenture shall be deemed to have been Outstanding on such record date
unless it is also Outstanding on the date such action is to become
effective. Nothing in this paragraph shall prevent the Company from
setting a new record date for any action for which a record date has
previously been set pursuant to this paragraph (whereupon the record
date previously set shall automatically and with no action by any
Person be cancelled and of no effect), nor shall anything in this
paragraph be construed to render ineffective any action taken by
Holders of the requisite principal amount of Outstanding Debentures on
the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall
cause notice of such record date, the proposed action by Holders and
the applicable Record Expiration Date to be given to the Indenture
Trustee in writing and to each Holder of Debentures in the manner set
forth in Section 1.6.
The Indenture Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Debentures entitled
to join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 5.2, (iii) any
request to institute proceedings referred to in Section 5.7(b) or (iv)
any direction referred to in Section 5.12. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Debentures on
such record date, and no other Holders, shall be entitled to join in
such notice, declaration, request or direction, whether or not such
Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the
applicable Record Expiration Date by Holders of the requisite principal
amount of Outstanding Debentures on such record date; and provided,
further, that for the purpose of determining whether Holders of the
requisite principal amount of such Debentures have taken such action,
no Debenture shall be deemed to have been Outstanding on such record
date unless it is also Outstanding on the date such action is to become
effective. Nothing in this paragraph shall be construed to prevent the
Indenture Trustee from setting a new record date for any action
(whereupon the record date previously set shall automatically and
without any action by any Person be cancelled and of no effect), nor
shall anything in this paragraph be construed to render ineffective any
action taken by Holders of the requisite principal amount of
Outstanding Debentures on the date such action is taken. Promptly after
any record date is set pursuant to this Subsection, the Indenture
Trustee, at the Company's expense, shall cause notice of such record
date, the matter(s) to be submitted for potential action by Holders and
the applicable Record Expiration Date to be given to the Company in
writing and to each Holder of Debentures in the manner set forth in
Section 1.5.
(g) With respect to any record date set pursuant to this
Section, the party hereto that sets such record date may designate any
day as the "RECORD EXPIRATION DATE" and from time to time may change
the Record Expiration Date to any earlier or later day, provided that
no such change shall be effective unless notice of the proposed new
Record Expiration Date is given to the other party hereto in writing,
and to each Holder of
<PAGE>
Debentures in the manner set forth in Section 1.5, on or before the
existing Record Expiration Date. If a Record Expiration Date is not
designated with respect to any record date set pursuant to this
Section, the party hereto that set such record date shall be deemed to
have initially designated the 180th day after such record date as the
Record Expiration Date with respect thereto, subject to its right to
change the Record Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Record Expiration Date shall be later
than the 180th day after the applicable record date.
(h) Without limiting the foregoing, a Holder entitled
hereunder to give or take any such action with regard to any particular
Debenture may do so with regard to all or any part of the principal
amount of such Debenture or by one or more duly appointed agents each
of which may do so pursuant to such appointment with regard to all or
any different part of such principal amount.
SECTION 1.5. NOTICES, ETC. TO INDENTURE 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 the following:
(a) the Indenture 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 Indenture Trustee at its
Corporate Trust Office; or
(b) the Company by the Indenture Trustee or by any Holder
shall be sufficient for every purpose (except as otherwise provided in
Section 5.1 hereof) hereunder if in writing and mailed, first class,
postage prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument or
at any other address previously furnished in writing to the Indenture
Trustee by the Company.
SECTION 1.6. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed, first
class postage prepaid, to each Holder affected by such event, at the address of
such Holder as it appears in the Securities Register on the date such notice is
mailed, which shall be not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Indenture Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver. In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the
Indenture Trustee shall constitute a sufficient notification for every purpose
hereunder.
SECTION 1.7. CONFLICT WITH TRUST INDENTURE ACT. If any provision of
this Indenture
<PAGE>
limits, qualifies or conflicts with a provision of the Trust Indenture Act that
is required under such act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the Trust Indenture Act that may be so modified or excluded,
the former provision shall be deemed to apply.
SECTION 1.8. 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 1.9. 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 1.10. SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Debentures shall be invalid, illegal or unenforceable, the
validity legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties thereto, any Paying Agent and their successors and assigns and the
Holders of the Debentures, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 1.12. GOVERNING LAW. This Indenture and the Debentures shall
be governed by and construed in accordance with the laws of the State of New
York without regard to its principles of conflicts of laws.
SECTION 1.13. NON-BUSINESS DAYS. In any case where any Interest Payment
Date, Redemption Date, or Stated Maturity of any Debenture shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or the
Debentures) payment of interest or principal 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 any Interest Payment
Date is in the next succeeding calendar year, then such payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on the Interest Payment Date or Redemption Date or at the
Stated Maturity; provided that no interest shall accrue for the period from and
after such Interest Payment Date or Redemption Date or Stated Maturity.
SECTION 1.14. NO RECOURSE AGAINST OTHERS. A director, officer,
employee, stockholder or incorporator, as such, of the Company shall not have
any liability for any obligations of the Company under the Debentures or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Debenture waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Debentures.
SECTION 1.15. DUPLICATE ORIGINALS. All parties may sign any number
of copies or counterparts of this Indenture. Each signed copy or counterpart
shall be an original, but all of them together shall represent the same
agreement
<PAGE>
ARTICLE 2.
DEBENTURE FORM
SECTION 2.1. FORMS GENERALLY. The Debentures and the Indenture
Trustee's certificate of authentication shall be in substantially the forms set
forth in this Article with such appropriate insertions, omissions and other
violations 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 applicable tax
laws or the rules of any securities exchange or as may, consistently herewith,
be determined by the officers executing such Debentures, as evidenced by their
execution of the Debentures.
The definitive Debentures shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods, if required by any
securities exchange on which the Debentures may be listed, on a steel engraved
border or steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Debentures may be
listed, all as determined by the officers executing such Debentures, as
evidenced by their execution of such Debentures.
SECTION 2.2. FORM OF FACE OF DEBENTURE.
HVIDE MARINE INCORPORATED
6 1/2% CONVERTIBLE SUBORDINATED DEBENTURE DUE JUNE 15, 2012, $_________
NO. CUSIP 448515 AA 4
Hvide Marine Incorporated, a corporation organized and existing under
the laws of Florida (hereinafter called the "COMPANY," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _____________________, or registered
assigns, the principal sum of _______________________ on June 15, 2012 and to
pay interest plus Additional Interest, Additional Sums and Liquidated Damages,
if any, on said principal sum from June 27, 1997 or from the most recent
Interest Payment Date on which interest has been paid or duly provided for,
quarterly until the principal hereof is paid or duly provided for or made
available for payment subject to deferral as set forth herein in arrears on
January 1, April 1, July 1 and October 1 of each year, (each such date, an
"INTEREST PAYMENT DATE") commencing October 1, 1997 at the rate of six and
one-half (6 1/2%) per annum, until the principal hereof shall have become due
and payable, and thereafter such interest shall be payable on demand.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee referred to on the reverse hereof by manual signature,
this Debenture shall not be entitled to any
<PAGE>
benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
HVIDE MARINE INCORPORATED
[Seal] By:
Title:
Attest:
Title:
SECTION 2.3. FORM OF REVERSE OF DEBENTURE. This Debenture is one of a
duly authorized issue of Debentures of the Company (herein called the
"DEBENTURES") limited to the aggregate principal amount of $118,556,700, issued
and to be issued under an Indenture, dated as of June 27, 1997 (herein called
the "INDENTURE"), between the Company and The Bank of New York, as Indenture
Trustee (herein called the "INDENTURE TRUSTEE," which term includes any
successor Indenture Trustee under the Indenture), to which the Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Indenture Trustee, the Company and the Holders of the Debentures, and of the
terms upon which the Debentures are, and are to be, authenticated and delivered.
All terms used in this Debenture that are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. For periods of less than three
months, interest shall be computed on the actual number of elapsed days over a
month of 30 days. In the event that any date on which interest is payable on
this Debenture is not a Business Day, then a payment of the interest 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) with the
same force and effect as if made on the date the payment was originally payable,
except that if any Interest Payment Date is in the next succeeding calendar
year, then such payment shall be made on the immediately preceeding Business
Day. A "BUSINESS DAY" shall mean any day other than a Saturday or a Sunday or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed or a day on which the
Corporate Trust Office of the Indenture Trustee, or the principal office of the
Trustee under the Declaration is closed for business. The interest installment
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Debenture (or one or more Predecessor Debentures, as defined in the
Indenture is registered at the close of business on the Regular Record Date for
such interest installment, which shall be the date which is the fifteenth day
preceding such Interest Payment Date. Any such interest installment not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Debenture (or one or more Predecessor Debentures) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Indenture
<PAGE>
Trustee, notice whereof shall be given to Holders of Debentures not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture.
So long as no Event of Default under the Indenture has occurred and is
continuing, the Company shall have the right under the Indenture, at any time
and from time to time, to defer the payment of interest (including any
Additional Sums or Liquidated Damages) on the Debentures for up to 20
consecutive quarters with respect to each deferral period (each such deferral
period an "EXTENSION PERIOD"), during which periods the Company shall have the
right not to make payments of interest on any Interest Payment Date, at the end
of which the Company shall pay all interest then accrued and unpaid (together
with Additional Interest, Additional Sums and Liquidated Damages, if any,
thereon to the extent permitted by applicable law); provided, that during any
such Extension Period, the Company shall not, and shall not permit any
Subsidiary to, (a) declare or pay any dividends or distributions on or redeem,
purchase, acquire or make a liquidation payment with respect to, any shares of
the Company's Capital Stock or (b) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of the Company that
rank pari passu with or junior to the Debentures (other than (i) any dividend,
redemption, liquidation, interest, principal or guarantee payment by the Company
where the payment is made by way of securities (including Capital Stock) that
rank pari passu with or junior to the securities on which such dividend,
redemption, interest, principal or guarantee payment is being made, (ii)
payments under the Guarantee, (iii) purchases of Class A Common Stock related to
the issuance of Class A Common Stock under any of the Company's benefit plans
for its directors, officers or employees, (iv) as a result of a reclassification
of the Company's Capital Stock or the exchange or conversion of one series or
class of the Company's Capital Stock for another series or class of the
Company's Capital Stock and (v) the purchase of fractional interests in shares
of the Company's Capital Stock pursuant to the conversion or exchange provisions
of such Capital Stock or the security being converted or exchanged). Prior to
the termination of any such Extension Period the Company may further extend the
interest payment period, provided that no Extension Period shall exceed 20
consecutive quarters or extend beyond the Stated Maturity of this Debenture.
Upon the termination of any such Extension Period and upon the payment of all
accrued and unpaid interest, any Additional Interest, any Additional Sums, any
Liquidated Damages and other amounts then due, the Company may elect to begin a
new Extension Period, subject to the above requirements. No interest including
Additional Interest, Additional Sums and Liquidated Damages, if any, shall be
due and payable during an Extension Period except at the end thereof. The
Company shall give the Indenture Trustee and the commercial bank or trust
company identified as trustee under the Declaration of Trust (the "DECLARATION")
forming Hvide Capital Trust (the "Trust") notice of its election to begin any
Extension Period at least one Business Day prior to the earlier of (i) the
record date for the date the distributions on the Preferred Securities (or if no
Preferred Securities are outstanding, for the date interest on the Debentures)
would have been payable except for the election to begin such Extension Period
and (ii) the date the trustee of the Trust is (or if no Preferred Securities are
outstanding, the Indenture Trustee is) required to give notice to The Nasdaq
National Market or other applicable self-regulatory organizations or to holders
of such Preferred Securities (or, if no Preferred Securities
<PAGE>
are outstanding, to the holders of such Debentures) of such election.
Payment of the principal of (and premium, if any) and interest on this
Debenture will be made [Insert, if a global security is issued: to the
Depositary Trust Company or its nominee] [Insert if securities in definitive
form are issued: at the Corporate Trust Office of the Indenture Trustee in the
City of New York or at the office or agency of the Paying Agent or Paying Agents
as the Company may designate maintained for that purpose in the United States],
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts provided,
however, that at the option of the Company payment of interest may be made (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Securities Register or (ii) by wire transfer in immediately
available funds at such place and to such account as may be designated by the
Person entitled thereto as specified in the Securities Register, provided that
proper transfer instructions have been received by the Regular Record Date.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt (as defined in the Indenture), and this
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Debenture, by accepting the same, (i) agrees to and
shall be bound by such provisions, (ii) authorizes and directs the Indenture
Trustee on his behalf to take such actions as may be necessary or appropriate to
effectuate the subordination so provided and (iii) appoints the Indenture
Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof,
by his acceptance hereof, waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Debt, whether now outstanding or hereafter incurred, and waives reliance
by each such holder upon said provisions.
At any time on or after July 2, 2000, the Company may, at its option,
subject to the terms and conditions of Article 11 of the Indenture, redeem this
Debenture in whole at any time or in part from time to time, at the Redemption
Prices set forth in Section 11.7 of the Indenture.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If a Special Event shall occur and be continuing, this Debenture shall
be exchangeable for Preferred Securities in accordance with Section 11.8 of the
Indenture or, in certain circumstances, redeemable by the Company in accordance
with Section 11.7 of the Indenture.
Subject to the terms and conditions set forth in Article 13 of the
Indenture, this Debenture is convertible, at the option of the Holder hereof,
into shares of Class A Common Stock (and/or such other cash, securities or
property as then provided for by the Indenture). In order to maintain the
eligibility of the Company to operate vessels in the U.S. domestic trade, 75% of
the outstanding Capital Stock and voting power of the Company is required to be
held by U.S. citizens. As a result of this requirement, any non-citizen holder
of the Preferred Securities or the Debentures will, to the extent the conversion
thereof into shares of the Company's Class A
<PAGE>
Common Stock would cause more than 25% of the Company's outstanding Common Stock
to be held by non-citizens, be unable to convert such Preferred Securities or
Debentures into shares of Class A Common Stock and will be required to sell its
Preferred Securities or Debentures to U.S. citizens in order to realize the
economic benefits, if any, of conversion.
If an Event of Default shall occur and be continuing, the principal of
the Debentures may be declared due and payable in the manner, with the effect
and subject to the conditions provided in the Indenture.
As provided in and subject to the provisions of the Indenture, if an
Event of Default occurs and is continuing, then and in every such case the
Indenture Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Indenture Trustee if given by Holders), provided that, if upon an Event of
Default, the Indenture Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Debentures fail to declare the principal of all the
Debentures to be immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of the Preferred Securities then outstanding shall
have such right by a notice in writing to the Company and the Indenture Trustee;
and upon any such declaration such principal amount (or specified amount) of and
the accrued interest (including any Additional Interest, Additional Sums and any
Liquidated Damages) on all the Debentures shall become immediately due and
payable, provided that the payment of principal and interest (including any
Additional Interest, Additional Sums and any Liquidated Damages) on such
Debentures shall remain subordinated to the extent provided in Article 12 of the
Indenture.
The Indenture contains provisions for satisfaction, discharge and
defeasance of the entire indebtedness of this Debenture upon compliance by the
Company with certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company an the rights of the Holders of the Debentures to be affected under the
Indenture at any time by the Company and the Indenture Trustee with the consent
of the Holders of a majority in principal amount of the Debentures. In addition,
without the consent of any Holder of a Debenture, the Indenture and the
Debentures may be amended and supplemented to cure any ambiguity or
inconsistency, make other changes which will not adversely affect in any
material aspect the rights of the Holders or certain other matters specified in
the Indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Debentures at the time
Outstanding, on behalf of the Holders of all Debentures, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences, and, should the Holders of the
Debentures fail to annul and rescind such declaration, the holders of a majority
in liquidation amount of the Preferred Securities then outstanding shall have
the right. Any such consent or waiver shall be conclusive and binding upon the
Holder of this Debenture and upon all future Holders of this Debenture and of
any Debenture issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or wavier is
made upon this Debenture.
<PAGE>
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest (including Additional Interest, if any, Additional Sums, if any, and
Liquidated Damages, if any) on this Debenture at the times, place and rate, and
in the coin or currency, herein prescribed.
The holders of the Preferred Securities, the Debentures, the Guarantee
and the shares of Class A Common Stock of the Company issuable upon conversion
of the Preferred Securities and Debentures (collectively, the "REGISTRABLE
SECURITIES") are entitled to the benefits of a Registration Rights Agreement,
dated as of June 27, 1997, among the Trust, the Company and the Purchasers (the
"REGISTRATION RIGHTS AGREEMENT"). Pursuant to the Registration Rights Agreement,
the Company and the Trust have agreed for the benefit of the holders of
Registrable Securities that (i) the Company and the Trust will, at the Company's
cost, within 90 days after the date of issuance of the Registrable Securities,
file a shelf registration statement (the "SHELF REGISTRATION STATEMENT ") with
the Commission with respect to the resales of the Registrable Securities, (ii)
the Company will use its best efforts to cause such Shelf Registration Statement
to be declared effective by the Commission within 150 days after the date of
issuance of the Registrable Securities and (iii) the Company will use its best
efforts to maintain such Shelf Registration Statement continuously effective
under the Securities Act until the second anniversary of the date of issuance of
the Registrable Securities or such earlier date as is provided in the
Registration Rights Agreement (the "EFFECTIVENESS PERIOD"). The Company will be
permitted to suspend the use of the prospectus (which is a part of the Shelf
Registration Statement) in connection with sales of Registrable Securities by
holders during certain periods of time under certain circumstances relating to
pending corporate developments relating to the Company and public filings with
the Commission and similar events.
If (i) on or prior to 90 days following the date of original issuance
of the Registrable Securities, a Shelf Registration Statement has not been filed
with the Commission, or (ii) on or prior to the 150th day following such
original issuance of the Registrable Securities, such Shelf Registration
Statement is not declared effective (each such event a "REGISTRATION DEFAULT"),
additional interest ("LIQUIDATED DAMAGES") will accrue on the Debentures from
and including the day following such Registration Default until such time as
such Shelf Registration Statement is filed or such shelf Registration Statement
is declared effective, as the case may be. Liquidated Damages will be paid
quarterly in arrears (subject to the Company's ability to defer payment of
Liquidated Damages during any Extension Period), with the first quarterly
payment due on the first Interest Payment Date following the date on which such
Liquidated Damages begin to accrue, and will accrue at a rate per annum equal to
an additional 0.25% of the principal amount to and including the 90th day
following such Registration Default and 0.50% thereof from and after the 91st
day following such Registration Default. In the event that during the
Effectiveness Period the Shelf Registration Statement ceases to be effective, or
the Company suspends the use of the prospectus which is a part thereof, for more
than 90 days, whether or not consecutive, during any 12-month period then the
interest rate borne by the Debentures will increase by an additional 0.50% per
annum from the 91st day of the applicable 12-month period such Shelf
Registration Statement ceases to be effective or the Company suspends the use of
the prospectus which is a part thereof, as the case may be, until the earlier of
such time as (i) the Shelf Registration Statement again becomes effective, (ii)
the use of the related prospectuses ceases to
<PAGE>
be suspended or (iii) the Effectiveness Period expires.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Securities
Register, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Indenture Trustee and any agent of the Company or the
Indenture Trustee may treat the Person in whose name this Debenture is
registered as the owner hereof for all purposes, whether or not this Debenture
be overdue, and neither the Company, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Debentures 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, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States Federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
A director, officer, employee, stockholder or incorporator of the
Company shall not have any liability for any obligations of the Company under
this Debenture or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting this
Debenture waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of this Debenture.
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES THEREOF.
ASSIGNMENT FORM
To assign this Debenture, fill in the form
below:
(I) or (we) assign and transfer this Debenture to
<PAGE>
(Insert assignee's social security or tax identification number)
(Print or type assignee's name, address and zip code)
and irrevocable appoint ______________________ agent to transfer this
Debenture on the books of the Company. The agent may substitute another to act
for him.
Your Signature:
(Sign exactly as your name appears on the other side of this
Debenture)
Date: __________________
Signature Guarantee:*
[Include the following if the Debenture bears a Restricted Securities Legend:
In connection with any transfer of any of the Debentures evidenced by this
certificate, the undersigned confirms that such Debentures are being:
CHECK ONE BOX BELOW
(1) [__] exchanged for the undersigned's own account without transfer; or
(2) [__] transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933;
(3) [__] transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933;
(4) [__] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933;
(5) [__] transferred pursuant to an effective Registration Statement under
the Securities Act of 1933.
Unless one of the boxes is checked, the Indenture Trustee will refuse to
register any of the Debentures evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if box
(3) or (4) is checked, the Indenture Trustee may require, prior to registering
any such transfer of the Securities such legal opinions, certifications and
other information as the Company has reasonably requested in writing and
directed the Indenture Trustee to require confirmation that such transfer is
being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities
<PAGE>
Act of 1933 as amended (the "SECURITIES ACT"), such as the exemption provided by
Rule 144 under the Securities Act; provided, further, that after the date that a
shelf Registration Statement under the Securities Act has been filed and so long
as such shelf Registration Statement continues to be effective, the Indenture
Trustee may only permit transfers for which box (5) has been checked.
Signature
Signature Guarantee:*
Signature must be guaranteed
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED]
The undersigned represents and warrants that undersigned is
purchasing this Debenture for its own account or an account with respect to
which undersigned exercises sole investment discretion and that it and any such
account is a "QUALIFIED INSTITUTIONAL BUYER" within the meaning of Rule 144A
under the Securities Act, or an "ACCREDITED INVESTOR" within the meaning of Rule
501(a) (1), (2), (3) or (7) under the Securities Act, and is aware that the sale
to undersigned is being made in reliance on Rule 144A and acknowledges that
undersigned has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that undersigned is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
Notice: To Be executed by an
executive officer]
- --------
* Signature must be guaranteed by an institution which is a member of one
of the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) in such other guarantee programs
acceptable to the Indenture Trustee.
<PAGE>
NOTICE OF CONVERSION
To: Hvide Marine Incorporated
The undersigned owner of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or the portion below designated, into
Class A Common Stock of Hvide Marine Incorporated in accordance with the terms
of the Indenture referred to in this 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.
Any Holder, upon the exercise of undersigned's conversion rights in
accordance with the terms of the Indenture and the Debenture, agrees to be bound
by the terms of the Registration Rights Agreement relating to the Class A Common
Stock issuable upon conversion of the Debenture.
Date:_______________________
in whole ___
in part ___ Portions of 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:*
- --------
* Signature must be guaranteed by an institution which is a member of one
of the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) in such other guarantee programs
acceptable to the Indenture Trustee.
<PAGE>
SECTION 2.4. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL DEBENTURE. Any
Global Debenture issued hereunder shall, in addition to the provisions contained
in Sections 2.2 and 2.3 bear a legend in substantially the following form:
"This Debenture is a Global 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 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 may not be transferred except 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."
SECTION 2.5. FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF
AUTHENTICATION. The form of Indenture Trustee's Certificate of Authentication
shall be as follows:**
"This is one of the Debentures designated therein referred to in the
within mentioned Indenture.
THE BANK OF NEW YORK,
as Indenture Trustee
By:
Authorized Signatory
Dated:
- ----------------------------
SECTION 2.6. INITIAL ISSUANCE TO TRUSTEE. The Debentures initially
issued to the Trustee of the Trust shall be in the form of one or more
individual certificates in definitive, fully registered form without
distribution coupons and shall bear the following legend (the "RESTRICTED
SECURITIES LEGEND") unless the Company determines otherwise in accordance with
applicable law:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER
<PAGE>
THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT U.S.
PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY, ISSUABLE
UPON CONVERSION OR EXCHANGE OF SUCH SECURITY EXCEPT (A) TO HVIDE MARINE
INCORPORATED OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE PREFERRED SECURITIES OR THE
DEBENTURES, AS THE CASE MAY BE, (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK,
THE TRANSFER AGENT FOR THE COMMON STOCK), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE FOR THE PREFERRED SECURITIES OR THE DEBENTURES, AS THE CASE MAY BE (OR,
IF THIS CERTIFICTE EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE
COMMON STOCK AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE FOR THE PREFERRED SECURITIES OR THE DEBENTURES,
AS THE CASE MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
HVIDE MARINE INCORPORATED OR THE TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND
WILL
<PAGE>
BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
ARTICLE 3.
THE DEBENTURES
SECTION 3.1. TITLE AND AMOUNT OF DEBENTURES. The aggregate principal
amount at Stated Maturity of Debentures which may be authenticated and delivered
under this Indenture is $118,556,700 except for Debentures authenticated and
delivered upon registration of, transfer of, or in exchange for, or in lieu of,
other Debentures pursuant to Sections 3.4, 3.5, 3.6, 3.15, 9.6, 11.8 or 11.9.
The Debentures shall be known and designated as "6 1/2% Convertible Subordinated
Debentures due June 15, 2012." Their Maturity shall be June 15, 2012 and they
shall bear interest as provided in the form of Debenture and as herein provided.
SECTION 3.2. DENOMINATIONS. The Debentures shall be in registered
form without coupons and shall be issuable in denominations of $50 and any
integral multiple thereof.
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The
Debentures shall be executed on behalf of the Company by its President or one of
its Executive Vice Presidents under its corporate seal reproduced or impressed
thereon and attested by its Secretary. The signature of any of these officers on
the Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures. Upon the execution and
delivery of this Indenture, or from time to time thereafter, Debentures may be
executed by the Company and delivered to the Indenture Trustee for
authentication, and the Indenture Trustee shall thereupon authenticate and make
available for delivery said Securities to or upon Company Order without any
further action by the Company. Debentures may be authenticated on original
issuance from time to time and delivered pursuant to such procedures acceptable
to the Indenture Trustee ("PROCEDURES") as may be specified from time to time by
Company Order. Procedures may authorize authentication and delivery pursuant to
oral instructions of the Company or a duly authorized agent, which instructions
shall be promptly confirmed in writing.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized officers, and such certificate upon any Debenture shall be conclusive
evidence, and the only evidence, that such Debenture has been duly authenticated
and delivered hereunder.
<PAGE>
SECTION 3.4. TEMPORARY DEBENTURES. Pending the preparation of
definitive Debentures, the Company may execute, and upon Company Order the
Indenture Trustee shall authenticate and deliver, temporary Debentures which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Debentures in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Debentures may
determine, as evidenced by their execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at the office
or agency of the Company designated for the purpose without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Debentures,
the Company shall execute and the Indenture Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Debentures of
authorized denominations. Until so exchanged, the temporary Debentures shall in
all respects be entitled to the same benefits under this Indenture as definitive
Debentures.
SECTION 3.5. REGISTRATION, TRANSFER AND EXCHANGE. The Company shall
cause to be kept at the Corporate Trust Office of the Indenture Trustee a
register in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Debentures and of transfers of
Debentures (such register is herein sometimes referred to as the "SECURITIES
REGISTER"). The Trustee is hereby appointed "SECURITIES REGISTRAR" for the
purpose of the registering Debentures and transfers of Debentures as herein
provided.
Upon surrender for registration of transfer of any Debenture at the
office or agency of the Company designated pursuant to Section 10.2 for that
purpose, the Company shall execute, and the Indenture Trustee shall authenticate
and make available for delivery, in the name of the designated transferee or
transferees, one or more new Debentures of any authorized denominations, of a
like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the Indenture Trustee shall authenticate and make available
for delivery, the Debentures which the Holder making the exchange is entitled to
receive.
All Debentures issued upon any 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 transfer or exchange.
Every Debenture presented or surrendered for transfer or exchange shall
(if so required by the Company or the Securities Registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
<PAGE>
No service charge shall be made to a Holder for any 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 transfer or exchange of Debentures, other than exchanges pursuant to
Sections 3.4, 3.15, 9.6, 11.8 and 11.9.
Notwithstanding any of the foregoing, the Global Debenture shall be
exchangeable pursuant to this Section 3.5 for Debentures registered in the names
of Persons other than the Depositary for such Debenture or its nominee only if
(a) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Debenture and the Company shall not have
appointed a successor depositary within 90 days after such notice, or if at any
time such Depositary ceases to be a clearing agency registered under the
Securities Exchange Act, (b) the Company executes and delivers to the Indenture
Trustee a Company Order that the Global debenture shall be so exchangeable or
(c) there shall have occurred and be continuing an Event of Default. The Global
Debenture shall be exchangeable for Debentures registered in such names as such
Depositary shall direct.
Any Holder of a Global Debenture shall, by acceptance of such Global
Debenture, agree that transfers of beneficial interests in such Global Debenture
may be effected only through a book entry system maintained by the Holder of
such Global Debenture (or its agent), and that ownership of a beneficial
interest in the Debentures represented thereby shall be required to be reflected
in book entry form. Transfers of a Global Debenture shall be limited to
transfers in whole and not in part, to the Depositary, its successors, and their
respective nominees. Interests of beneficial owners in a Global Debenture may be
transferred in accordance with the rules and procedures of the Depositary (or
its successors).
Neither the Company, the Securities Registrar nor the Indenture Trustee
shall be required, pursuant to the provisions of this Section, (a) to issue,
transfer or exchange any Debenture during a period beginning at the opening of
business 15 days before the day of selection for redemption of Debentures
pursuant to Article 11 and ending at the close of business on the day of mailing
of notice of redemption or (b) to transfer or exchange any Debenture so selected
for redemption in whole or in part, except, in the case of any Debenture to be
redeemed in part, any portion thereof not to be redeemed.
The Debentures may not be transferred except in compliance with the
Restricted Securities Legend unless otherwise determined by the Company in
accordance with applicable law. Upon any distribution of the Debentures to the
holders of the Preferred Securities in accordance with the Declaration, the
Company and the Indenture Trustee shall enter into a supplemental indenture
pursuant to Section 9.1(i) to provide for transfer procedures and restrictions
with respect to the Debentures substantially similar to those contained in the
Declaration to the extent applicable in the circumstances existing at the time
of such distribution.
SECTION 3.6. MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES. If any
mutilated Debenture is surrendered to the Indenture Trustee, the Company shall
execute and the Indenture Trustee shall authenticate and make available for
delivery in exchange therefor a new Debenture and bearing a number not
contemporaneously outstanding.
<PAGE>
If there shall be delivered to the Company and to the Indenture Trustee
(a) evidence to their satisfaction of the destruction, loss or theft of any
Debenture, and (b) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of actual notice to the Company or
the Indenture Trustee that such Debenture has been acquired by a bona fide
purchaser, the Company shall execute and upon a Company Order its request the
Indenture Trustee shall authenticate and make available for delivery, in lieu of
any such destroyed, lost or stolen Debenture, a new Debenture bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture 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.
Upon the issuance of any new Debenture under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Indenture Trustee) connected
therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures 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.
SECTION 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Interest
(including Additional Interest, if any, Additional Sums, if any, and Liquidated
Damages, if any) on any 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 payment,
except that interest payable on the Maturity of the Debentures shall be paid to
the Person to whom principal is paid.
Any interest (including Additional Interest, if any, Additional Sums,
if any, and Liquidated Damages, if any) on the Debentures which is payable, but
is not timely paid or duly provided for, on an Interest Payment Date (herein
called "DEFAULTED INTEREST"), shall forthwith cease to be payable to the
registered Holder on the Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessors Debentures) are registered at the close of
business on a Special Record Date for the payment of such
<PAGE>
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Indenture Trustee in writing of the amount of
Defaulted Interest proposed to be paid on the Debentures and the date
of the proposed payment, and at the same time the Company shall deposit
with the Indenture Trustee an amount of money equal to the aggregate
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Indenture 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 Indenture
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 Indenture Trustee of the notice
of the proposed payment. The Indenture 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 the Debentures
at the address of such Holder as it appears in the Securities 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 mailed as aforesaid, such Defaulted Interest shall
be paid to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on such Special Record Date and shall no longer be payable
prsuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed and, upon
such notice as may be required by such exchange (or by the Indenture
Trustee if the Debentures are not listed), if, after notice given by
the Company to the Indenture Trustee of the proposed payment pursuant
to this Clause, such payment shall be deemed practicable by the
Indenture Trustee.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon 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.
SECTION 3.8. PERSONS DEEMED OWNERS. Prior to due presentment of a
Debenture for registration of transfer, the Company, the Indenture Trustee, the
Paying Agent and any agent of the Company or the Indenture Trustee or the Paying
Agent may treat the Person in whose name any Debenture is registered as the
owner of such Debenture for the purpose of receiving payment of principal of
(and premium, if any) and (subject to Section 3.7) interest (including
Additional Interest, if any, Additional Sums, if any, and Liquidated Damages, if
any) on such Debenture and for all other purposes whatsoever, whether or not
such Debenture be overdue, and neither the Company, the Indenture Trustee nor
any agent of the Company or the Indenture Trustee shall be affected by notice to
the contrary.
SECTION 3.9. CANCELLATION. All Debentures surrendered for payment,
redemption, conversion transfer or exchange shall, if surrendered to any Person
other than the Indenture
<PAGE>
Trustee, be delivered to the Indenture Trustee, and any such purpose shall be
promptly canceled by it. The Company may at any time deliver or cause to be
delivered to the Indenture Trustee for cancellation any Debentures previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Debentures so delivered shall be promptly canceled by
the Indenture Trustee. No Debentures shall be authenticated in lieu of or in
exchange for any Debentures canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Debentures shall be returned
to the Company by the Indenture Trustee.
SECTION 3.10. COMPUTATION OF INTEREST. Interest on the Debentures shall
be computed on the basis of a 360-day year of twelve 30-day months. For periods
of less than a month, interest shall be computed on the actual number of elapsed
days over a month of 30 days.
SECTION 3.11. DEFERRALS OF INTEREST PAYMENT DATES. So long as no Event
of Default has occurred and is continuing, the Company shall have the right, at
any time and from time to time to defer the payment of interest (including any
Additional Sums and Liquidated Damages) on the Debentures for up to 20
consecutive quarters with respect to each deferral period (each such deferral
period an "EXTENSION PERIOD"), during which periods the Company shall have the
right to not make payments of interest (including any Liquidated Damages) on any
Interest Payment Date, and at the end of such Extension Period the Company shall
pay all interest then accrued and unpaid thereon (together with Additional
Interest thereon, if any, at the rate specified for the Debentures to the extent
permitted by applicable law), provided that during any such Extension Period,
the Company shall not, and shall not permit any Subsidiary to, (a) declare or
pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any shares of the Company's Capital Stock
or (b) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees of indebtedness
for money borrowed) of the Company that rank pari passu with or junior to the
Debentures (other than (i) any dividend, redemption, liquidation, interest,
principal or guarantee payment by the Company where the payment is made by way
of securities (including Capital Stock) that rank pari passu with or junior to
the securities on which such dividend, redemption. interest, principal or
guarantee payment is being made, (ii) payments under the Guarantee, (iii)
purchases of Class A Common Stock related to the issuance of Class A Common
Stock under any of the Company's benefit plans for its directors, officers or
employees, (iv) as a result of a reclassification of the Company's Capital Stock
or the exchange or conversion of one series or class of the Company's Capital
Stock for another series or class of the Company's capital stock and (v) the
purchase of fractional interests in shares of the Company's Capital Stock
pursuant to the conversion or exchange provisions of such Capital Stock or the
security being converted or exchanged). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
provided that no such Extension Period shall exceed 20 consecutive quarters or
extend beyond the Stated Maturity of the Debentures. Upon termination of any
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest, any Additional Sums, any Liquidated Damages and any other
amounts then due, the Company may select a new Extension Period, subject to the
above requirements. No interest including Additional Interest, Additional Sums
and Liquidated Damages, if any, shall be due and payable during an Extension
Period, except at the end thereof. The Company shall give the Indenture Trustee,
the Trustee and other trustees of the Trust notice
<PAGE>
of its election to begin any Extension Period at least one Business Day prior to
the earlier of (i) the record date for the date the distributions on the
Preferred Securities of the Trust (or if no, Preferred Securities are
outstanding, for the date interest on the Debentures) would have been payable
except for the election to begin such Extension Period and (ii) the date the
Trustee (or, if no Preferred Securities are outstanding, the Indenture Trustee)
is required to give notice to The Nasdaq National Market or other applicable
self-regulatory organization or to holders of such Preferred Securities (or, if
no Preferred Securities are outstanding, to the holders of such Debentures) of
such record date, but in any event not less than one Business Day prior to such
record date. Such notice shall specify the period selected.
The Indenture Trustee shall promptly give notice of the Company's
election to begin an Extension Period to the Holders of the Outstanding
Debentures.
SECTION 3.12. RIGHT OF SET-OFF. Notwithstanding anything to the
contrary in this Indenture, the Company shall have the right to set-off any
payment it is otherwise required to make thereunder in respect of the Debenture
to the extent the Company has theretofore made, or is concurrently on the date
of such payment making, a payment relating to the Debentures under the
Guarantee.
SECTION 3.13. AGREED TAX TREATMENT. Each Debenture issued hereunder
shall provide that the Company and, by its acceptance of a Debenture or a
beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Debenture agree that for United States Federal,
state and local tax purposes it is intended that such Debenture constitute
indebtedness.
SECTION 3.14. CUSIP NUMBERS. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Indenture
Trustee shall use such "CUSIP" number 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 number 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.
SECTION 3.15. GLOBAL SECURITY.
(a) In connection with distribution of Debentures to holders
of the Preferred Securities in connection with the involuntary or
voluntary dissolution, winding up or liquidation of the Trust as a
result of the occurrence of a Special Event or otherwise,
(i) the Debentures in certificated form may be
presented to the Indenture Trustee by the Trustee in exchange
for one or more global certificates (each a "GLOBAL
DEBENTURE") in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Debentures to be
registered in the name of the Depositary or its nominee, and
delivered by the Indenture Trustee to the Depositary or its
custodian, for crediting to the accounts of its participants
pursuant to the procedures of the Depositary. The Company upon
any such
<PAGE>
presentation shall execute a Global Debenture or Global
Debentures in such aggregate principal amount and deliver the
same to the Indenture Trustee for authentication and delivery
in accordance with this Indenture; and
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Debentures in certificated
form may be presented to the Indenture Trustee by the Trustee
and any Preferred Security certificate which represents
Preferred Securities other than Preferred Securities held by
the Depositary or its nominee ("NON BOOK-ENTRY PREFERRED
SECURITIES") will be deemed to represent beneficial interests
in Debentures presented to the Indenture Trustee by the
Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred
Securities until such Preferred Security certificates are
presented to the Securities Registrar for transfer or
reissuance at which time such Non-Book Entry Preferred
Security certificates will be canceled and a Debenture,
registered in the name of the holder of the Preferred Security
certificate or the transferee of the holder of such Preferred
Security certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of
the Preferred Security certificate canceled, will be executed
by the Company and delivered to the Indenture Trustee for
authentication and delivery in accordance with this Indenture.
On issue of such Debentures, Debentures with an equivalent
aggregate principal amount that were presented by the Trustee
to the Indenture Trustee will be deemed to have been canceled.
(b) A Global Debenture may be transferred, in whole but not in
part, only to another nominee of the Depositary, or to a nominee of
such successor Depositary.
(c) If (i) the Depositary notifies the Company that it is
unwilling or unable to continue as a depositary for such Global
Debenture and no successor depositary shall have been appointed within
90 days by the Company, (ii) the Depositary, at any time, ceases to be
a "clearing agency" registered under the Exchange Act at a time when
the Depositary is required to be so registered to act as such
Depositary and no successor Depositary shall have been appointed within
90 days by the Company, (iii) the Company, in its sole discretion,
determines that such Global Debenture shall be so exchangeable or (iv)
there shall have occurred an Event of Default with respect to such
Debentures, as the case may be, the Company will execute, and, subject
to Article 3 of this Indenture, the Indenture Trustee, upon written
notice from the Company and receipt of a Company Order, will
authenticate and deliver the Debentures in definitive registered form
without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. In addition, upon an Event of
Default or if the Company may at any time determine that the Debenture
shall no longer be represented by a Global Debenture, in such event the
Company will execute, and subject to Section 3.5 of this Indenture, the
Indenture Trustee, upon receipt of an Officers' Certificate evidencing
such determination by the Company and a Company Order, will
authenticate and make available for delivery the Debentures in
definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture in
<PAGE>
exchange for such Global Debenture. Upon the exchange of the Global
Debenture for such Debentures in definitive registered form without
coupons, in authorized denominations, the Global Debenture shall be
canceled by the Indenture Trustee. Such Debentures in definitive
registered form issued in exchange for the Global Debenture shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Indenture Trustee. The
Indenture Trustee shall deliver such Debentures to the Depositary for
delivery to the Persons in whose names such Debentures are so
registered. Any such Debentures issued pursuant to this Section 3.15
shall include the Restricted Securities Legend, except that such legend
may be removed from such Debenture as provided in the next sentence.
The Restricted Securities Legend may be removed from a Debenture if
there is delivered to the Company such satisfactory evidence, which may
include an opinion of independent counsel as reasonably may be
requested by the Company to confirm that neither such legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers of such Debenture will not violate the registration and
prospectus delivery requirements of the Securities Act of 1933, as
amended and the rules and regulations promulgated thereunder; provided
that the Indenture Trustee shall not be required to determine (but may
rely on a determination made by the Company with respect to) the
sufficiency of any such evidence. Upon provision of such evidence, the
Indenture Trustee shall authenticate and deliver in exchange for such
Debenture, a Debenture or Debentures (representing the same aggregate
principal amount at Stated Maturity of the Debenture being exchanged)
without such legend. If the Restricted Securities Legend has been
removed from the Debenture, as provided above, no other Debenture
issued in exchange for all or any part of such Debenture shall bear
such legend unless the Company has reasonable cause to believe that
such other Debenture represents a "restricted security" within the
meaning of Rule 144 and instructs the Indenture Trustee in writing to
cause a legend to appear thereon.
ARTICLE 4.
SATISFACTION AND DISCHARGE
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE. This indenture
shall cease to be of further effect (except as to (i) any surviving rights of
transfer, substitution and exchange of Debentures, (ii) rights hereunder of
Holders to receive payments of principal of (and premium, if any) and interest
(including Additional Interest, Additional Sums and Liquidated Damages, if any)
on the Debentures and other rights, duties and obligations of the Holders as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Indenture Trustee, and (iii) the rights and obligations of the Indenture Trustee
hereunder), and the Indenture Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(i) all Debentures theretofore authenticated and
delivered (other than (i) Debentures which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 3.6 and (ii) Debentures for whose
payment
<PAGE>
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 Indenture Trustee for
cancellation; or
(ii) all such Debentures not theretofore
delivered to the Indenture Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their
Stated Maturity within one year of the date of
deposit or are to be called for redemption within one
year under irrevocable arrangements satisfactory to
the Indenture Trustee for the giving of notice of
redemption by the Company to the Indenture Trustee in
the name, and at the expense, of the Company, and the
Company has irrevocably deposited or caused to be
deposited with the Indenture Trustee as trust funds
in trust for such purpose an amount in the currency
or currencies in which the Debentures are payable
sufficient (without regard to investment of such
amount deposited) to pay and discharge the entire
indebtedness on the Debentures not theretofore
delivered to the Indenture Trustee for cancellation,
for principal (and premium, if any) and interest
(including any Additional Interest, Additional Sums
and Liquidated Damages) to the date of such deposit
or to the Stated Maturity; or
(C) have been redeemed or tendered for
conversion;
(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 Indenture 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, (i)
the obligations of the Company to the Indenture Trustee under Section 6.7 and
the obligations of the Company to any Authenticating Agent under Section 6.14,
(ii) the conversion provisions contained in Article 13 and the redemption
provisions of Article 11 prior to the Redemption Date or Maturity Date, and
(iii) if money shall have been deposited with the Indenture Trustee pursuant to
subclause (ii) of clause (a) of this Section, the obligations of the Indenture
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 deposited with the Indenture
Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in
accordance with the provisions of the Debentures and this Indenture, to the
payment, either directly or through any Paying Agent (including the
<PAGE>
Company acting as its own Paying Agent) as the Indenture Trustee may determine,
to the Persons entitled thereto, of the principal (and premium, if any) and
interest (including Additional Interest, Additional Sums and Liquidated Damages,
if any) for whose payment such money or obligations have been deposited with or
received by the Indenture Trustee; provided, however, such moneys need not be
segregated from other funds except to the extent required by law. If the
Indenture Trustee or Paying Agent is unable to apply any money in accordance
with Section 4.1 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 4.1 until such time as the Indenture
Trustee or Paying Agent is permitted to apply all such money in accordance with
the first sentence of this Section 4.2; provided, however, that if the Company
has made any payment of interest on or principal of any Debenture because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Debentures to receive such payment from the assets held
by the Indenture Trustee or Paying Agent.
ARTICLE 5.
REMEDIES
SECTION 5.1. EVENTS OF DEFAULT. "EVENT OF DEFAULT", wherever used
herein with respect to the Debentures, 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):
(a) default in the payment of any interest upon the
Debentures, including any Additional Interest, Additional Sums and any
Liquidated Damages in respect thereof, when it becomes due and payable,
and continuance of such default for a period of 30 days (subject to the
deferral of any due date in the case of an Extension Period); or
(b) default in the payment of the principal of (or premium, if
any, on) the Debentures when due whether at Maturity, upon redemption,
by declaration or otherwise; or
(c) failure by the Company to issue the Class A Common Stock
upon an appropriate election by the Holder or Holders of the Debentures
to convert the Debentures into shares of Class A Common Stock;
(d) failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Company contained in the Debentures or
contained in this Indenture and continuance of such failure for a
period of 90 days after the date on which written notice of such
failure, requiring the same to be remedied and stating that such notice
is a "NOTICE OF DEFAULT" hereunder, shall have been given to the
Company by the Indenture Trustee, or to the Company and the Indenture
Trustee by a Holder or Holders of at least 25% in aggregate principal
amount of the Debentures at the time Outstanding or the Holder or
Holders of at least
<PAGE>
25% in aggregate liquidation preference of the Preferred Securities at
the time outstanding;
(e) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under United States bankruptcy laws, as
now or hereafter constituted, or any other applicable federal, state or
foreign bankruptcy, insolvency or other similar law or (ii) a decree or
order adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of, or in respect of, or in respect of, the
Company under United States bankruptcy laws, as now or hereafter
constituted, or any other applicable federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of the Property or
assets of the Company, or ordering the winding-up or liquidation of the
affairs of the Company, 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) (i) the commencement by the Company of a voluntary case or
proceeding under United States bankruptcy laws, as now or hereafter
constituted, or any other applicable federal, state or foreign
bankruptcy, insolvency or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent; or (ii) the
consent by the Company to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under
United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal, state or foreign bankruptcy insolvency, or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company; or (iii) the filing
by the Company of a petition or answer or consent seeking
reorganization or relief under United States bankruptcy laws, as now or
hereafter constituted, or any other applicable federal, state or
foreign bankruptcy, insolvency or other similar law; or (iv) the
consent by the Company to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or of any substantial part of the Property or assets of the
Company, or the making by the Company of an assignment for the benefit
of creditors; or (v) the admission by the Company in writing of its
inability to pay its debts generally as they become due; or (vi) the
taking of corporate action by the Company in furtherance of any such
action; or
(g) the dissolution, winding up or termination of the Trust,
except in connection with the distribution of Debentures to the Holders
of Preferred Securities in liquidation of the Trust upon the redemption
of all the outstanding Preferred Securities and upon certain mergers,
consolidations or amalgamations permitted by Section 9.5 of the
Declaration.
SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default (other than an Event of Default specified in Section 5.1(e) or
(f)) occurs and is continuing, then and in every such case the Indenture Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debentures may declare the principal amount
<PAGE>
of all the Debentures to be due and payable immediately, by a notice in writing
to the Company (and to the Indenture Trustee if given by Holders), provided
that, if upon an Event of Default, the Indenture Trustee or the Holders of not
less than 25% in aggregate principal amount of the Outstanding Debentures fail
to declare the principal of all the Debentures to be immediately due and
payable, the holders of at least 25% in aggregate liquidation amount of the
Preferred Securities then outstanding shall have such right by a notice in
writing to the Company and the Indenture Trustee, and upon any such declaration
such principal amount (including premium, if any) of and the accrued interest
(including any Additional Interest, Additions Sums and Liquidated Damages) on
all the Debentures shall become immediately due and payable, provided that the
payment of principal (including premium, if any) and interest (including any
Additional Interest, Additional Sums and Liquidated Damages) on the Debentures
shall remain subordinated to the extent provided in Article 12. If an Event of
Default specified in Section 5.1(e) or (f) occurs, the principal amount of,
premium, if any, on and any accrued interest (including any Additional Interest,
Additional Sums and Liquidated Damages) on all of the Debentures then
Outstanding shall ipso facto become immediately due and payable without any
declaration or other Act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Debentures, by written notice to the Company and the Indenture
Trustee may rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the
Indenture Trustee a sum sufficient to pay
(A) all overdue installments of interest
(including any Additional Interest, Additional Sums
and Liquidated Damages) on the Debentures;
(B) the principal of (and premium, if any,
on) the Debentures which have become due otherwise
than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures;
(C) to the extent that payment of such
interest is lawful, interest (including any
Additional Interest and Liquidated Damages) upon
overdue installments of interest at the rate borne by
the Debentures;
(D) all sums paid or advanced by the
Indenture Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of
the Indenture Trustee, its agents and counsel; and
(ii) all Events of Default with respect to
Debentures, other than the non-payment of the principal of the
Debentures which has become due solely by such acceleration,
have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
<PAGE>
If the holders of a majority in aggregate principal amount of the Outstanding
Debentures fail to rescind and annul such declaration and its consequences, the
holders of a majority in aggregate liquidation amount of the Preferred
Securities then outstanding shall have such right.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. The Company covenants that if:
(a) default is made in the payment of any installment of
interest (including any Additional Interest, Additional Sums and
Liquidated Damages) on the Debentures when such interest becomes due
and payable and such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of (and
premium, if any, on) the Debentures whether at the Maturity thereof,
upon redemption, by declaration or otherwise,
the Company will, upon demand of the Indenture Trustee, pay to it, for the
benefit of the Holders of the Debentures, the whole amount then due and payable
on the Debentures for principal (and premium, if any) and interest (including
any Additional Interest, Additional Sums and Liquidated Damages), including, to
the extent that payment of such interest shall be lawful, interest on any
overdue principal (and premium, if any) and on any overdue installments of
interest (including any Additional Interest, Additional Sums and Liquidated
Damages) at the rate borne by the Debentures, and, in addition thereto, all
amounts owing the Indenture Trustee under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Indenture 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, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Debentures
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 the
Debentures, wherever situated.
If an Event of Default occurs and is continuing, the Indenture Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders of the Debentures by such appropriate judicial proceedings as the
Indenture Trustee shall deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
If an Event of Default occurs and shall be continuing as to the
Debentures, the Trustee will have the right to declare the principal of
(premium, if any, on) and interest (including any Additional Interest,
Additional Sums or Liquidated Damages) and any other amounts payable under the
Indenture to be forthwith due and payable and to enforce the right as a creditor
with respect to the Debentures.
<PAGE>
SECTION 5.4 INDENTURE 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 or
the property of the Company or of such other obligor or their creditors:
(a) the Indenture Trustee (irrespective of whether the
principal of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand on the Company for the
payment of overdue principal (and premium, if any) or interest
(including any Additional Interest, Additional Sums and Liquidated
Damages)) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file such prove a claim for the whole amount
of principal (and premium, if any) and interest (including any
Additional Interest, Additional Sums and Liquidated Damages)
owing and unpaid in respect to the Debentures and to file such
other papers or documents as may be necessary or advisable and
to take any and all actions as are authorized under the Trust
Indenture Act in order to have the claims of the Holders, the
Indenture Trustee and any predecessor to the Indenture Trustee
under Section 6.7 allowed in any such judicial proceedings;
and
(ii) in particular, the Indenture Trustee shall be
authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same in accordance with Section 5.6; and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the
Indenture Trustee for distribution in accordance with Section 5.6, and
in the event that the Indenture Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Indenture Trustee
any amount due to it and any predecessor Indenture Trustee under
Section 6.7.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any Holder thereof, or to authorize the Indenture
Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Indenture Trustee may, on behalf of the Holders,
vote for the election of an Indenture Trustee in bankruptcy or similar official
and be a member of a creditors' or other similar committee.
SECTION 5.5 INDENTURE TRUSTEE MAY ENFORCE CLAIM WITHOUT POSSESSION OF
DEBENTURES. All rights of action and claims under this Indenture or the
Debentures may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Debentures or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Indenture Trustee
shall be brought in its own name as a trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of all the amounts
owing the Indenture Trustee and any predecessor Indenture Trustee under Section
6.7, its agents and
<PAGE>
counsel, be for the ratable benefit of the Holders of the Debentures in respect
of which such judgment has been recovered.
SECTION 5.6 APPLICATION OF MONEY COLLECTED. Any money or property
collected or to be applied by the Indenture Trustee with respect to the
Debentures pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Indenture Trustee and, in case of the
distribution of such money or property on account of principal (or premium, if
any) or interest (including any Additional Interest, Additional Sums and
Liquidated Damages), upon presentation of the Debentures 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 Indenture Trustee and any
predecessor Indenture Trustee under Section 6.7,
SECOND: To the payment of the amounts then due and unpaid upon the
Debentures for principal (and premium, if any) and interest (including any
Additional Interest, Additional Sums and Liquidated Damages), 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 the Debentures for principal (and premium, if any) and interest
(including any Additional Interest, Additional Sums and Liquidated Damages),
respectively; and
THIRD: The balance, if any, to the Company or other Person or Persons
entitled thereto.
SECTION 5.7 LIMITATION ON SUITS. No Holder of the Debentures, including
a holder of Preferred Securities acting to enforce the rights of the Trustee as
a Holder of the Debentures pursuant to Section 6.8 of the Declaration, shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or for the appointment of a receiver, assignee, Indenture
Trustee, liquidator, sequestrator (or other similar official) or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) if the Trust is not the sole holder of the Outstanding Debentures,
the Holders of not less than 25% in principal amount of the Outstanding
Debentures shall have made written request to the Indenture Trustee to institute
proceedings in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(d) the Indenture 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 Indenture
<PAGE>
Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Debentures;
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
Holders of the Debentures, 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 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 Debenture shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium, if any) and (subject to
Section 3.7) interest (including any Additional Interest, Additional Sums and
Liquidated Damages) on such Debenture on the Maturity or to convert such
Debenture in accordance with Article 13 and to institute suit for the
enforcement of any such payment and right to convert, and such right shall not
be impaired without the consent of such Holder. For so long as any Preferred
Securities remain Outstanding, to the fullest extent permitted by law and
subject to the terms of this Indenture and the Declaration, upon an Event by
Default specified in Sections 5.1(a) or 5.1(b), any holder of Preferred
Securities shall have the right to institute a proceeding directly against the
Company for enforcement of payment to such holder of the principal amount of or
interest on Debentures having a principal amount equal to the liquidation
preference of the Preferred Securities of such holder (a "DIRECT ACTION").
Notwithstanding any payment made to such holder of Preferred Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal of or interest on the Debentures held by the Trust or the
Trustee. In connection with any such Direct Action, the rights of the Company
will be subrogated to the rights of any holder of the Preferred Securities to
the extent of any payment made by the Company to such holder of Preferred
Securities as a result of such Direct Action. Except as set forth in this
Article, the other holders of Preferred Securities shall have no right to
exercise directly any other rights or remedy available to the Holders of or in
respect of, the Debentures.
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Indenture
Trustee or to such Holder, then and in every such case the Company, the
Indenture Trustee and the Holder shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture 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 in Section 3.6, no right or remedy herein conferred upon or reserved to
the Indenture Trustee or to the Holders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the
<PAGE>
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
Indenture Trustee or of any Holder of the Debentures 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 Indenture
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Indenture Trustee or by the Holders, as the case
may be.
SECTION 5.12 CONTROL BY HOLDERS. The Holders of a majority in principal
amount of the Outstanding Debentures shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Indenture Trustee or exercising any trust or power conferred on the Indenture
Trustee, with respect to the Debentures, provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Indenture Trustee
shall have the right to decline to follow such direction if the Indenture
Trustee in good faith shall, by a Responsible Officer or Officers of the
Indenture Trustee, determine that the proceeding so directed would be unjustly
prejudicial to the Holders not joining in any such direction or would involve
the Indenture Trustee in personal liability.
SECTION 5.13 WAIVER OF PAST DEFAULTS. Subject to Section 9.2 hereof,
the Holders of not less than a majority in principal amount of the Outstanding
Debentures may on behalf of the Holders of all the Debentures waive any past
default hereunder with respect to Debentures and its consequences, except a
default:
(a) in the payment of the principal of (or premium, if any, on) or
interest (including any Additional Interest, Additional Sums and Liquidated
Damages) on the Debentures (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Indenture Trustee),
or
(b) in respect of a covenant or provision hereof which under Article 9
cannot be modified or amended without the consent of the Holder of each
Outstanding Debenture; provided, however, that if the Debentures are held by the
Trust or a Indenture Trustee of the Trust, such waiver shall not be effective
until the holders of a majority in liquidation amount of Trust Securities shall
have consented to such waiver; provided, further, that if the consent of the
Holder of each Outstanding Debenture affected thereby is required, such waiver
shall not be effective until each holder of the Trust Securities affected
thereby shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising
<PAGE>
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. If the Holders of a majority in aggregate
principal amount of the Outstanding Debentures fail to waive such Event of
Default, the Holders of a majority in aggregate liquidation amount of the
outstanding Preferred Securities shall have such right. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
SECTION 5.14 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Debenture 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 Indenture Trustee for any action taken or omitted by it as Indenture
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 Indenture 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, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium, if any) or interest (including any Additional Interest, Additional
Sums and Liquidated Damages) on the Debentures on or after the Maturity of the
Debentures or to convert a Debenture in accordance with Article 13.
SECTION 5.15 WAIVER OF USURY, 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 usury, 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 Indenture Trustee, but will suffer and permit the
execution of every such Power as though no such law had been enacted.
ARTICLE 6.
THE INDENTURE TRUSTEE
SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and
<PAGE>
conforming to the requirements of this Indenture, but in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Indenture Trustee, the
Indenture Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, 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 own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct except as follows:
(i) this Subsection shall not be construed to limit the
effect of Subsection (a) or (b) of this Section;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture 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 Holders pursuant to Section 5.12
relating to the time, method and place of conducting any proceeding for
any remedy available to the Indenture Trustee, or exercising any trust
or power conferred upon the Indenture Trustee, under this Indenture.
(d) No provision of this Indenture shall require the Indenture 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 there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Indenture Trustee shall be subject to the provisions
of this Section.
SECTION 6.2 NOTICE OF DEFAULTS. Within 90 days after actual knowledge
by a Responsible Officer of the Indenture Trustee of the occurrence of any
default hereunder, the Indenture Trustee shall transmit by mail to all Holders
of Debentures, as their names and addresses appear in the Securities Register,
notice of such Default hereunder known to the Indenture Trustee, unless such
Default shall have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest, Additional Sums and Liquidated
Damages) on any Debenture, the Indenture Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible
<PAGE>
Officers of the Indenture Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of Debentures; and provided,
further, that, except in the case of any default of the character specified in
Section 5.1(d), no such notice to Holders of the Debentures shall be given until
at least 30 days after the occurrence thereof.
SECTION 6.3 CERTAIN RIGHTS OF INDENTURE TRUSTEE. Subject to the
provisions of Section 6.1:
(a) the Indenture 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 or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Indenture
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate and an Opinion of
Counsel;
(d) the Indenture 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 Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Indenture 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 Indenture Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Indenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
(g) the Indenture 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,
indenture, Debenture or other paper or document, but the Indenture Trustee in
its discretion may make such inquiry or investigation into such facts or matters
as it way see fit, and, if the Indenture Trustee shall determine to make such
inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
<PAGE>
(h) the Indenture 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 Indenture Trustee shall not be responsible for any
misconduct or negligence on any part of any agent or attorney appointed with due
care by it hereunder
SECTION 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES. The
recitals contained herein and in the Debentures, except the Indenture Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Indenture Trustee assumes no responsibility for their correctness. The
Indenture Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Debentures. The Indenture Trustee shall not be
accountable for the use or application by the Company of the Debentures or the
proceeds thereof.
SECTION 6.5 MAY HOLD DEBENTURES. The Indenture Trustee, any Paying
Agent, any Securities Registrar, any Authenticating Agent or any other agent of
the Company, in its individual or any other capacity, may become the owner or
pledgee of Debentures and, subject to Sections 6.8 and 6.13, may otherwise deal
with the Company with the same rights it would have if it were not Indenture
Trustee, Paying Agent, Securities Registrar, Authenticating Agent or such other
agent.
SECTION 6.6 MONEY HELD IN TRUST. Money held by the Indenture Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Indenture Trustee shall be under no liability of interest
on any money received by it hereunder except as otherwise agreed with the
Company.
SECTION 6.7 COMPENSATION AND REIMBURSEMENT. The Company agrees as
follows:
(a) to pay to the Indenture Trustee from time to time such compensation
for all services rendered by it hereunder in such amounts as the Company and the
Indenture Trustee shall agree from time to time (which compensation shall not be
limited by any provision of law in regard to the compensation of a Indenture
Trustee of an express trust);
(b) to reimburse the Indenture Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Indenture Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursements of its agents and counsel); and
(c) to indemnify the Indenture Trustee for, and to hold it harmless
against, any loss, liability or expense (including the reasonable compensation
and the expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this Indenture or the performance of its duties 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. This indemnification shall survive the termination of this
Agreement.
<PAGE>
To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Indenture Trustee shall have a lien prior
to the Debentures on all money or property held or collected by the Indenture
Trustee except assets held in trust to pay principal and premium, if any, or
interest on particular Debentures pursuant to Section 4.1(a)(ii)(B), or pursuant
to any redemption pursuant to Article 11 hereof if monies have been deposited
for such redemption and notice has been given and the Redemption Date has
passed. Such lien shall survive the satisfaction and discharge of this
Indenture.
When the Indenture Trustee incurs expenses or renders services after an
Event of Default specified in Section 5.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Code or a successor statute.
SECTION 6.8 DISQUALIFICATION; CONFLICTING INTERESTS. The Indenture
Trustee shall be subject to the provisions of Section 310(b) of the Trust
Indenture Act. Nothing herein shall prevent the Indenture Trustee from filing
with the Commission the application referred to in the second to last paragraph
of Section 310(b) of the Trust Indenture Act. The Declaration and the Guarantee
shall be deemed to be specifically described in this Indenture for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
SECTION 6.9 CORPORATE INDENTURE TRUSTEE REQUIRED; ELIGIBILITY. There
shall at all times be a Indenture Trustee hereunder which shall be as follows:
(a) a corporation organized and doing business under the laws of the
United States of America or of any State, Territory or the District of Columbia,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority, or
(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Indenture Trustee
pursuant to a rule, regulation or order of the Commission, authorized under such
laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political subdivision
thereof substantially equivalent to supervision or examination applicable to
United States institutional Indenture Trustees,
in either case having a combined capital and surplus of at least $100,000,000,
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
to the purposes of this Section, 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. If at any time the
Indenture Trustee shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article. Neither the Company nor any Person
directly or indirectly controlling, controlled by or under common control with
the Company shall serve as Indenture Trustee hereunder.
<PAGE>
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Indenture
Trustee under Section 6.11
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Indenture Trustee shall not have been delivered to the Indenture Trustee, with a
copy for the Company, within 30 days after the giving of such notice of
resignation, the resigning Indenture Trustee may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by Act of the
Holders of a majority in principal amount at Stated Maturity of the Outstanding
Debentures, delivered to the Indenture Trustee and to the Company.
(d) If at any time:
(i) the Indenture Trustee shall fail to comply with Section
6.8 after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Debenture for at least six months, or
(ii) the Indenture Trustee shall cease to be eligible under
Section 6.9 and shall fail to resign after written request therefor by
the Company or by any such Holder, or
(iii) the Indenture Trustee shall become incapable of acting
or shall be adjudged as bankrupt or insolvent or a receiver of the
Indenture Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Indenture Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (A) the Company by Board Resolution may remove the
Indenture Trustee, or (B) subject to Section 5.14, any Holder who has been a
bona fide Holder of a Debenture for at least six months may, on behalf of
himself and all other similarly situated Holders, petition any court of
competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Indenture
Trustee for any cause with respect to the Debentures, the Company, by a Board
Resolution, shall promptly appoint a successor Indenture Trustee. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Indenture Trustee with respect to the Debentures shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Debentures delivered to the Company and the retiring Indenture
Trustee, the successor Indenture Trustee so appointed shall, forthwith upon its
acceptance of such appointment become the successor Indenture Trustee and
supersede the successor Indenture Trustee appointed by the Company. If no
successor Indenture Trustee shall have been so appointed by the Company or the
Holders and accepted
<PAGE>
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Debenture for at least six months may, subject to Section 5.14,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Indenture Trustee and each appointment of a successor Indenture Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of the Debentures as their name and addresses appear in the
Securities Register. Each notice shall include the name of the successor
Indenture Trustee and the address of its Corporate Trust Office.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Indenture
Trustee, every such successor Indenture Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Indenture Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee, but, on the request of the Company or the Successor Indenture Trustee,
such retiring Indenture Trustee shall, upon payment of any amounts then due
under Section 6.7, execute and deliver an instrument transferring to such
successor Indenture Trustee all the rights, powers and trusts of the retiring
Indenture Trustee and shall duly assign, transfer and deliver to such successor
Indenture Trustee all property and money held by such retiring Indenture Trustee
hereunder, subject however to its lien, if any, provided for in Section 6.7.
(b) Upon request of any such successor Indenture Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Indenture Trustee all rights, power and trusts
referred to in paragraph (a) of this Section.
(c) No successor Indenture Trustee shall accept its appointment unless
at the time of such acceptance such successor Indenture Trustee shall be
qualified and eligible under this Article.
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Indenture 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 Indenture Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Indenture Trustee, shall be the successor of
the Indenture Trustee hereunder, provided that 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
Indenture Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Indenture Trustee may adopt such
authentication and deliver the Debentures so authenticated, and in case any
Debentures shall not have been authenticated, any successor to the Indenture
Trustee may authenticate such Debentures either in the name of any predecessor
<PAGE>
Indenture Trustee or in the name of such successor Indenture Trustee, and in all
cases the certificate of authentication shall have the full force which it is
provided anywhere in the Debentures or in this Indenture that the certificate of
the Indenture Trustee shall have.
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and,
when the Indenture Trustee shall be or become a creditor of the Company (or any
other obligor upon the Debentures), the Indenture 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 6.14 APPOINTMENT OF AUTHENTICATING AGENT. The Indenture Trustee
may appoint an Authenticating Agent or Agents with respect to the Debentures
which shall be authorized to act on behalf of the Indenture Trustee to
authenticate the Debentures issued upon exchange, registration of transfer or
partial redemption thereof, and Debentures 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 Indenture Trustee hereunder. Wherever
reference is made in this Indenture to the authentication and delivery of
Debentures by the Indenture Trustee or the Indenture Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Indenture Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, or of any State, Territory or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $100,000,000 and subject to supervision or
examination by Federal or State authority. 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 all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided that 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 Indenture Trustee or the
Authenticating Agent.
An Authenticating Agent way resign at any time by giving written notice
thereof to the Indenture Trustee and to the Company. The Indenture 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 Indenture Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 1.6 to all Holders
of the Debentures. Any successor Authenticating
<PAGE>
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 provision 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 is made pursuant to this Section, the Debentures may
have endorsed thereon, in addition to the Indenture Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Debentures referred to in the within mentioned
indenture.
THE BANK OF NEW YORK Dated:_____________
As Indenture Trustee
By:
As Authenticating Agent
By:
Authorized Signatory
ARTICLE 7.
HOLDERS LISTS AND REPORTS BY INDENTURE TRUSTEE AND COMPANY
SECTION 7.1 COMPANY TO FURNISH NAMES AND ADDRESSES OF HOLDERS. The
Company will furnish or cause to be furnished to the Indenture Trustee (unless
the Indenture Trustee is acting as the Securities Registrar) the following:
(a) quarterly at least 5 Business Days before each Interest Payment
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Holders as of the related Regular Record.
(b) at such other times as the Indenture Trustee way request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
<PAGE>
SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Indenture Trustee as provided in Section 7.1 and
the names and addresses of Holders received by the Indenture Trustee in its
capacity as Securities Registrar. The Indenture Trustee may destroy any list
furnished to it as provided in Section 7.1 upon receipt of a new list so
furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Debentures, and the
corresponding rights and privileges of the Indenture Trustee, shall be as
provided in the Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding the same,
agrees with the Company and the Indenture Trustee that neither the Company nor
the Indenture Trustee nor any agent of either of them shall be held accountable
by reason of the disclosure of information as to the names and addresses of the
Holders made pursuant to the Trust Indenture Act.
SECTION 7.3 REPORTS BY INDENTURE TRUSTEE.
(a) The Indenture Trustee shall transmit to Holders such reports
concerning the Indenture Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act, at the times and in the manner
provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than May 15 in each calendar
year, commencing with the first May 15 after the first issuance of Debentures
under this Indenture.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Indenture Trustee with each stock exchange or self
regulatory organization of which the Indenture Trustee has received notice by
the Company upon which the Debentures are listed and also with the Commission.
The Company will notify the Indenture Trustee whenever the Debentures are listed
on any stock exchange or self-regulatory organization.
SECTION 7.4 REPORTS BY COMPANY. The Company shall file with the
Indenture Trustee and with the Commission, and transmit to Holders, such
information, documents and other reports, and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided in the Trust Indenture Act, provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Indenture Trustee within 15 days after the some is required to be
filed with the Commission. Notwithstanding that the Company may not be required
to remain subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company shall continue to file with the
Commission and provide the Indenture Trustee and Holders with the annual reports
and the information, documents and other reports which are specified in Sections
13 and 15(d) of the Exchange Act (without exhibits). The Company also shall
comply with the other provisions of Section 314(a) of the Trust Indenture Act.
<PAGE>
ARTICLE 8.
CONSOLIDATION, MERGER, CONTINUANCE,
CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The
Company shall not consolidate with or merge into any other Person, continue in
another jurisdiction or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(a) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be organized and existing under the laws of the United States of
America or any State or the District of Columbia, and shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest (including any
Additional Interest, Additional Amounts and Liquidated Damages) on all the
Debentures and the performance of every covenant of this Indenture on the part
of the Company to be performed or observed and shall have provided for
conversion rights in accordance with Article 13;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(c) such consolidation, merger, continuance, conveyance, transfer or
lease is permitted under the Declaration and Guarantee and does not give rise to
any breach or violation of the Declaration or Guarantee; and
(d) the Company has delivered to the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, continuance, conveyance, transfer or lease and any such supplemental
indenture complies with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with, and the
Indenture Trustee, subject to Section 6.1, may rely upon such Officers'
Certificate and Opinion of Counsel as conclusive evidence that such transaction
complies with this Section 8.1.
SECTION 8.2 SUCCESSOR PERSON SUBSTITUTED. Upon any consolidation or
merger by the Company with or into any other Person, or any conveyance, transfer
or lease by the Company of its properties and assets substantially as an
entirety to any Person in accordance with Section 8.1, the successor Person
formed by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company
herein; and in the event of any such
<PAGE>
conveyance or transfer (other than in the case of a lease) the Company shall be
discharged from all obligations and covenants under the Indenture and the
Debentures and may be dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Indenture Trustee, and, upon the Company Order of such
successor Person instead of the Company and subject to all the terms, conditions
and limitations in this Indenture prescribed, the Indenture Trustee shall
authenticate and shall deliver any Debentures which previously shall have been
signed and delivered by the officers of the Company to the Indenture Trustee for
authentication pursuant to a Company Order such provisions and any Debentures
which such successor Person thereafter shall cause to be signed and delivered to
the Indenture Trustee on its behalf for the purpose pursuant to such provisions.
All 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 of 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, continuance, sale,
conveyance or lease, such changes in phraseology and form may be made in the
Debentures thereafter to be issued as may be appropriate.
ARTICLE 9.
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without
the consent of or notice to any Holder, the Company, when authorized by a Board
Resolution, and the Indenture Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Indenture 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 contained; or
(b) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee or to surrender any right or power herein conferred
upon the Company; or
(c) to add to covenants of the Company for the benefit of the Holders
of the Debentures or to surrender any right or power herein conferred upon the
Company; or
(d) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article 13; or
(e) to add any additional Events of Default; or
<PAGE>
(f) 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 pursuant to this clause shall not
materially adversely affect the interest of the Holders of Debentures and for so
long as any of the Preferred Securities shall remain outstanding, the holders of
such Preferred Securities; or
(g) to evidence and provide for the acceptance of appointment hereunder
by successor Indenture Trustee 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 Trust hereunder by more than one Indenture Trustee,
pursuant to the requirements of Section 6.11(b); or
(h) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act; or
(i) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if any, to be
placed on Debentures, and all other matters required Pursuant to Section 3.5 or
otherwise necessary, desirable or appropriate in connection with the issuance of
Debentures to holders of Preferred Securities in the event of a distribution of
Debentures by the Trust if a Special Event occurs and is continuing.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
consent of the Holders of not less than a majority in principal amount at Stated
Maturity of the Outstanding Debentures, by Act of said Holders delivered to the
Company and the Indenture Trustee, the Company, when authorized by a Board
Resolution, and the Indenture Trustee may enter into an indenture or indentures
supplemental hereto, in form satisfactory to the Indenture Trustee, 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 the Debentures under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby, cause the following:
(a) except to the extent permitted by Section 3.11 with respect to the
extension of the interest payment period of the Debentures, change the Stated
Maturity of the principal of, or any installment of interest (including any
Additional Interest) on, the Debentures, or reduce the principal amount thereof
or the rate of interest thereon or reduce any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Debenture or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Maturity thereof (or, in the case of redemption, on or after the date fixed for
redemption thereof), or
(b) adversely affect any right to convert or exchange any Debenture; or
(c) reduce the percentage in principal amount of the Outstanding
Debentures, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture
<PAGE>
or certain defaults hereunder and their consequences) provided for in this
Indenture; or
(d) modify any of the provisions of this Section, Section 4.1, Section
5.8 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 Debenture affected thereby, or the consent of
the holders of all the Preferred Securities as the case may be; or
(e) modify the provisions in Article 12 of this Indenture with respect
to the subordination of Outstanding Debentures in a manner adverse to the
Holders thereof;
provided that, so long as any Preferred Securities remain outstanding no such
amendment of the Indenture that adversely affects the holders of the Preferred
Securities in any material respect shall be entered into, no termination of this
Indenture shall occur and no waiver of any Event of Default or compliance with
any covenant under this Indenture shall be effective, without the prior consent
of the holders of at least a majority of the aggregate liquidation preference of
such Preferred Securities then outstanding unless and until the principal (and
premium, if any) of the Debentures and all accrued and unpaid interest
(including any Additional Interest, Additional Sums and Liquidated Damages)
thereon have been paid in full; provided, however, that where a consent under
the Indenture would require the consent of each Holder of Debentures affected
thereby, no such consent shall be given by the Trustee without the prior consent
of each holder of Preferred Securities.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
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 trust created by this
Indenture, the Indenture Trustee shall be entitled to receive, and (subject to
Section 6.1) shall be fully protected in relying upon, an Officers' Certificate
and an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture, and that all conditions
precedent have been complied with. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Indenture 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 the Debentures theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby
unless it makes a change described in any of clauses (a) through (e) of Section
9.2, in which case the supplemental indenture shall bind only each Holder of a
Debenture who has consented to it and every subsequent Holder of a Debenture or
portion of a Debenture that evidences the same Debt as the consenting Holder's
Debenture; provided that any such waiver shall not impair or affect the right of
any Holder to receive payment of principal and
<PAGE>
premium of and interest on a Debenture, on or after the respective dates set for
such amounts to become due and payable, or to bring suit for the enforcement of
any such payment on or after such respective dates.
SECTION 9.5 CONFORMITY WITH TRUST INDENTURES ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 9.6 REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Indenture
Trustee, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Debentures so modified as to conform, in the opinion of the
Indenture Trustee and the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Debentures presented to the
Indenture Trustee. Any failure to make the appropriate notation shall not affect
the validity of such Debenture.
ARTICLE 10.
COVENANTS
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
covenants and agrees for the benefit of the Debentures that it will duly and
punctually pay the principal of (and premium, if any) and interest (including
Additional Interest, Additional Sums and Liquidated Damages, if any) on the
Debentures in accordance with the terms of the Debentures and this Indenture.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in the United States, an office or agency where Debentures may be presented or
surrendered for payment and an office or agency where Debentures way be
surrendered for transfer or exchange and where notices and demands to or upon
the Company in respect of the Debentures and this Indenture may be served. The
Company initially appoints the Indenture Trustee, acting through its Corporate
Trust Office, as its agent for said purposes. The Company will give prompt
written notice to the Indenture Trustee of any change in the location of any
such office or agency. If at any time the Company shall fail to maintain such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Indenture Trustee, and the Company
hereby appoints the Indenture Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
United States for such purposes. The Company will give prompt written notice to
the Indenture Trustee of any such designation and any change in the location of
any such office
<PAGE>
or agency.
SECTION 10.3 MONEY FOR DEBENTURE PAYMENTS TO BE HELD IN TRUST. If the
Company shall at any time act as its own Paying Agent with respect to the
Debentures, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Debentures, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal and premium, if any) or interest (including Additional Interest,
Additional Sums and Liquidated Damages, if any) so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Indenture Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or before each due date of the principal of or interest on the Debentures,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest (including Additional Interest, Additional Sums and
Liquidated Damages, if any) so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal and premium (if any) or
interest, and (unless such Paying Agent is the Indenture Trustee) the Company
will promptly notify the Indenture Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture 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
premium, if any) or interest (including Additional Interest, Additional Sums and
Liquidated Damages, if any) on Debentures 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 Indenture Trustee notice of any default by the Company (or
any other obligor upon the Debentures) in the making of any payment of principal
(and premium, if any) or interest (including Additional Interest, Additional
Sums and Liquidated Damages, if any);
(c) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent; and
(d) comply with the provisions of the Trust Indenture Act applicable to
it as a 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 Indenture Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held by
the Indenture 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 the Company
or any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
<PAGE>
Any money deposited with the Indenture Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Debenture and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall (unless otherwise required by mandatory provision of applicable
escheat or abandoned or unclaimed property law) be paid on Company Request,
after all payments owing the Indenture Trustee have been paid, to the Company,
or (if then held by the Company) shall (unless otherwise required by mandatory
provision of applicable escheat or abandoned or unclaimed property law) be
discharged from such trust; and the Holder of such Debenture shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as Indenture Trustee thereof,
shall thereupon cease; provided, however, that the Indenture 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 a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
after the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 10.4 EXISTENCE. Subject to Article 8, 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 material franchises;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Board of Directors in good faith 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 10.5 PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 10.6 STATEMENT AS TO COMPLIANCE. The Company shall deliver to
the Indenture Trustee, within 120 days after the end of each calendar year of
the Company ending after the date hereof an Officers' Certificate (signed by at
least one of the officers referred to in Section 314(a)(4) of the Trust
Indenture Act) covering the preceding calendar year, stating whether or not to
the best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants 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. For the purpose of this Section 10.6, compliance
shall be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
<PAGE>
SECTION 10.7 ADDITIONAL SUMS. In the event that (a) the Trustee is the
Holder of all of the Outstanding Debentures, (b) a Tax Event in respect of the
Trust shall have occurred and be continuing and (c) the Company shall not have
(i) redeemed all the Debentures pursuant to Section 11.7 or 11.8 or (ii)
terminated the Trust pursuant to Section 9.2(b) of the Declaration, the Company
shall pay to the Trust (and its permitted successors or assigns under the
Declaration) for so long as the Trust (or its permitted successor or assignee)
is the registered holder of the Debentures, such additional amounts as may be
necessary in order that the amount of distributions (including any Additional
Amounts (as defined in the Declaration)) then due and payable by the Trust on
the outstanding Preferred Securities and Common Securities that at any time
remain outstanding in accord with the terms thereof shall not be reduced as a
result of any Additional Taxes (the "ADDITIONAL SUMS"), unless the Company shall
have revoked such election or failed to make such payments. Whenever in this
Indenture or the Debentures there is a reference in any context to the payment
of principal of or interest on the Debentures, such mention shall be deemed to
include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not be construed as excluding Additional Sums in those
provisions hereof where such express mention is not made, provided, however,
that the extension of an interest payment period pursuant to Section 3.11 or the
Debentures shall not extend the payment of any Additional Sums that may be due
and payable during such interest payment period.
SECTION 10.8 ADDITIONAL COVENANTS. The Company covenants and agrees
with each Holder of Debentures that so long as the Debentures are outstanding,
if (i) there shall have occurred any event of which the Company has actual
knowledge that (A) is a Default and (B) in respect of which the Company shall
not have taken reasonable steps to cure, (ii) the Company shall be in default
with respect to its payment of any obligations under the Guarantee or (iii) the
Company shall have given notice of its selection of an Extension Period as
provided herein and shall not have rescinded such notice, or such period, or any
extension thereof, shall be continuing, then the Company shall not, and shall
not permit any Subsidiary to, (x) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any shares of the Company's Capital Stock or (y) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees of indebtedness for money borrowed) of the
Company that rank pari passu with or junior to the Debentures (other than (l)
any dividend, redemption, liquidation, interest, principal or guarantee payment
by the Company where the payment is made by way of securities (including Capital
Stock) that rank pari passu with or junior to the securities on which such
dividend, redemption, interest, principal or guarantee payment is being made,
(2) payments under the Guarantee, (3) purchases of Class A Common Stock related
to the issuance of Class A Common Stock under any of the Company's benefit plans
for its directors, officers or employees, (4) as a result of a reclassification
of the Company's Capital Stock or the exchange or conversion of one series or
class of the Company's Capital Stock for another series or class of the
Company's Capital Stock and (5) the purchase of fractional interests in shares
of the Company's Capital Stock pursuant to the conversion or exchange provisions
of such Capital Stock or the security being converted or exchanged).
<PAGE>
The Company also covenants with each Holder of the Debentures (i) that
for so long as Preferred Securities are outstanding not to convert the
Debentures except pursuant to a notice of conversion delivered to the Conversion
Agent by a holder of Preferred Securities and (ii) to maintain directly or
indirectly 100% ownership of the Common Securities of the Trust; provided,
however, that any permitted successor of the Company hereunder may succeed to
the Company's ownership of such Common Securities, (iii) not to voluntarily
terminate, wind-up or liquidate the Trust, except (a) in connection with a
distribution of the Debentures to the holders of Preferred Securities in
liquidation of the Trust or (b) in connection with mergers, consolidations or
amalgamations permitted by Section 9.5 of the Declaration and (iv) to use its
reasonable efforts, consistent with the terms and provisions of the Declaration
to cause the Trust to remain a business trust and not to be classified as an
association taxable as a corporation for United States Federal income tax
purposes.
SECTION 10.9. REGISTRATION RIGHTS. The holders of the Preferred
Securities, the Holders, the holders of the Guarantee and the shares of Class A
Common Stock of the Company issuable upon conversion of the Securities are
entitled to the benefits of a Registration Rights Agreement, dated as of June
27, 1997, among the Company and the Purchasers (the "REGISTRATION RIGHTS
AGREEMENT").
SECTION 10.10. PAYMENT OF EXPENSES OF THE TRUST. In connection with the
offering, sale and issuance of the Debentures to the Trustee and in connection
with the sale of the Preferred Securities by the Trust, the Company shall:
(a) pay for all costs, fees and expenses relating to the offering, sale
and issuance of the "Securities" (as defined in the Purchase Agreement),
including commissions, discounts and expenses payable pursuant to the Purchase
Agreement and compensation of the Indenture Trustee under the Indenture in
accordance with the provisions of Section 6.7 of the Indenture;
(b) be responsible for and pay for all debts and obligations (other
than with respect to the Preferred Securities) of the Trust, pay for all costs
and expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the offering, sale and issuance of
the Preferred Securities (including commissions, discounts and expenses in
connection therewith), the fees and expenses of the Trustee and the "Delaware
Trustee" (as defined in the Declaration), 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 the fees and expenses of the "Guarantee Trustee" (as defined
in the Guarantee); and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
<PAGE>
ARTICLE 11.
REDEMPTION OR EXCHANGE OF DEBENTURES
SECTION 11.1. ELECTION TO REDEEM; NOTICE TO INDENTURE TRUSTEE. The
election of the Company to redeem any Debentures shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Company, the Company shall, not less than 45 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Indenture
Trustee), notify the Indenture Trustee in writing of such date and of the
principal amount of Debentures to be redeemed.
SECTION 11.2. SELECTION OF DEBENTURES TO BE REDEEMED. If less than all
the Debentures are to be redeemed, the particular Debentures to be redeemed
shall be selected not more than 45 days prior to the Redemption Date by the
Indenture Trustee from the Outstanding Debentures not previously called for
redemption, by lot or by such other method as the Indenture Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of the Debentures Outstanding, provided that the
unredeemed portion of the principal amount of the Debentures be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for the Debentures.
The Indenture Trustee shall promptly notify the Company in writing of
the Debentures selected for partial redemption and 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 shall relate,
in the case of any Debenture redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debenture which has been or is to be
redeemed. If the Company shall so direct, Debentures registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Debentures selected for redemption.
SECTION 11.3. NOTICE OF REDEMPTION. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not later than the thirtieth day,
and not earlier than the sixtieth day, prior to the date fixed for redemption,
to each Holder of Debentures to be redeemed, at the address of such Holder as it
appears in the Securities Register.
With respect to Debentures to be redeemed, each notice of redemption
shall state:
(a) the date fixed for such redemption (the "Redemption
Date");
(b) the Redemption Price;
(c) if less than all Outstanding Debentures are to be
redeemed, the identification (and, in the case of partial redemption,
the respective principle amounts) of the particular Debentures to be
redeemed (including, if relevant, the CUSIP or ISIN number);
(d) that on the Redemption Date the Redemption Price will
become due and payable upon each such Debenture or portion thereof, and
that upon deposit of the
<PAGE>
Redemption Price and any unaccrued and unpaid interest with the Paying
Agent, interest (including Additional Interest, Additional Sums and
Liquidated Damages, if any) thereon, if any, shall cease to accrue on
and after the Redemption Date and such Debenture or portion thereof
shall cease to have conversion rights;
(e) the place or places where the Debentures are to be
surrendered for payment of the redemption price at which the Debentures
are to be redeemed; and
(f) that a Holder of Debentures who desires to convert
Debentures called for redemption must satisfy the requirements for
conversion contained in the Debentures, the then existing Conversion
Price or rate, and the date and time when the option to convert shall
expire.
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
Indenture Trustee in the name and at the expense of the Company and shall be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Debenture designed for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debenture.
SECTION 11.4. DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m., New
York City time, on the Redemption Date specified in the notice of redemption
given as provided in Section 11.3, the Company will deposit with the Indenture
Trustee or with one or more Paying Agents (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 redeem on the Redemption Date all the Debentures
so called for redemption at the applicable Redemption Price.
If any Debenture called for redemption has been converted, any money
deposited with the Indenture 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 11.5. DEBENTURES PAYABLE ON REDEMPTION DATE. If notice of
redemption has been given as provided in Section 11.3, the Debentures so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, including any accrued interest (and any Additional
Interest, Additional Sums and Liquidated Damages) thereon, and from and after
such date (unless the Company shall default in the payment of the Redemption
Price or any accrued interest (including any Additional Interest, Additional
Sums and Liquidated Damages) on) such Debentures shall cease to bear interest
and such Debenture will cease to have conversion rights. Upon surrender of any
such Debenture for redemption in accordance with said notice, such Debenture
shall be paid by the Company at the Redemption Price, including any accrued
interest (and any Additional Interest) to the Redemption Date, provided,
however, that installments of interest on Debentures whose Stated Maturity is on
or
<PAGE>
prior to the Redemption Date shall be payable to the Holders of such Debentures,
or one of more Predecessor Debentures, registered as such at the close of
business on the relevant Regular Record Dates or Special Record Dates, as the
case may be, according to their terms and the provisions of Section 3.7.
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 and such Debenture shall continue to have conversion rights.
SECTION 11.6. DEBENTURES REDEEMED IN PART. In the event of any
redemption in part, the Company shall not be required to (i) issue, register the
transfer of or exchange any Debenture during a period beginning at 9:00 a.m.
(New York City time) 15 Business Days before any selection for redemption of
Debentures and ending at 5:00 p.m. (New York City time) on the earliest date in
which the relevant notice of redemption is deemed to have been given to all
holders of Debentures to be so redeemed and (ii) register the transfer of or
exchange any Debentures so selected for redemption, in whole or in part, except
for the unredeemed portion of any Debentures being redeemed in part.
Any Debenture which is to be redeemed only in part shall be surrendered
at the place of payment therefor (with, if the Company or the Indenture Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Indenture Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Indenture Trustee shall authenticate and make available
for delivery to the Holder of such Debenture without service charge, a new
Debenture or Debentures, of any authorized denomination as requested by such
Holder, in aggregate principal amount at Stated Maturity equal to and in
exchange for the unredeemed portion of the principal of the Debenture so
surrendered. Each Debenture shall be subject to partial redemption only in the
amount of $50 or integral multiples thereof.
SECTION 11.7. OPTIONAL REDEMPTION. Except as set forth below, on and
after July 2, 2000 and subject to the next succeeding sentence, the Company
shall have the right, at any time and from time to time, to redeem the
Debentures, in whole or in part, upon notice given as set forth in Section 11.3
during the twelve-month periods beginning on July 2 in each of the following
years at the indicated Redemption Price (expressed as a percentage of the
principal amount at Stated Maturity of the Debentures being redeemed), together
with any accrued but unpaid interest (including any Additional Interest,
Additional Sums and Liquidated Damages) on the portion being redeemed:
<PAGE>
<TABLE>
<CAPTION>
Redemption Price Redemption Price
(% of principal amount (% of principal amount
Year at Stated Maturity) Year at Stated Maturity)
<S> <C> <C> <C>
2000.................. 104.55% 2004.................... 101.95%
2001.................. 103.90 2005.................... 101.30%
2002.................. 103.25% 2006.................... 100.65%
2003.................. 102.60% 2007 and thereafter.. .. 100.00%
</TABLE>
The Company may not redeem the Debentures in part unless all accrued
and unpaid interest (including any Additional Interest, Additional Sums and
Liquidated Damages) has been paid in full on all outstanding Debentures for all
quarterly interest periods terminating on or prior to the giving of notice of
the Redemption Date.
If at any time following the Conversion Expiration Date less than five
percent (5%) of the original aggregate principal amount of the Debentures
remains Outstanding, such Debentures shall be redeemable at the option of the
Company, in whole but not in part, at a Redemption Price equal to the principal
amount thereof, plus any accrued and unpaid interest (including any Additional
Interest, Additional Sums and Liquidated Damages).
If a Tax Event shall occur and be continuing, the Company shall have
the right upon not less than 30 nor more than 60 days' notice, to redeem the
Debentures in whole or in part, for cash upon the later of (i) 90 days following
the occurrence of such Tax Event or (ii) July 2, 2000, at a Redemption Price
equal to the principal amount at Stated Maturity of such Debentures plus any
accrued and unpaid interest, (including any Additional Interest, Additional Sums
and Liquidated Damages) to the date fixed for such redemption.
SECTION 11.8. EXCHANGE OF TRUST SECURITIES FOR DEBENTURES.
(a) At any time, the Company shall have the right to terminate the
Trust and cause the Debentures to be distributed to the holders of the Preferred
Securities in liquidation of the Trust after satisfaction of liabilities to
creditors of the Trust as provided by applicable law.
(b) If a Special Event in respect of the Trust shall occur, the Company
shall give the Trustee notice of the same. If a Special Event in respect of the
Trust shall occur and be continuing, the Declaration requires the Trustee to
direct the Conversion Agent (as defined in the Declaration) to exchange all
outstanding Trust Securities for the Debentures having a principal amount at
Stated Maturity equal to the aggregate liquidation amount of the Trust
Securities to be exchanged with accrued interest in an amount equal to any
unpaid distributions (including any Additional Amounts) on the Trust Securities,
provided that, in the case of a Tax Event, the
<PAGE>
Company shall have the right to direct the Trustee that less than all, or none
of the Trust Securities be so exchanged (i) if for so long as the Company shall
have elected to pay any Additional Sums such that the net amounts received by
holders of the Trust Securities not so exchanged in respect of distributions are
not reduced as a result of such Tax Event, and shall not have revoked any such
election or failed to make such payments or (ii) if the Company shall instead
elect to redeem the Debentures, in whole or in part, in the manner set forth in
Section 11.8.
ARTICLE 12.
SUBORDINATION OF DEBENTURES
SECTION 12.1. DEBENTURES SUBORDINATE TO SENIOR DEBT. The Company
covenants and agrees, and each Holder of a Debenture, by its acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article, the payment of the principal of (and premium, if any)
and interest (including any Additional Interest, Additional Sums and Liquidated
Damages) on each and all of the Debentures are hereby expressly made subordinate
and subject in right of payment to the prior payment in full of all amounts then
due and payable in respect of all Senior Debt (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
SECTION 12.2. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company (each such event, if any, herein sometimes
referred to as a "PROCEEDING"), then the holders of Senior Debt shall be
entitled to receive payment in full of principal of (and premium, if any) and
interest (including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt), if any, on such Senior Debt,
or provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Debentures are entitled to receive or retain any payment or
distribution of any kind or character, whether in cash, property or securities
(including any payment or distribution which may be payable or deliverable by
reason of the payment of any other Debt of the Company subordinated to the
payment of the Debentures, but not including any payments that are made from
funds on deposits pursuant to Section 4.1(a)(ii)(B)or funds on deposit for the
redemption of Debentures for which notice of Redemption has been given and the
applicable Redemption Date has passed, such payment or distribution being
hereinafter referred to as a "JUNIOR SUBORDINATED PAYMENT"), on account of
principal or (or premium, if any) or interest (including any Additional
Interest, Additional Sums or Liquidated Damages) on the Debentures or on account
of the purchase or other acquisition of Debentures by the Company or any
Subsidiary and to that end the holders of Senior Debt shall be entitle to
receive, for application to the payment thereof any payment or distribution of
any kind of character, whether in cash, property or Debentures, including any
Junior Subordinated Payment, which may be payable or deliverable in respect of
the Debentures in any such Proceeding.
For the purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in 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
<PAGE>
corporation provided for by a plan of reorganization or readjustment which
securities are subordinated in right of payment to all then outstanding Senior
Debt to substantially the same extent as 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 sale of all or substantially all of its properties and
assets as an entirety to another Person or the liquidation or dissolution of the
Company following the sale of all or substantially all of its properties and
assets as an entirety to another Person upon the terms and conditions set forth
in Article 8 shall not be deemed a Proceeding 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 sale such properties and assets as an entirety,
as the case may be, shall, as a part of such consolidation, merger, or sale
comply with the conditions set forth in Article Eight.
SECTION 12.3. PRIOR PAYMENT TO SENIOR DEBT UPON ACCELERATION OF
DEBENTURES. In the event that the Debentures are declared due and payable before
their Maturity, then and in such event the holders of the Senior Debt
outstanding at the time the Debentures so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Debentures
are entitled to receive any payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment) by the Company on account of the principal of (or premium, if any) or
interest (including any Additional Interest, Additional Sums or Liquidated
Damages) on the Debentures or on account of the purchase or other acquisition of
Debentures by the Company or any Subsidiary.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Indenture Trustee or the Holder of the Debentures
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 know, as set forth in
Section 12.10, to the Indenture 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 12.2 would be applicable.
SECTION 12.4. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT. In the event and
during the continuation of any default in the payment of principal of (or
premium, if any) or interest on any Senior Debt, or in the event that any event
of default with respect to any Senior Debt shall have occurred and be continuing
and shall have resulted in such Senior Debt becoming or being declared due and
payable prior to the date on which it would be otherwise have become due and
payable, unless and until such event of default shall have been cured or waived
or shall have ceased to exist and such acceleration shall have been rescinded or
annulled, or in the event that any judicial proceeding shall be pending with
respect to any such default in payment or such event or default, then no payment
or distribution of any kind or character, whether in cash, properties or
Debentures (including any Junior Subordinated Payment) shall be made by the
Company on account of principal of (or premium, if any, on) or interest
(including any
<PAGE>
Additional Interest, Additional Sums and Liquidated Damages), if any, on the
Debentures or on account of the purchase or other acquisition of Debentures by
the Company or any Subsidiary other than payments made from funds on deposit
pursuant to Section 4.1(a)(ii)(B) or from funds on deposit for the redemption of
Debentures for which notice of redemption has been given and the Redemption Date
has passed.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Indenture Trustee or the Holder of the Debentures
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 as set forth in
Section 12.10, to the Indenture 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 12.2 would be applicable.
SECTION 12.5. PAYMENT PERMITTED IF NO DEFAULT. 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
Proceeding referred to in Section 12.2 or under the conditions described in
Sections 12.3 and 12.4, from making payments at any time or principal of (and
premium, if any) or interest on the Debentures, or (b) the application by the
Indenture Trustee of any money deposited with it hereunder to the payment of or
on account of the principal of (and premium, if any) or interest (including any
Additional Interest, Additional Sums and Liquidated Damages) on the Debentures
or the retention of such payment by the Holders, if, at the time of such
application by the Indenture Trustee, the Indenture Trustee did not have actual
knowledge that such payment would have been prohibited by the provisions of this
Article.
SECTION 12.6. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT. Subject
to the payment in full of all Senior Debt, or the provision for such payment in
cash or cash equivalents or otherwise in a manner satisfactorily to the holders
of Senior Debt, the Holders of the Debentures shall be subrogated to the extent
of the payments or distributions made to the holders of such Senior Debt
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Company which by its express terms is subordinated to
Senior Debt of the Company to substantially the same extent as the Debentures
are subordinated to the Senior Debt and is entitled to like rights of
subrogation by reason by any payments or distributions made to holders of such
Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distribution of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any, on) and interest
(including any Additional Interest, Additional Sums and Liquidated Damages) on
the Debentures shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Debentures or the Indenture
Trustee would be entitled except for the provisions of this Article to the
holders of Senior Debt by Holders of the Debentures or the Indenture Trustee,
shall, as among the Company, its creditors other than holders of Senior Debt,
and the Holders of the Debentures, be deemed to be a payment or distribution by
the Company to or on account of the Senior Debt.
SECTION 12.7. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this
<PAGE>
Article are and are intended solely for the purpose of defining the relative
rights of the Holders of the Debentures on the one hand and the holders of
Senior Debt 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
between the Company and Holders of the Debentures, the obligations of the
Company, which are absolute and unconditional, to pay to the Holders of the
Debentures the principal of (and premium, if any, on) and interest (including
any Additional Interest, Additional Sums and Liquidated Damages) 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 the Debentures and creditors of the Company other than their rights
in relation to the holders of Senior Debt, or (c) prevent the Indenture Trustee
or the Holder of any Debenture from exercising all remedies otherwise permitted
by applicable law upon default under this Indenture including, without
limitation, filing and voting claims in any Proceeding, subject to the rights,
if any, under this Article of the holders of Senior Debt to receive cash,
property and securities otherwise payable or deliverable to the Indenture
Trustee or such Holder.
SECTION 12.8. INDENTURE TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Holder of a Debenture by his or her acceptance thereof authorized and directs
the Indenture Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination provided
in this Article and appoints the Indenture Trustee his or her attorney-in-fact
for any and all such purposes.
SECTION 12.9. NO WAIVER OF SUBORDINATION PROVISIONS. No right of any
present or future holder of any Senior Debt 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 that any such holder may have or be otherwise charged with.
SECTION 12.10. NOTICE TO INDENTURE TRUSTEE. The Company shall give
prompt written notice to the Indenture Trustee of any fact known to the Company
which would prohibit the making of any payment to or by the Indenture Trustee in
respect of the Debentures. Notwithstanding the provisions of this Article or any
other provisions of this Indenture, the Indenture 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 Indenture Trustee in respect of the Debentures, unless
and until the Indenture Trustee shall have received written notice thereof from
the Company or a person representing therefor (whether or not the facts
contained in such notice are true).
Subject to the provisions of Section 6.1, the Indenture 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 Debt (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Debt (or a
trustee therefor). In the event that the Indenture Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article, the Indenture Trustee may request such Person to
furnish evidence to the satisfaction of the Indenture Trustee as to the amount
of Senior Debt held by such Person, the extent to which such Person is entitled
to
<PAGE>
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article, and if such evidence is not furnished,
the Indenture Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 12.11. 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 Indenture Trustee, subject to the provisions of Article 6, and
the Holders of the Debentures shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which a Proceeding is pending,
or a certificate of the Indenture Trustee in bankruptcy, receiver, liquidating
Indenture Trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Indenture
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
the Senior Debt and other indebtedness of the Company, the amount thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
SECTION 12.12. INDENTURE TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
DEBT. With respect to the holders of the Senior Debt of the Company, the
Indenture Trustee undertakes to perform or observe only such of its obligations
and covenants as are set forth in this Article 12, and no implied covenants or
obligations with respect to the holders of such Senior Debt shall be read into
this Indenture against BNY and/or the Indenture Trustee. BNY and/or the
Indenture Trustee shall not be deemed to owe any fiduciary duty to the holders
of such Senior Debt and, subject to the provisions of Section 6.3, neither the
Indenture Trustee (nor BNY) shall be liable to the holder of any Senior Debt if
it shall pay over or deliver to Holders, the Company, or any other person, money
or assets to which any holder of such Senior Debt shall be entitled to by virtue
of this Article 12 or otherwise.
SECTION 12.13. RIGHTS OF INDENTURE TRUSTEE AS HOLDER OF SENIOR DEBT;
PRESERVATION OF INDENTURE TRUSTEE'S RIGHTS. The Indenture Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article with respect to any Senior Debt which may at any time be held by it, to
the same extent as any other holder of Senior debt, and, subject to the
requirements of the Trust Indenture Act, nothing in this Indenture shall deprive
the Indenture Trustee of any of its rights as such holder.
SECTION 12.14. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time
any Paying Agent other than the Indenture Trustee shall have been appointed by
the Company and be then acting hereunder, the term "INDENTURE 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 intent and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Indenture Trustee.
SECTION 12.15. CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT. For the
purpose of this Article only, (a) the issuance and delivery of junior securities
upon conversion or exchange of Debentures pursuant to Article 13 shall not be
deemed to constitute a payment or distribution on account of the principal of
(or premium, if any, on) or interest (including any
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Additional Interest, Additional Sums and Liquidated Damages) on the Debentures
or on account of the purchase or other acquisition of Debentures, and (b) the
payment, issuance or delivery of cash (including any payments for fractional
shares), property or securities (other than junior securities) upon conversion
or exchange of a Debenture shall be deemed to constitute payment on account of
the principal of such security. For the purpose 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 Debt 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 the Article.
ARTICLE 13.
CONVERSION OF DEBENTURES
SECTION 13.1. CONVERSION RIGHTS. Subject to and upon compliance with
the provisions of this Article, the Debentures are convertible, at the option of
the Holder, at any time prior to the Conversion Expiration Date, into fully pad
and nonassessable shares of Class A Common Stock of the Company at an initial
conversion rate of 1.7544 shares of Class A Common Stock for each $50 in
aggregate principal amount at Stated Maturity of Debentures (equal to a
conversion price of $28.50 per share of Class A Common Stock), subject to
adjustment as described in this Article 13 (as adjusted, the "CONVERSION
PRICE"). A Holder of Debentures may convert any portion of the principal amount
of the Debentures into that number of fully paid and nonassessable shares of
Class A Common Stock (calculated as to each conversion to the nearest 1/100th of
a share) obtained by dividing the principal amount at Stated Maturity of the
Debentures to be converted by the Conversion Price. In case a Debenture or
portion thereof is called for redemption, such conversion right in respect of
the Debenture or portion so called shall expire at the close of business on the
Conversion Expiration Date.
SECTION 13.2. CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Debentures, the Holder
thereof shall deliver to the Trustee, as conversion agent or to such other agent
appointed for such purposes (the "CONVERSION AGENT") an irrevocable Notice of
Conversion setting forth the principal amount at Stated Maturity of Debentures
to be converted, together with the name or names, if other than the Holder, in
which the shares of Class A Common Stock should be issued upon conversion and,
if such Debentures to be converted, duly endorsed or assigned to the Company or
in blank. In addition, a holder of Preferred Securities may exercise its right
under the Declaration to convert such Preferred Securities into Class A Common
Stock by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Preferred Security for a portion of
the Debentures held by the Trust (at an exchange rate of $50 principal amount at
Stated Maturity of Debentures for each $50 of liquidation preference of
Preferred Securities) and (ii) to immediately convert such Debentures, on behalf
of such holder, into Class A Common Stock of the Company pursuant to this
Article 13 and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities to the Conversion Agent. So long as the
Preferred Securities are outstanding, the Trust shall not convert any Debentures
except pursuant to a Notice of Conversion delivered to the Conversion Agent by a
holder of Preferred Securities. If a Notice
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of Conversion is delivered on or after the Regular Record Date and prior to the
subsequent Interest Payment Date, the Holder of record on the Regular Record
Date will be entitled to receive the interest paid on the subsequent Interest
Payment Date on the portion of Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date; provided that if a
Redemption Date falls between such Regular Record Date and the related Interest
Payment Date, the amount of such payment shall include interest accrued to, but
excluding, such Redemption Date. Except as otherwise provided in the immediately
preceding sentence, in the case of any Debenture which is converted, interest
whose Stated Maturity is on or after the date of conversion of such 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 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 Preferred Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such Class A Common Stock as of the Conversion Date and such Person or Persons
will cease to be a record Holder or record Holders of the Debentures on that
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 or holder in the Notice of Conversion, a certificate or
certificates for the number of full shares of Class A 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 Class A Common Stock into which the 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 Debentures so converted and any unpaid interest
(including Additional Interest, Additional Sums and Liquidated Damages) accrued
on such Debentures at the time of such conversion.
(c) No fractional shares of Class A 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 Current Market Price with respect to such fractional interest on the date on
which the Debentures or Preferred Securities, as the case may be, were duly
surrendered to the Conversion Agent for conversion, and the Conversion Agent in
turn will make such payment, if any, to the Holder of the Securities or the
holder of the Preferred Securities so converted.
(d) In the event of the conversion of any Debenture in part only, a new
Debenture or Debentures for the unconverted portion thereof will be issued in
the name of the Holder thereof upon the cancellation of the Debenture converted
in part in accordance with Section 3.5.
(e) In effecting the conversion transactions described in this Section,
the Conversion
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Agent is acting as agent of the holders of Preferred Securities (in exchange of
Preferred Securities for Debentures) and as agent of the holders of Debentures
(in conversion of Debentures into Class A Common Stock), as the case may be,
directing it to effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to exchange Debentures held by the Trust from time to time
for Preferred Securities in connection with the conversion of such Preferred
Securities in accordance with this Article 13 and (ii) to convert all or a
portion of the Debentures into Class A Common Stock and thereupon to deliver
such shares of Class A Common Stock in accordance with the provisions of this
Article 13 and to deliver to the Trust a new Debenture or Debentures for any
resulting unconverted principal amount.
(f) All shares of Class A Common Stock delivered upon any conversion of
Restricted Securities shall bear a Restrictive Securities Legend substantially
in the form of the legend required to be set forth on such Debentures and shall
be subject to the restrictions on transfer provided in such legend and in
Section 3.15 hereof. Neither the Indenture Trustee nor the Conversion Agent
shall have any responsibility for the inclusion or content of any such
Restrictive Securities Legend on such Class A Common Stock; provided, however,
that the Indenture Trustee or the Conversion Agent shall have provided to the
Company or to the Company's transfer agent for such Class A Common Stock, prior
to or concurrently with a request to the Company to deliver such Conversion
Agent certificates for such Class A Common Stock, written notice that the
Debenture delivered for conversion are Restricted Securities.
(g) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized and unissued Class A Common Stock,
solely for issuance upon the conversion of the Debentures, such number of shares
of Class A Common Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Company shall be entitled to deliver upon conversion of
Debentures shares of Class A Common Stock reacquired and held in the treasury of
the Company (in lieu of the issuance of authorized and unissued shares of Class
A Common Stock) so long as any such treasury shares are free and clear of all
liens, charges, security interests or encumbrances. Any shares of Class A Common
Stock issued upon conversion of the Debentures shall be duly authorized, validly
issued and fully paid and nonassessable. The Conversion Agent shall deliver the
shares of Class A 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. The Company shall use
its best efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall comply with
all applicable requirements as to registration or qualification of the Class A
Common Stock (and all requirements to list the Class A Common Stock issuable
upon conversion of Debentures that are on the time applicable), in order to
enable the Company to lawfully issue Class A Common Stock to each Holder upon
conversion of the Debentures.
(h) The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Class A Common Stock on conversion
of Debentures. 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 Class A Common Stock in a name other than that in which the Debentures
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 Conversion Agent
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the amount of any such tax, or has established to the satisfaction of the
Conversion Agent that such tax has been paid.
(i) Nothing in this Article 13 shall limit the requirement of the
Company to withhold taxes pursuant to the terms of the Debentures or as set
forth in this Agreement or otherwise require the Indenture Trustee or the
Company to pay any amounts on account of such withholdings.
SECTION 13.3. EXPIRATION OF CONVERSION RIGHTS. The conversion rights of
the Holders shall expire on the close of business on the Business Day prior to
the Maturity date of the Debentures, or, in the case Debentures called for
redemption, at the close of business on the Business Day prior to the Redemption
Date unless the Company defaults on making the payment due upon redemption (the
"CONVERSION EXPIRATION DATE").
SECTION 13.4. CONVERSION PRICE ADJUSTMENTS. The conversion price shall
be subject to adjustment (without duplication) from time to time as follows:
(a) In case the Company shall, while any of the Debentures are
outstanding, (i) pay a dividend or make a distribution with respect to its
Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares or (iv) issue by reclassification of its shares of
Common Stock into shares of Common Stock and securities other than shares of
Common Stock not constituting a Fundamental Change, then the Conversion Price of
shares of Capital Stock of the Company and the number and kind of shares of
Capital Stock of the Company receivable upon a conversion of Debentures in
effect immediately prior to such action shall be adjusted so that the Holder of
any Debentures thereafter surrendered for conversion shall be entitled to
receive the number of shares of Capital Stock of the Company which he would have
owed immediately prior thereto if such Debenture had 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 dated shall have been established for such event). If,
as a result of an adjustment made pursuant to this subsection (a), the Holder of
any 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 Indenture Trustee) shall
determine the allocation of the adjusted Conversion Price between or among
shares of such classes or series of Capital Stock. In the event that such
dividend, distribution, subdivision, combination or issuance 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.
(b) In case the Company shall, while any of the Debentures are
Outstanding, issue rights or warrants to all holders of its Class A Common Stock
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Class A Common Stock at
a price per share less than the Current Market Price per share of Class A Common
Stock on the record date mentioned below, the Conversion Price for
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the 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 Class A Common Stock outstanding at
the close of business on the record date mentioned below 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 Class A
Common Stock outstanding at the close of business on the record date mentioned
below plus the number of additional shares of Class A Common Stock offered for
subscription or purchase. Such adjustment shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such rights or warrants. For the purposes of this subsection, the number of
shares in Class A 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 Class A 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 f 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 sub-paragraph, in case the
Company shall, by dividend or otherwise, distribute to all holders of its Class
A Common Stock evidences of its indebtedness, shares of any class or series of
Capital Stock, cash or assets (including securities, but excluding any rights or
warrants referred to in subparagraph (b), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in subparagraph
(a) of this Section 13.4), 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 close of business on the date fixed for the
determination of stockholders entitled to such distribution (the "REFERENCE
DATE") by a fraction of which the numerator shall be the Current Market Price
per share of the Class A Common Stock on 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 Board Resolution), on the
Reference Date, of the portion of the evidences of indebtedness, shares of
capital stock, cash and assets so distributed applicable to one share of Class A
Common Stock and the denominator shall be such Current Market Price per share of
the Class A Common Stock, such reduction to become effective immediately prior
to the opening of business on the day following the Reference Date. In the event
that such dividend or distribution is not so paid or made, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not occurred. For purposes of this
subparagraph (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 subparagraph (c)) immediately followed by (ii) a dividend or
distribution of such shares of Common Stock or such rights or warrants (making
any further a conversion price reduction required by subparagraph (a) or (b)),
except any shares of Common Stock included in such dividend or distribution
shall not be deemed outstanding for
<PAGE>
purposes of computing any adjustment of the conversion price in subparagraph
(a).
(d) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding all regular cash
dividends, if the annualized amount thereof per share of Common Stock does not
exceed 5% of the Current Market Price per share of the Class A Common Stock on
the Trading Day immediately preceding the date of declaration of such dividend),
the Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by this
subparagraph (d) by a fraction of which the numerator shall be the Current
Market Price per share of the Class A Common Stock on the date fixed for the
payment of such distribution less the amount of cash so distributed (excluding
that portion of such distribution that does not exceed 5% of the Current Market
Price per share, determined as provided above) applicable to one share of Common
Stock and the denominator shall be such Current Market Price per share of the
Class A Common Stock, such reduction to become effective immediately prior to
the opening of business on the day following the date fixed for the payment of
such distribution; provided, however, that in the event the portion of the cash
so distributed applicable to one share of Common Stock is equal to or greater
than the Current Market Price per share of the Class A Common Stock on the
record date mentioned above (excluding that portion of such distribution that
does not exceed 5% of the Current Market Price per share, determined as provided
above), in lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder of shares of Debentures shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted each share of the Debentures immediately prior to the record date for
the distribution of the cash (less that portion of such distribution that does
not exceed 5% of the Current Market Price per share, determined as provided
above). 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
Board Resolution) at the last time (the "EXPIRATION TIME") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have been
amended) that exceeds 110% of the Current Market Price per share of the Class A
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
subparagraph (e) by a fraction of which the numerator shall be the number of
shares of Class A Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time (including the Purchased Shares) (as defined
below) multiplied by the Current Market Price per share of the Class A Common
Stock on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged
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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") (excluding
that portion of such consideration that does not exceed 110% of the Current
Market Price per share) and (y) the product of the number of shares of Class A
Common Stock outstanding (less any Purchased Shares) at the Expiration Time and
the Current Market Price per share of the Class A Common Stock on the trading
day next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time. In the event that such tender or exchange offer is not so 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.
(f) The Company shall have the right to reduce from time to time the
Conversion Price by any amount selected by the Company for any period of at
least 30 days, provided that the Company shall give at least 15 days' prior
notice of such reduction to the Indenture Trustee, the Trustee, the holders of
the Preferred Securities (if the Trust then holds Debentures) and other Holders
of the Debentures. The Company may, at its option, make such reductions in the
Conversion Price, in addition to those set forth above in Sections 13.4(a)
through (e), as the Board of Directors deems advisable to avoid or diminish any
income tax to holders of Class A 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. No adjustment of the Conversion Price will be made
upon the issuance of any shares of Class A Common Stock of the Company pursuant
to any present or future 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 Class A Common Stock of the Company under any such
plan, or the issuance of any shares of Class A Common Stock or options or rights
to purchase such shares pursuant to any present or future employee benefit plan
or program of the Company or pursuant to any option, warrant, right, or
exercisable, exchangeable or convertible security which does not constitute an
issuance to all holders of Class A Common Stock or a class thereof, of rights or
warrants entitling holders of such rights or warrants to subscribe for or
purchase Class A Common Stock at less than the Current Market Price. There shall
also be no adjustment of the Conversion Price in case of the issuance of any
Class A Common Stock (or securities convertible into or exchangeable for Class A
Common Stock), except as specifically described above.
(g) If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of the Debentures.
SECTION 13.5. FUNDAMENTAL CHANGE.
(a) In the event that the Company is a party to any transaction
(including, without limitation, a merger other than a merger that does not
result in a reclassification, conversion, exchange or cancellation of Class A
Common Stock), consolidation, continuance, sale of all or substantially all of
the assets of the Company, recapitalization or reclassification of Class A
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 Class A Common Stock)
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or any compulsory share exchange (each of the foregoing being referred to as a
"TRANSACTION"), in each case, as a result of which shares of Class A Common
Stock shall be converted into the right to receive, or shall be exchanged for,
(i) in the case of any Transaction other than a Transaction involving a Stock
Fundamental Change (and subject to funds being legally available for such
purpose under applicable law and the time of such conversion), securities, cash
or other property, each Debenture shall thereafter be convertible into the kind
and, in the case of a Transaction which does not involve a Fundamental Change,
amount of securities, cash and other property receivable upon the consummation
of such Transaction by a holder of that number of shares of Class A Common Stock
into which a Debenture was convertible immediately prior to such Transaction, or
(ii) in the case of a Transaction involving a Stock Fundamental Change, each
Debenture shall thereafter be convertible (in the manner described herein) into
Common Stock of the kind received by holders of Class A Common Stock (but in
each case after giving effect to any adjustment discussed in paragraphs (b) and
(c) relating to a Fundamental Change if such Transaction constitutes a
Fundamental Change). The Holders of Debentures will have no voting rights with
respect to any Transaction described in this section.
(b) If any Fundamental Change occurs, then the Conversion Price in
effect will be adjusted immediately after such Fundamental Change as described
in paragraph (c) below. In addition, in the event of a Stock Fundamental Change,
each Debenture shall be convertible solely into Common Stock of the kind
received by holders of Class A Common Stock as a result of such Stock
Fundamental Change.
(c) The Conversion Price in the case of any Transaction involving a
Fundamental Change will be adjusted immediately after such Fundamental Change:
(1) in the case of a Non-Stock Fundamental Change, the
Conversion Price of the Debentures immediately following such Non-Stock
Fundamental Change will be the lower of (A) the Conversion Price in
effect immediately prior to such Non-Stock Fundamental Change (after
giving effect to any other prior adjustments), and (B) the result
obtained by multiplying the greater of the Applicable Price and the
then applicable Reference Market Price by a fraction of which the
numerator will be $50 and the denominator will be (x) the amount of the
Redemption Price for the Debenture if the Redemption Date were the date
of such Non-Stock Fundamental Change (or, for the period commencing on
the first date of original issuance of the Debentures and through July
1, 1998, and the twelve-month periods commencing July 2, 1998, and July
2, 1999, the product of 105.23%, 105.91% and 106.60% respectively,
multiplied by $50) plus (y) any then-accrued and unpaid interest on the
Debentures; and
(2) in the case of a Stock Fundamental Change, the Conversion
Price of the Debentures immediately following such Stock Fundamental
Change will be the Conversion Price of the Debentures in effect
immediately prior to such Stock Fundamental Change (after giving effect
to any other prior adjustments) as adjusted by multiplying such
Conversion Price by a fraction of which the numerator will be the
Purchaser Stock Price and the denominator will be the Applicable Price;
provided, however, that in the event of a Stock Fundamental Change in
which (A) 100% of the value of the consideration received by a holder
of Class A Common Stock is Common Stock of the successor,
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acquirer or other third party (and cash, if any, is paid only with
respect to any fractional interests in such Common Stock resulting from
such Stock Fundamental Change) and (B) all of the Class A Common Stock
will have been exchanged for, converted into, or acquired for Common
Stock (and cash with respect to fractional interests) of the successor,
acquiror, or other third party, the Conversion Price of the Debentures
in effect immediately prior to such Stock Fundamental Change as
adjusted by multiplying such Conversion Price by a fraction of which
the numerator will be one and the denominator will be the number of
shares of Common Stock of the successor, acquiror, or other third party
received by a holder of one share of Class A Common Stock as a result
of such Stock Fundamental Change.
SECTION 13.6. 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 Indenture Trustee, the Conversion
Agent and the transfer agent for the Preferred Securities and the 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 Preferred Securities and the Debentures at
their last addresses as they appear upon the stock transfer books of the Company
and the Trust and the Securities Registrar.
SECTION 13.7. PRIOR NOTICE OF CERTAIN EVENTS. In case:
(i) the Company shall (A) declare any dividend (or any other
distribution) on its Common Stock, other than (x) a dividend payable in
shares of Common Stock or (y) a dividend payable in cash that would not
require an adjustment pursuant to Section 13.4(c) or (d) or (B)
authorize a tender or exchange offer that would require an adjustment
pursuant to Section 13.4(e) (or shall amend any such tender or exchange
offer to change the maximum number of shares being sought or the amount
or type of consideration being offered (including by exchange)
therefor);
(ii) the Company shall authorize the granting to all holders
Common Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or
warrants;
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value
to par value), or of any consolidation or merger to which the Company
is a party and for which approval of 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 Class A Common Stock is converted into other securities, cash or
other property; or
<PAGE>
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company, (A) shall if any Preferred Securities are outstanding under
the Declaration, cause to be filed with the transfer agent for the Preferred
Securities, and shall cause to be mailed to the holders of record of the
Preferred Securities, at their last addresses as they shall appear upon the
stock transfer books of the Trust or (B) shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Securities Register, at
least 15 days prior to the applicable record, effective or expiration date
hereinafter specified, a notice stating (x) the date on which a record (if any)
is to be taken for the purpose of such dividend, distribution, rights or
warrants or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution, rights or
warrants are to be determined, (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up or (z) the date on which such
tender or exchange offer (other than an exchange offer contemplated by clause
(y) above) commenced, the date on which such tender or exchange offer is
scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto); 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 13.8. DIVIDEND OR INTEREST REINVESTMENT PLANS. Notwithstanding
anything to the contrary in this Article 13, 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 the date the Debentures were first issued, shall not be deemed
to constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the Conversion
Price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article 13.
<PAGE>
SECTION 13.9. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on its Common Stock referred to in Section 13.4(c) or 13.4(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 13.4(c)), the Holders of the Debentures, upon the
conversion thereof subsequent to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution and prior to
the effectiveness of the Conversion Price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which the 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 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 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 Class A
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets to which such Holder is so entitled, provided, that such
due bill (i) meets any applicable requirements of the principal ntional
securities exchange or other market on which the Class A Common Stock is then
traded and (ii) requires payment or delivery of such shares of Common Stock,
rights, warrants, evidences of indebtedness, shares of capital stock, cash or
assets no later than the date of payment or delivery thereof to holders of
shares of Common Stock receiving such distribution.
SECTION 13.10. RESTRICTIONS ON CLASS A COMMON STOCK ISSUABLE UPON
CONVERSION.
(a) Shares of Class A Common Stock to be issued upon conversion of a
Debenture in respect of Restricted Preferred Securities shall bear such
restrictive legends as the Company may provide in accordance with applicable
law.
(b) If shares of Class A Common Stock to be issued upon conversion of a
Debenture in respect of Restricted Preferred Securities are to be registered in
a name other than that of the Holder of such Preferred Security, then the Person
in whose name such shares of Class A Common Stock are to be registered must
deliver to the conversion Agent a certificate satisfactory to the Company and
signed by such Person, as to compliance with the restrictions on transfer
applicable to such Preferred Security. Neither the Indenture Trustee nor any
Conversion Agent or Registrar shall be required to register in a name other than
that of the Holder shares of Class A Common Stock issued upon conversion of any
such Debenture in respect of such Preferred Securities not so accompanied by a
properly completed certificate.
SECTION 13.11. INDENTURE TRUSTEE NOT RESPONSIBLE FOR DETERMINING
CONVERSION
<PAGE>
PRICE OR ADJUSTMENTS. Neither the Indenture Trustee nor any Conversion Agent
shall at any time be under any duty or responsibility to any Holder of any
Debenture or to any holder of a Preferred Security to determine whether any
facts exist which may require any adjustment of the Conversion Price, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Indenture Trustee nor
any Conversion Agent shall be accountable with respect to the validity or value
(or the kind of account) of any shares of Class A Common Stock or of any
securities or property, which may at any time be issued or delivered upon the
conversion of any Debenture; and neither the Indenture Trustee nor any
Conversion Agent makes any representation with respect thereto. Neither the
Indenture 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 Class A Common Stock or stock certificates or other securities or
property upon the surrender of any Debenture for the purpose of conversion, or,
except as expressly herein provided, to comply with any of the covenants of the
Company contained in Article 10 or this Article 13.
SECTION 13.12. LIMITATION ON ABILITY TO EXERCISE CONVERSION RIGHTS. In
order to maintain the eligibility of the Company to operate vessels in the U.S.
domestic trade, 75% of the outstanding Capital Stock and voting power of the
Company is required to be held by U.S. citizens. As a result of this
requirement, any non-citizen holder of the Preferred Securities or the
Debentures will, to the extent the conversion thereof into shares of Class A
Common Stock would cause more than 25% of outstanding Common Stock of the
Company to be held by non-citizens, be unable to convert such Preferred
Securities or Debentures into shares of Class A Common Stock and will be
required to sell its Preferred Securities or Debentures to U.S. citizens in
order to realize the economic benefits, if any, of conversion pursuant to the
articles of incorporation of the Company.
* * * *
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
HVIDE MARINE INCORPORATED
By:
THE BANK OF NEW YORK,
as Indenture Trustee
By:
Exhibit 4.4
CERTIFICATE NUMBER NUMBER OF PREFERRED SECURITIES
CUSIP NO.
3 83,000 U44 785 100
This Preferred Security is a Book-Entry Preferred Securities Certificate within
the meaning of the Declaration hereinafter referred to and is registered in the
name of The Depository Trust Company ("DTC") or a nominee of DTC. This Preferred
Security is exchangeable for Preferred Securities registered in the name of a
person other than DTC or its nominee only in the limited circumstances described
in the Declaration and no transfer of this Preferred Security (other than a
transfer of this Preferred Security as a whole by DTC to a nominee of DTC or by
a nominee of DTC to DTC or another nominee of DTC) may be registered except in
limited circumstances).
Unless this Preferred Security is presented by an authorized representative of
DTC (55 Water Street, New York), to Hvide Capital Trust or its agent for
registration of transfer, exchange or payment, and any Preferred Security issued
is registered in the name of Cede & Co. or such other name as requested by an
authorized representative of DTC and any payment hereon is made to Cede & Co. or
to such other entity as is requested by an authorized representative of DTC, ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR ORTHERWISE BY A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
HVIDE CAPITAL TRUST
6 1/2% CONVERTIBLE PREFERRED SECURITIES
(LIQUIDATION AMOUNT $50 PER PREFERRED SECURITY)
Hvide Capital Trust, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that
________________________ (the "Holder") is the registered owner of 83,000
preferred securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the Hvide Capital Trust 6 1/2%
Convertible Preferred Securities (liquidation amount $50 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Declaration (as defined herein). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Declaration of the Trust, dated as of June 27, 1997, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms of
the Preferred Securities as set forth therein. The Holder is entitled to the
benefits of the Guarantee Agreement entered into by Hvide Marine Incorporated, a
Florida corporation, and The Bank of New York, as Guarantee Trustee, dated as of
June 27, 1997 (the "Guarantee"), to the extent provided therein. The Trust will
furnish a copy of the Declaration and the Guarantee to
<PAGE>
the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY,
ISSUABLE UPON CONVERSION OR EXCHANGE OF SUCH SECURITY EXCEPT (A) TO HVIDE MARINE
INCORPORATED OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE PREFERRED SECURITIES OR THE
DEBENTURES, AS THE CASE MAY BE, (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK,
THE TRANSFER AGENT FOR THE COMMON STOCK), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE FOR THE PREFERRED SECURITIES OR THE DEBENTURES, AS THE CASE MAY BE (OR,
IF THIS CERTIFICTE EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
<PAGE>
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT). IF THIS CERTIFICATE DOES NOT
EVIDENCE COMMON STOCK AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE PREFERRED SECURITIES OR
THE DEBENTURES, AS THE CASE MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS HVIDE MARINE INCORPORATED OR THE TRUST MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATIONS UNDER
THE SECURITIES ACT.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this 27th day of June, 1997.
HVIDE CAPITAL TRUST
By:_________________________________
Name:
As Administrative Trustee
<PAGE>
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: ________________________
THE BANK OF NEW YORK,
as Property Trustee
By:_________________________________
Authorized Signatory
Exhibit 4.5
This Debenture is a Global 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 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 may not be
transferred except 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.
HVIDE MARINE INCORPORATED
CUSIP 448515 AA 4
$118,553,500
6 1/2% Convertible Subordinated Debenture due June 15, 2012
NO. 1
Hvide Marine Incorporated, a corporation organized and existing under
the laws of Florida (hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _____________________, or registered
assigns, the principal sum of _______________________ on June 15, 2012 and to
pay interest plus Additional Interest, Additional Sums and Liquidated Damages,
if any, on said principal sum from June 27, 1997 or from the most recent
Interest Payment Date on which interest has been paid or duly provided for,
quarterly until the principal hereof is paid or duly provided for or made
available for payment subject to deferral as set forth herein in arrears on
January 1, April 1, July 1 and October 1 of each year, (each such date, an
"Interest Payment Date") commencing October 1, 1997 at the rate of six and
one-half (6 1/2%) per annum, until the principal hereof shall have become due
and payable, and thereafter such interest shall be payable on demand.
Reference is hereby made to the further provisions of this Debenture as
set forth herein, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee, this Debenture shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
HVIDE MARINE INCORPORATED
[Seal] By:
Title:
Attest:
Title:
<PAGE>
This Debenture is one of a duly authorized issue of Debentures of the
Company (herein called the "Debentures") limited to the aggregate principal
amount of $118,553,500, issued and to be issued under an Indenture, dated as of
June 27, 1997 (herein called the "Indenture"), between the Company and The Bank
of New York, as Indenture Trustee (herein called the "Indenture Trustee," which
term includes any successor Indenture Trustee under the Indenture), to which the
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Indenture Trustee, the Company and the Holders of the
Debentures, and of the terms upon which the Debentures are, and are to be,
authenticated and delivered. All terms used in this Debenture that are defined
in the Indenture shall have the meanings assigned to them in the Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. In the event that any date on
which interest is payable on this Debenture is not a Business Day, then a
payment of the interest 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) with the same force and effect as if made on the date the
payment was originally payable, except that if any Interest Payment Date is in
the next succeeding calendar year, then such payment shall be made on the
immediately preceeding Business Day. A "Business Day" shall mean any day other
than a Saturday or a Sunday or a day on which banking institutions in The City
of New York are authorized or required by law or executive order to remain
closed or a day on which the Corporate Trust Office of the Indenture Trustee, or
the principal office of the Trustee under the Declaration is closed for
business. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Debenture (or one or more Predecessor
Debentures, as defined in the Indenture is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the
date which is the fifteenth day preceding such Interest Payment Date. Any such
interest installment not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Indenture Trustee,
notice whereof shall be given to Holders of Debentures not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Debentures may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.
So long as no Event of Default under the Indenture has occurred and is
continuing, the Company shall have the right under the Indenture, at any time
and from time to time, to defer the payment of interest (including any
Additional Sums or Liquidated Damages) on the Debentures for up to 20
consecutive quarters with respect to each deferral period (each such deferral
period an "Extension Period"), during which periods the Company shall have the
right not to make payments of interest on any Interest Payment Date, at the end
of which the Company shall pay all interest then accrued and unpaid (together
with Additional Interest, Additional Sums and Liquidated Damages, if any,
thereon to the extent permitted by applicable law); provided, that during any
such Extension Period, the Company shall not, and shall not permit any
Subsidiary to, (a) declare or pay any dividends or distributions on or redeem,
purchase, acquire or make a liquidation payment with respect to, any shares of
the Company's Capital Stock or (b) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem
<PAGE>
any debt securities (including guarantees of indebtedness for money borrowed) of
the Company that rank pari passu with or junior to the Debentures (other than
(i) any dividend, redemption, liquidation, interest, principal or guarantee
payment by the Company where the payment is made by way of securities (including
Capital Stock) that rank pari passu with or junior to the securities on which
such dividend, redemption, interest, principal or guarantee payment is being
made, (ii) payments under the Guarantee, (iii) purchases of Class A Common Stock
related to the issuance of Class A Common Stock under any of the Company's
benefit plans for its directors, officers or employees, (iv) as a result of a
reclassification of the Company's Capital Stock or the exchange or conversion of
one series or class of the Company's Capital Stock for another series or class
of the Company's Capital Stock and (v) the purchase of fractional interests in
shares of the Company's Capital Stock pursuant to the conversion or exchange
provisions of such Capital Stock or the security being converted or exchanged).
Prior to the termination of any such Extension Period the Company may further
extend the interest payment period, provided that no Extension Period shall
exceed 20 consecutive quarters or extend beyond the Stated Maturity of this
Debenture. Upon the termination of any such Extension Period and upon the
payment of all accrued and unpaid interest, any Additional Interest, any
Additional Sums, any Liquidated Damages and other amounts then due, the Company
may elect to begin a new Extension Period, subject to the above requirements. No
interest including Additional Interest, Additional Sums and Liquidated Damages,
if any, shall be due and payable during an Extension Period except at the end
thereof. The Company shall give the Indenture Trustee and the commercial bank or
trust company identified as trustee under the Declaration of Trust (the
"Declaration") forming Hvide Capital Trust (the "Trust") notice of its election
to begin any Extension Period at least one Business Day prior to the earlier of
(i) the record date for the date the distributions on the Preferred Securities
(or if no Preferred Securities are outstanding, for the date interest on the
Debentures) would have been payable except for the election to begin such
Extension Period and (ii) the date the trustee of the Trust is (or if no
Preferred Securities are outstanding, the Indenture Trustee is) required to give
notice to The Nasdaq National Market or other applicable self-regulatory
organizations or to holders of such Preferred Securities (or, if no Preferred
Securities are outstanding, to the holders of such Debentures) of such election.
Payment of the principal of (and premium, if any) and interest on this
Debenture will be made [Insert, if a global security is issued: to the
Depositary Trust Company or its nominee] [Insert if securities in definitive
form are issued: at the Corporate Trust Office of the Indenture Trustee in the
City of New York or at the office or agency of the Paying Agent or Paying Agents
as the Company may designate maintained for that purpose in the United States],
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts provided,
however, that at the option of the Company payment of interest may be made (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Securities Register or (ii) by wire transfer in immediately
available funds at such place and to such account as may be designated by the
Person entitled thereto as specified in the Securities Register, provided that
proper transfer instructions have been received by the Regular Record Date.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt (as defined in the Indenture), and this
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Debenture, by accepting the same, (i) agrees to and
shall be bound by such provisions, (ii) authorizes and directs the Indenture
Trustee on his behalf
<PAGE>
to take such actions as may be necessary or appropriate to effectuate the
subordination so provided and (iii) appoints the Indenture Trustee his
attorney-in-fact for any and all such purposes. Each Holder hereof, by his
acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior Debt,
whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
At any time on or after July 2, 2000, the Company may, at its option,
subject to the terms and conditions of Article 11 of the Indenture, redeem this
Debenture in whole at any time or in part from time to time, at the Redemption
Prices set forth in Section 11.7 of the Indenture.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If a Special Event shall occur and be continuing, this Debenture shall
be exchangeable for Preferred Securities in accordance with Section 11.8 of the
Indenture or, in certain circumstances, redeemable by the Company in accordance
with Section 11.7 of the Indenture.
Subject to the terms and conditions set forth in Article 13 of the
Indenture, this Debenture is convertible, at the option of the Holder hereof,
into shares of Class A Common Stock (and/or such other cash, securities or
property as then provided for by the Indenture). In order to maintain the
eligibility of the Company to operate vessels in the U.S. domestic trade, 75% of
the outstanding Capital Stock and voting power of the Company is required to be
held by U.S. citizens. As a result of this requirement, any non-citizen holder
of the Preferred Securities or the Debentures will, to the extent the conversion
thereof into shares of the Company's Class A Common Stock would cause more than
25% of the Company's outstanding Common Stock to be held by non-citizens, be
unable to convert such Preferred Securities or Debentures into shares of Class A
Common Stock and will be required to sell its Preferred Securities or Debentures
to U.S. citizens in order to realize the economic benefits, if any, of
conversion.
If an Event of Default shall occur and be continuing, the principal of
the Debentures may be declared due and payable in the manner, with the effect
and subject to the conditions provided in the Indenture.
As provided in and subject to the provisions of the Indenture, if an
Event of Default occurs and is continuing, then and in every such case the
Indenture Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Indenture Trustee if given by Holders), provided that, if upon an Event of
<PAGE>
Default, the Indenture Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Debentures fail to declare the principal of all the
Debentures to be immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of the Preferred Securities then outstanding shall
have such right by a notice in writing to the Company and the Indenture Trustee;
and upon any such declaration such principal amount (or specified amount) of and
the accrued interest (including any Additional Interest, Additional Sums and any
Liquidated Damages) on all the Debentures shall become immediately due and
payable, provided that the payment of principal and interest (including any
Additional Interest, Additional Sums and any Liquidated Damages) on such
Debentures shall remain subordinated to the extent provided in Article 12 of the
Indenture.
The Indenture contains provisions for satisfaction, discharge and
defeasance of the entire indebtedness of this Debenture upon compliance by the
Company with certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company an the rights of the Holders of the Debentures to be affected under the
Indenture at any time by the Company and the Indenture Trustee with the consent
of the Holders of a majority in principal amount of the Debentures. In addition,
without the consent of any Holder of a Debenture, the Indenture and the
Debentures may be amended and supplemented to cure any ambiguity or
inconsistency, make other changes which will not adversely affect in any
material aspect the rights of the Holders or certain other matters specified in
the Indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Debentures at the time
Outstanding, on behalf of the Holders of all Debentures, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences, and, should the Holders of the
Debentures fail to annul and rescind such declaration, the holders of a majority
in liquidation amount of the Preferred Securities then outstanding shall have
the right. Any such consent or waiver shall be conclusive and binding upon the
Holder of this Debenture and upon all future Holders of this Debenture and of
any Debenture issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or wavier is
made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest (including Additional Interest, if any, Additional Sums, if any, and
Liquidated Damages, if any) on this Debenture at the times, place and rate, and
in the coin or currency, herein prescribed.
The holders of the Preferred Securities, the Debentures, the Guarantee
and the shares of Class A Common Stock of the Company issuable upon conversion
of the Preferred Securities and Debentures (collectively, the "Registrable
Securities") are entitled to the benefits of a Registration Rights Agreement,
dated as of June 27, 1997, among the Trust, the Company and the Purchasers (the
"Registration Rights Agreement"). Pursuant to the Registration Rights Agreement,
the Company and the Trust have agreed for the benefit of the holders of
Registrable Securities that
<PAGE>
(i) the Company and the Trust will, at the Company's cost, within 90 days after
the date of issuance of the Registrable Securities, file a shelf registration
statement (the "Shelf Registration Statement ") with the Commission with respect
to the resales of the Registrable Securities, (ii) the Company will use its best
efforts to cause such Shelf Registration Statement to be declared effective by
the Commission within 150 days after the date of issuance of the Registrable
Securities and (iii) the Company will use its best efforts to maintain such
Shelf Registration Statement continuously effective under the Securities Act
until the second anniversary of the date of issuance of the Registrable
Securities or such earlier date as is provided in the Registration Rights
Agreement (the "Effectiveness Period"). The Company will be permitted to suspend
the use of the prospectus (which is a part of the Shelf Registration Statement)
in connection with sales of Registrable Securities by holders during certain
periods of time under certain circumstances relating to pending corporate
developments relating to the Company and public filings with the Commission and
similar events.
If (i) on or prior to 90 days following the date of original issuance
of the Registrable Securities, a Shelf Registration Statement has not been filed
with the Commission, or (ii) on or prior to the 150th day following such
original issuance of the Registrable Securities, such Shelf Registration
Statement is not declared effective (each such event a "Registration Default"),
additional interest ("Liquidated Damages") will accrue on the Debentures from
and including the day following such Registration Default until such time as
such Shelf Registration Statement is filed or such shelf Registration Statement
is declared effective, as the case may be. Liquidated Damages will be paid
quarterly in arrears (subject to the Company's ability to defer payment of
Liquidated Damages during any Extension Period), with the first quarterly
payment due on the first Interest Payment Date following the date on which such
Liquidated Damages begin to accrue, and will accrue at a rate per annum equal to
an additional 0.25% of the principal amount to and including the 90th day
following such Registration Default and 0.50% thereof from and after the 91st
day following such Registration Default. In the event that during the
Effectiveness Period the Shelf Registration Statement ceases to be effective, or
the Company suspends the use of the prospectus which is a part thereof, for more
than 90 days, whether or not consecutive, during any 12-month period then the
interest rate borne by the Debentures will increase by an additional 0.50% per
annum from the 91st day of the applicable 12-month period such Shelf
Registration Statement ceases to be effective or the Company suspends the use of
the prospectus which is a part thereof, as the case may be, until the earlier of
such time as (i) the Shelf Registration Statement again becomes effective, (ii)
the use of the related prospectuses ceases to be suspended or (iii) the
Effectiveness Period expires.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Securities
Register, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient
<PAGE>
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Indenture Trustee and any agent of the Company or the
Indenture Trustee may treat the Person in whose name this Debenture is
registered as the owner hereof for all purposes, whether or not this Debenture
be overdue, and neither the Company, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Debentures 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, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States Federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
A director, officer, employee, stockholder or incorporator of the
Company shall not have any liability for any obligations of the Company under
this Debenture or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting this
Debenture waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of this Debenture.
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY,
ISSUABLE UPON CONVERSION OR EXCHANGE OF SUCH SECURITY EXCEPT (A) TO HVIDE MARINE
INCORPORATED OR A SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
INSIDE THE UNITED STATES TO AN
<PAGE>
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE FOR THE PREFERRED SECURITIES OR THE DEBENTURES, AS THE CASE MAY BE, (OR,
IF THIS CERTIFICATE EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE COMMON
STOCK), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE PREFERRED SECURITIES
OR THE DEBENTURES, AS THE CASE MAY BE (OR, IF THIS CERTIFICTE EVIDENCES COMMON
STOCK, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT). IF THIS
CERTIFICATE DOES NOT EVIDENCE COMMON STOCK AND IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE PREFERRED
SECURITIES OR THE DEBENTURES, AS THE CASE MAY BE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS HVIDE MARINE INCORPORATED OR THE TRUST MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES THEREOF.
This is one of the Debentures designated therein referred to in the
within mentioned
<PAGE>
Indenture.
THE BANK OF NEW YORK,
as Indenture Trustee
By:
Authorized Signatory
Dated:
Exhibit 4.6
GUARANTEE
This GUARANTEE, dated as of June 27,, 1997, is executed and delivered
by Hvide Marine Incorporated, a Florida corporation (the "GUARANTOR"), for the
benefit of the Holders (as defined herein) from time to time of the Common
Securities (as defined herein) of Hvide Capital Trust, a Delaware statutory
business trust (the "ISSUER").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust,
dated as of even date herewith, among the Trustees named therein and the
Guarantor, as Depositor, (as may be amended or supplemented from time to time,
the "DECLARATION"), the Issuer is issuing 2,000,000 (2,300,000 if the
over-allotment option is exercised in full) of its 6 1/2% Trust Convertible
Preferred Securities (liquidation preference $50 per preferred security) (the
"PREFERRED SECURITIES") representing the preferred undivided beneficial
interests in the assets of the Issuer and having the terms set forth in the
Declaration;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together from the issuance of all of the common undivided
beneficial interests in the assets of the Issuer (the "COMMON SECURITIES") to
Guarantor, will be used to purchase the Debentures (as defined in the
Declaration) of the Guarantor, which will be deposited with The Bank of New
York, as Property Trustee, under the Declaration, as trust assets;
WHEREAS, as an incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay on a subordinated basis to the Holders of
the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a Guarantee
Agreement (the "PREFERRED GUARANTEE") in substantially identical terms to this
Guarantee for the benefit of the holders of the Preferred Securities, except
that if an event of default (as defined in the Indenture (as defined herein)),
has occurred and is continuing, the rights of holders of the Preferred
Securities to receive Guarantee Payments (as defined in the Preferred Guarantee)
under the Preferred Guarantee shall not be subordinated to the rights of Holders
of Common Securities to receive Guarantee Payments (as defined herein) under
this Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers the Guarantee for the benefit of
the Holders, from time to time, of the Common Securities as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used in this Guarantee, the terms set
forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or
<PAGE>
otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Declaration as in effect on the date
hereof.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling by or controlled by or under direct common control with
such specified Person, provided, however, that an Affiliate of the Guarantor
shall not be deemed to include the Issuer. 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.
"CLASS A COMMON STOCK" shall mean the Class A Common Stock, par value
$0.001 per share, of the Guarantor.
"DISTRIBUTIONS" means amounts payable in respect of the Preferred
Securities and the Common Securities pursuant to Section 4.1 of the Declaration.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) required to be paid on the Common
Securities, to the extent that the Issuer shall have funds on hand available
therefor at such time, (ii) the redemption price, including all accumulated and
unpaid Distributions to the date of redemption (the "REDEMPTION PRICE"), with
respect to the Common Securities called for redemption by the Issuer to the
extent the Issuer shall have funds on hand available therefor, and (iii) upon a
voluntary or involuntary dissolution, winding-up or liquidation of the Issuer,
unless Debentures are distributed to the Holders, the lesser of (a) the
aggregate of the liquidation preference of $50 per Common Security plus
accumulated and unpaid Distributions thereon to the date of payment, to the
extent the Issuer shall have funds on hand available to make such payment at
such time, 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").
"HOLDER" means any holder, as registered on the books and records of
the Issuer, of any Common Securities; provided, however, that in determining
whether the holders of the requisite percentage of Common Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor or the
Guarantee Trustee.
"INDENTURE" means the Indenture dated as of June 27, 1997, between the
Guarantor and The Bank of New York, as trustee, as amended or supplemented from
time to time, pursuant to which the Debentures were issued.
"LIST OF HOLDERS" has the meaning specified in Section
"MAJORITY IN LIQUIDATION PREFERENCE OF SECURITIES" means except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the liquidation preference of all the
outstanding Common Securities of the Issuer.
"PERSON" means any individual, corporation, partnership, trust, joint
venture, 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.
ARTICLE 2
GUARANTEE
SECTION 2.1. GUARANTEE. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert other than the defense of payment. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 2.2. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives
notice of acceptance of the 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 or
redemption and all other notices and demands.
SECTION 2.3. OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this 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 Common
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 (other than an extension of time
for payment of Distributions that results from the extension of any
interest payment period on the Debentures as so provided in the
Indenture), Redemption Price, Liquidation Distribution or any other
sums payable under the terms of the Common Securities or the extension
of time for the performance of any other obligation under, arising out
of, or in connection with, the Common Securities;
(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 Common Securities, or any action on the part of the
<PAGE>
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
Common 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 2.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders or the Trust to give notice
to, or obtain the consent of, the Guarantor with respect to the happening of any
of the foregoing.
SECTION 2.4. RIGHTS OF HOLDERS. The Guarantor expressly acknowledges
that:
(a) this Guarantee will be deposited with the Trust to be held
for the benefit of the Holders;
(b) Each Holder shall have the right to enforce this Guarantee;
(c) the Holders of a Majority in Liquidation Preference of the Common
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trust in respect of this Guarantee or
to direct the exercise of any trust or power conferred upon the Trust under this
Guarantee;
(d) any Holder may institute a legal proceeding directly against the
Guarantor to enforce such Holder's rights under this Guarantee, without first
instituting a legal proceeding against the Issuer or any other Person;
(e) if an Event of Default with respect to the Debentures constituting
the failure to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable has occurred and is continuing, the
any Holder shall have the right, which is absolute and unconditional, to proceed
directly against the Guarantor to obtain Guarantee Payments without instituting
a legal proceeding against the Issuer or any other Party ; and
(f) Guarantor hereby waives any right or remedy to require that any
action be brought against the Issuer, or any other Person, before proceeding
directly against the Issuer.
SECTION 2.5. GUARANTEE OF PAYMENT. This Guarantee creates a guarantee
of payment
<PAGE>
and not of collection. This Guarantee will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon distribution of Debentures to Holders as provided in
the Declaration.
SECTION 2.6. SUBROGATION. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee and shall have the right to
waive payment by the Issuer pursuant to Section 2.1; provided, however, that the
Guarantor shall not (except to the extent required which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee, if, at the time of any such
payment, any amounts are due and unpaid under this 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 2.7. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Common Securities and that the Guarantor shall be liable as
principal and as debt or hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 2.3.
ARTICLE 3
COVENANTS AND SUBORDINATION
SECTION 3.1. SUBORDINATION. The Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all liabilities of the Guarantor and pari passu with any guarantee
now or hereafter entered into by the Guarantor in respect of the Preferred
Securities or of any preferred or preference stock of any affiliate of the
Guarantor; provided, however, upon the occurrence and during the continuance of
an Event of Default under the Declaration, the rights of the Holders of Common
Securities to receive Guarantee Payments will be subordinated to the rights of
the holders of the Preferred Securities.
SECTION 3.2. CERTAIN COVENANTS OF THE GUARANTOR.
(a) Guarantor covenants and agrees that if and so long as (i)
the Issuer is the holder of all the Debentures, (ii) a Tax Event (as defined in
the Declaration) in respect of the Issuer has occurred and is continuing and
(iii) the Guarantor has elected, and has not revoked such election, to pay
Additional Sums (as defined in the Declaration) in respect of the Common
Securities and Preferred Securities, the Guarantor will pay to the Issuer such
Additional Sums
(b) The Guarantor covenants and agrees that it will not, and
will not permit any of its subsidiaries to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation, payment
with respect to, any of the Guarantor's capital stock or (ii) make any payment
of principal, interest or premium, if any, on or repay or repurchase or redeem
any debt securities (including guarantees of indebtedness for money borrowed) of
the Guarantor that rank pari passu with or junior to the Debentures (other than
(A) any dividend, redemption, liquidation, interest, principal or guarantee
payment by Guarantor where the payment
<PAGE>
is made by way of securities (including capital stock) that rank pari passu with
or junior to the securities on which such dividend, redemption, interest,
principal or guarantee payment is being made, (B) payments under this Agreement,
(C) purchases of Class A Common Stock related to the issuance of Class A Common
Stock under any of the Guarantor's benefit plans for its directors, officers or
employees, (D) as a result of a reclassification of the Guarantor's capital
stock or the exchange or conversion of one series or class of the Guarantor's
capital stock for another series or class of the Guarantor's capital stock and
(E) the purchase of fractional interests in shares of the Guarantor's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged) if at such time (1) there shall have
occurred and be continuing any event of which the Guarantor has actual knowledge
that, with the giving of notice or the lapse of time, or both, would constitute
an "Event of Default" under the Indenture with respect to the Debentures, (2)
the Guarantor shall be in default with respect to its payment of any obligations
under the Guarantee or (3) the Guarantor shall have given notice of its
selection of an Extension Period (as defined in the Indenture) as provided in
the Indenture with respect to the Debentures and shall not have rescinded such
notice, or such Extension Period, or any extension thereof, shall be continuing.
(c) The Guarantor covenants and agrees (i) to maintain
directly or indirectly 100% ownership of the Common Securities, provided that
certain successor Persons in transactions which are permitted by Article 8 of
the Indenture may succeed to the Guarantor's ownership of the Common Securities,
(ii) not to voluntarily terminate, wind-up or liquidate the Issuer, except (A)
in connection with a distribution of the Debentures to the holders of the Common
Securities in liquidation of the Issuer or (B) in connection with certain
mergers, consolidations or amalgamations permitted by the Declaration, (iii) to
use its reasonable efforts, consistent with the terms and provisions of the
Declaration, to cause the Issuer to remain classified as a grantor trust and not
as an association taxable as a Corporation for United States Federal Income tax
purposes, (iv) for so long as Common Securities are outstanding, not to convert
Debentures except pursuant to a notice of conversion delivered to the Conversion
Agent (as defined in the Declaration) by a Holder, (v) to maintain the
reservation for issuance of the number of shares of Class A Common Stock that
would be required from time to time upon the conversion of all the Debentures
then outstanding, (vi) to deliver shares of Class A Common Stock upon an
election by Holder to convert such Common Securities into or for Class A Common
Stock, and (vii) to honor all obligations relating to the conversion or exchange
of the Common Securities into or for Class A Common Stock or Debentures.
<PAGE>
ARTICLE 4
TERMINATION
SECTION 4.1. TERMINATION. This Guarantee shall terminate and be of no
further force and effect upon (a) full payment of the Redemption Price (as
defined in the Declaration) of all Common Securities, (b) the distribution, if
any, of Debentures to the Holders in exchange for all of the Common Securities,
(c) full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer or (d) upon the distribution, if any, of Class A
Common Stock the Holders of the Common Securities in respect of the conversion
of all such Holders' Common Securities into Class A Common Stock.
Notwithstanding the foregoing, this Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder must restore
payment of any sums paid with respect to Common Securities or this Guarantee.
ARTICLE 5
MISCELLANEOUS
SECTION 5.1. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders of the Common Securities then outstanding. Except in connection with
a consolidation, merger or sale involving the Guarantor that is permitted under
Article 8 of the Indenture and pursuant to which the assignee agrees in writing
to perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder.
SECTION 5.2. AMENDMENTS. Except with respect to any changes which do
not adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Guarantee may only be
amended with the prior approval of the Holders of not less than a Majority in
Liquidation Preference of the Securities. The provisions of Article 6 of the
Declaration concerning meetings of the Holders shall apply to the giving of such
approval.
SECTION 5.3. NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows: (a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the Holders:
Hvide Marine Incorporated
2200 Eller Drive
Fort Lauderdale, Florida 33316
Phone No.: (954) 523-2200
Facsimile No.: (954) 462-1459
Attention: General Counsel
(b) if given to the Issuer, at the Issuer's address set forth below or
such other address as the Issuer may give notice of to the Holders:
Hvide Capital Trust
c/o Hvide Marine Incorporated
2200 Eller Drive
Fort Lauderdale, Florida 33316
Phone No.: (954) 523-2200
Facsimile No.: (954) 462-1459
Attention: General Counsel
with a copy to:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Phone No.: (212) 815-5735
Facsimile No.: (212) 815-5915
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder 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 5.4. BENEFIT. This Guarantee is solely for the benefit of
the Holders and is not separately transferable from the Common Securities.
SECTION 5.5. INTERPRETATION. In this Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Guarantee but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Guarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee unless otherwise specified;
<PAGE>
(e) a reference to the singular includes the plural and vice
versa; and
(f) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 5.6. INTERPRETATION. Governing Law. THIS GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
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.
<PAGE>
THIS GUARANTEE is executed as of the day and year first above written.
HVIDE MARINE INCORPORATED
By:...................................
Name:
Title:
Exhibit 10.1
HVIDE CAPITAL TRUST
2,000,000
6 1/2% Trust Convertible Preferred Securities
(Liquidation Amount $50 Per Preferred Security)
June 27, 1997
REGISTRATION RIGHTS AGREEMENT
Donaldson, Lufkin & Jenrette
Securities Corporation
Howard, Weil, Labouisse, Friedrichs Incorporated
Raymond James & Associates, Inc.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Hvide Capital Trust, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), and Hvide Marine Incorporated, a Florida
corporation, as depositor of the Trust and as guarantor (the "Company"),
proposes to issue and sell to the Purchasers (as defined herein), upon the terms
set forth in the Purchase Agreement (as defined herein) an aggregate of
2,000,000 and, at the election of the Purchasers, up to an additional 300,000 of
6 1/2% Trust Convertible Preferred Securities (liquidation amount $50 per
preferred security) (the "Preferred Securities") of the Trust. The Preferred
Securities are guaranteed on a subordinated basis by the Company as to the
payment of distributions, and as to payments on liquidation or redemption, to
the extent set forth in a guarantee agreement (the "Guarantee") between the
Company and The Bank of New York, as guarantee trustee, and may be converted or
exchanged under certain circumstances into 6 1/2% Convertible Subordinated
Debentures due 2012 of the Company (the "Debentures") held by the Trust and then
into Class A Common Stock, par value $0.001 per share ("Class A Common Stock"),
of the Company. The Preferred Securities, the Debentures, the Guarantee and the
Class A Common Stock issuable upon conversion or exchange of the Preferred
Securities and/or the Debentures are referred to collectively as the
"Securities." As an inducement to the Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the
Purchasers thereunder, the Trust and the Company each agree with the Purchasers
for the benefit of Holders (as defined herein) as follows:
1. DEFINITIONS. (a) Capitalized terms used herein without definition
shall have the meanings ascribed thereto in the Purchase Agreement. As used in
this Registration Rights Agreement, the following defined terms shall have the
following meanings:
<PAGE>
"Act" or "Securities Act" means the Securities Act of 1933, as amended,
and the rules promulgated thereunder.
"Affiliate" of any specified person means any other person which,
directly or indirectly is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Commission" means the Securities and Exchange Commission.
"Declaration" means the Amended and Restated Declaration of Trust,
dated as of June 27, 1997, among Hvide Marine Incorporated, as Depositor, The
Bank of New York, as Trustee, The Bank of New York (Delaware), as Delaware
Trustee, and the Company Trustees named therein, relating, among other things,
to the Preferred Securities, as amended and supplemented from time to time in
accordance with its terms.
"DTC" means the Depository Trust Company.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i).
"Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(3).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules promulgated thereunder.
"Holder" means, when used with respect to any Security, the holder of
such Security. For all purposes of this Agreement, the Company shall be entitled
to treat the record owner of a Security as the beneficial owner of such Security
unless the Company has been given written notice of the existence and identity
of a different beneficial owner.
"Indenture" means the Convertible Subordinated Indenture, dated as of
June 27, 1997, between the Company and The Bank of New York, as indenture
trustee, as amended and supplemented from time to time in accordance with its
terms.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
<PAGE>
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act) included in the
Shelf Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Shelf Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act.
"Purchase Agreement" means the purchase agreement dated June 24, 1997
among the Purchasers, the Trust and the Company.
"Purchasers" means the Purchasers named in Schedule I to the Purchase
Agreement.
"Registrable Securities" means all or any portion of the Securities
issued from time to time; provided, however, that a security ceases to be a
Registrable Security when it is no longer a Restricted Security.
"Restricted Security" means any and all of the Securities except any
such Securities which (i) have been effectively registered under the Securities
Act and sold in a manner contemplated by the Shelf Registration Statement, (ii)
have been transferred in compliance with Rule 144 under the Securities Act (or
any successor provision thereto) or are transferable pursuant to Rule 144(k) (or
any successor provision thereto), (iii) have been sold in compliance with
Regulation S under the Securities Act (or any successor thereto) and does not
constitute the unsold allotment of a distributor within the meaning of
Regulation S under the Securities Act, or (iv) have otherwise been transferred
and a new Security not subject to transfer restrictions under the Securities Act
has been delivered by or on behalf of the Company in accordance with the terms
of the Declaration or the Indenture, as the case may be.
"Rules" means the published rules of the Commission promulgated under
the Securities Act or the Exchange Act, as in effect at any relevant time.
"Securities" means the Preferred Securities, the Debentures, the
Guarantee and the Class A Common Stock issuable upon conversion or exchange of
the Preferred Securities and/or the Debentures.
"Shelf Registration" means a registration effected pursuant to Section
2.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company and the Trust
pursuant to the provisions of Section 2, including the Prospectus contained
therein, any amendments and supplements to such registration
<PAGE>
statement, including post effective amendments, and all exhibits and all
material incorporated by reference in such registration statement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.
"Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to a percentage of
the "principal amount" of Registrable Securities or to a percentage of
Registrable Securities, the Preferred Securities and the Debentures issuable
upon conversion or exchange of the Preferred Securities will be treated as the
same class of Securities and Class A Common Stock shall be treated as
representing the liquidation amount of Preferred Securities or the principal
amount of Debentures which was surrendered for conversion or exchange in order
to receive such number of shares of Class A Common Stock.
2. SHELF REGISTRATION.
(a) The Company and the Trust shall, within 90 calendar days following
the first Time of Delivery (as defined in the Purchase Agreement), file with the
Commission a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities and, thereafter, each of the Company and the Trust shall
use their respective best efforts to cause such Shelf Registration Statement to
be declared effective under the Act within 150 calendar days after the Time of
Delivery; provided, however, that no Holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the
Prospectus forming a part thereof for resales of Registrable Securities unless
such Holder is an Electing Holder.
(b) Each of the Company and the Trust shall use their respective best
efforts:
(i) To keep the Shelf Registration Statement continuously
effective (subject to any Suspension Period (as defined below)) in
order to permit the Prospectus forming part thereof to be usable by
Electing Holders for resales of Registrable Securities for a period
that will terminate upon the earlier of the following: (A) when all of
the Preferred Securities covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement; (B) when
all of the Debentures issued to Holders in respect of Preferred
Securities that had not been sold pursuant to the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement;
(C) when all of the shares of Class A Common Stock issued upon
conversion of any such Preferred Securities or any such Debentures that
have not been sold pursuant to the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement; and (D) when,
in written opinion of counsel to the Trust and the Company, all
outstanding Registrable Securities held by persons which are not
affiliates of the Trust or the Company may be resold without
registration under the Act pursuant to Rule 144(k) under the Act or any
successor provision thereto (in any such case, such period being called
the "Effectiveness Period").
<PAGE>
(ii) After the Effective Time of the Shelf Registration
Statement, reasonably promptly upon the request of any Holder that is
not then an Electing Holder identified as a selling securityholder in
the Prospectus at the Effective Time, to take any action reasonably
necessary to enable such Holder to use the Prospectus forming a part
thereof for resales of Registrable Securities, including, without
limitation, any action necessary to identify such Holder as a selling
securityholder in the Shelf Registration Statement; provided, however,
that nothing in this Section 2(b) shall relieve such Holder of the
obligation to return a completed and signed Notice and Questionnaire to
the Trust in accordance with Section 3(a)(2) and to provide to the
Trust and the Company, in writing, any information with respect to such
Holder or the Registrable Securities held by such Holder as is, in the
reasonable opinion of counsel to the Trust or the Company, required
under applicable law to enable such Holder to use such Prospectus for
resales of such Registrable Securities; and
(iii) If at any time prior to the end of the Effectiveness
Period, the Preferred Securities are convertible into securities other
than Class A Common Stock, the Company and the Trust shall, or shall
cause any successor under the Declaration to, cause such securities to
be included in the Shelf Registration Statement no later than the date
on which the Preferred Securities may then be convertible into such
securities.
(c) If (i) on or prior to the date 90 days after the Time of Delivery a
Shelf Registration Statement has not been filed with the Commission or (ii) on
or prior to the date 150 days after the last Time of Delivery such Shelf
Registration Statement has not been declared effective (each such event, a
"Registration Default"), additional interest ("Liquidated Damages") will accrue
on the Debentures, and, accordingly, additional distributions will accrue on the
Preferred Securities, from and including the day following such Registration
Default until such date as the Shelf Registration Statement is filed or declared
effective, as the case may be. Liquidated Damages will be paid quarterly in
arrears (subject to the Company's right to defer the payment of Liquidated
Damages during any Extension Period (as defined in the Indenture)), with the
first quarterly payment due on the first interest or distribution payment date,
as applicable, following the date on which such Liquidated Damages begin to
accrue, and will accrue at a rate per annum equal to an additional one-quarter
of one percent (0.25%) of the principal amount or liquidation amount, as
applicable, to and including the 90th day following such Registration Default
and one-half of one percent (0.50%) thereof from and after the 91st day
following such Registration Default. In the event that the Shelf Registration
Statement ceases to be effective during the Effectiveness Period for more than
90 days, whether or not consecutive, during any 12-month period, then the
interest rate borne by the Debentures and the distribution rate borne by the
Preferred Securities will each increase by an additional one-half of one percent
(0.50%) per annum from the 91st day of the applicable 12-month period such Shelf
Registration Statement ceases to be effective until such time as the earlier to
occur of the Shelf Registration Statement again becoming effective and the end
of the Effectiveness Period.
(d) Each of the Company and the Trust shall be deemed not to have used
their respective best efforts to keep the Shelf Registration Statement effective
during the Effectiveness Period if either the Trust or the Company voluntarily
takes any action that
<PAGE>
would result in Electing Holders not being able to offer and sell any of their
Registrable Securities during such period, unless such action is required by
applicable law. Any such period during which the Company and the Trust are
permitted to suspend the effectiveness of the Shelf Registration Statement is
referred to herein as the "Suspended Period."
3. REGISTRATION PROCEDURES. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a)(1) The Company shall not be required to take any action to
name such Holder as a selling securityholder in the Shelf Registration Statement
or to enable such Holder to use the Prospectus forming a part thereof for
resales of Registrable Securities until such Holder has returned a completed and
signed Notice and Questionnaire to the Company and the Trust and provided to the
Trust and the Company such information with respect to such Holder or the
Registrable Securities held by such Holder as is, in the reasonable opinion of
counsel to the Trust or the Company, required to enable such Holder to use the
Prospectus for resales of Registrable Securities.
(2) Not less than 30 calendar days prior to the Effective Time of the Shelf
Registration Statement, the Company or the Trust shall mail the Notice and
Questionnaire to each Holder. No Holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement as of the Effective
Time, and no Holder shall be entitled to use the Prospectus forming a part
thereof for resales of Registrable Securities at any time, unless such Holder
has returned a completed and signed Notice and Questionnaire to the Company and
the Trust and provided to the Trust and the Company such information with
respect to such Holder of the Registrable Securities held by such Holder as is,
in the reasonable opinion of counsel to the Trust or the Company, required to
enable such Holder to use the Prospectus for resales of Registrable Securities;
provided, however, only Holders who have completed and returned the Notice and
Questionnaire and any such additional information requested of such Holder to
the Company on or before the day that is ten days prior to the Effective Time
shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement as of the Effective Time.
(3) The term "Electing Holder" shall mean any Holder that has returned a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(a)(1) or 3(a)(2) and provided to the Trust and the Company such
information with respect to such Holder or the Registrable Securities held by
such Holder as is, in the reasonable opinion of counsel to the Trust or the
Company, required to enable such Holder to use the Prospective for resales of
Registrable Securities.
(b) The Company and the Trust shall furnish to each Electing
Holder, prior to the Effective Time, a copy of the Shelf Registration
Statement initially filed with the Commission, and shall reasonably
promptly furnish to such Holders, copies of each amendment thereto and
each amendment or supplement, if any, to the Prospectus included
therein and shall consider in good faith for inclusion in each such
document, at the Effective Time such comments as such Holders or their
counsel reasonably may propose; provided, however, that the Company's
obligations set forth in this Section 3(b) shall not require the
Company to delay or postpone the Effective Time or prevent the Company
from otherwise requesting the acceleration of the effectiveness of the
Shelf Registration Statement.
<PAGE>
(c) The Company and the Trust shall promptly take such action
as may be necessary so that (i) each of the Shelf Registration
Statement and any amendment thereto and the Prospectus forming part
thereof and any amendment or supplement thereto (and each report or
other document incorporated therein by reference in each case) complies
in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) each of the Shelf Registration Statement
and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (iii) each of the Prospectus forming part of
the Shelf Registration Statement, and any amendment or supplement to
such Prospectus, does not at any time during the Effectiveness Period
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(d)(1) The Company shall promptly advise the Purchasers and,
in the case of clause (i), the Electing Holders and, if requested by
the Purchasers or any such Electing Holder, confirm such advice in
writing:
(i) when the Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when
the Shelf Registration Statement or any post-effective
amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the
Prospectus included therein or for additional information.
(2) The Company shall promptly advise each Electing Holder of:
(i) the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for such
purpose;
(ii) the receipt by the Company or the Trust of any
notification with respect to the suspension of the
qualification of the securities included in the Shelf
Registration Statement for sale in any jurisdiction of the
initiation of any proceeding for such purpose; and
(iii) the happening of any event that requires the making
of any changes in the Shelf Registration Statement or the
Prospectus included therein so that, as of such date, such
Shelf Registration Statement and Prospectus do not contain an
untrue statement of a material fact and do not omit to state a
material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in
the light of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an
instruction to suspend the use of the Prospectus until the
requisite changes have been made).
(e)Each of the Company and the Trust shall use their
respective
<PAGE>
best efforts to prevent the issuance, and if issued to obtain the
withdrawal, of any order suspending the effectiveness of the Shelf
Registration Statement at the earliest possible time.
(f) The Company and the Trust shall furnish to each Electing
Holder, without charge, at least one copy of the Shelf Registration
Statement and all post-effective amendments thereto, including
financial statements and schedules, and, if such Holder so requests in
writing, all reports, other documents and exhibits that are filed with
or incorporated by reference in the Shelf Registration Statement.
(g) The Company and the Trust shall, during the Effectiveness
Period, deliver to each Electing Holder, without charge, as many copies
of the Prospectus (including each preliminary Prospectus) included in
the Shelf Registration Statement and any amendment or supplement
thereto as such Electing Holder may reasonably request; and the Company
and the Trust each consents (except during the continuance of any event
described in Section 3(d) (2) (iii) or during any Suspension Period) to
the use of the Prospectus and any amendment or supplement thereto by
each of the Electing Holders in connection with the offering and sale
of the Registrable Securities covered by the Prospectus and any
amendment or supplement thereto during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant
to the Shelf Registration Statement, the Company and the Trust shall
(1) register or qualify or cooperate with the Electing Holders and
their respective counsel in connection with the registration of
qualification of such Registrable Securities for offer and sale under
the securities or "blue sky" laws of such jurisdictions within the
United States as any Electing Holder may reasonably request, (2) keep
such registrations or qualifications in effect (subject to any
Suspension Period) and comply with such laws so as to permit the
continuance of offers and sales in such jurisdictions for so long as
may be necessary to enable any Electing Holder or underwriter, if any,
to complete its distribution of Registrable Securities pursuant to the
Shelf Registration Statement, and (3) take any and all other actions
necessary or advisable to enable the disposition in all other actions
necessary or advisable to enable the disposition in such jurisdiction
of such Registrable Securities; provided, however, that in no event
shall the Company or the Trust be obligated to (i) qualify generally to
do business or as a foreign corporation or as a dealer in securities in
any jurisdiction where each would not otherwise be required to so
qualify but for this Section 3(h), (ii) file any general consent to
service of process in any jurisdiction where it is not as of the date
hereof so subject or (iii) subject itself to taxation in any
jurisdiction where it is not otherwise so subject.
(i) Unless any Registrable Securities shall be in book-entry
only form, the Company and the Trust shall cooperate with the Electing
Holders to facilitate the time by preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to
the Shelf Registration Statement free of any restrictive legends and in
such permitted denominations and registered in such names as Electing
Holders may request in connection with the sale of
<PAGE>
Registrable Securities pursuant to the Shelf Registration Statement.
(j) Upon the occurrence of any event contemplated by
paragraph 3(d)(2)(iii), the Company and the Trust shall promptly
prepare a post-effective amendment or supplement to the Shelf
Registration Statement or the Prospectus, or any document incorporated
therein by reference, or file any other required document so that, as
thereafter delivered to purchasers of the Registrable Securities
included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading (except, in each case, for an untrue
statement of a material fact or omission of a material fact made in
reliance on and in conformity with written information furnished to the
Trust or the Company by or on behalf of any Electing Holders). Upon
receipt of written notice from the Company or the Trust of the
occurrence of any event contemplated by Section 3(d)(2)(iii) or of any
Suspension Period, each Holder shall forthwith discontinue disposition
of Registrable Securities until such Holder has received copies of the
supplemental or amended Prospectus required by this Section 3(j), or
until such Holder is advised by the Company or the Trust that the use
of the Prospectus may be resumed and, if so directed by the Company,
such Holder shall deliver to the Company (at the Company's expense) all
copies then in such Holder's possession of the Prospectus covering such
Registrable Securities current at the time of such notice.
(k) Not later than the effective date of any Shelf
Registration Statement hereunder, the Company and the Trust shall each
provide a CUSIP number for the Preferred Securities registered under
such Shelf Registration Statement; in the event of and at the time of
any distribution of the Debentures to Holders, the Company and the
Trust shall provide a CUSIP number for the Debentures and provide the
applicable trustees with certificates for such Registration Securities,
in a form eligible for deposit with DTC.
(l) Each of the Company and the Trust shall use their
respective best efforts to comply with all applicable Rules, and to
make generally available to its securityholders as soon as practicable,
but in any event not later than 15 months after (i) the effective date
(as defined in Rule 158(c) under the Securities Act) of the Shelf
Registration Statement, (ii) the effective date of each post effective
amendment to the Shelf Registration Statement, and (iii) the date of
each filing by the Company with the Commission of an Annual Report on
Form 10-K that is incorporated by reference in the Shelf Registration
Statement, an earnings statement of the Company and its subsidiaries
complying with Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder (including, at the option of
the Company, Rule 158).
(m) Each of the Company and the Trust shall use their
respective best efforts to cause the Indenture, the Declaration and the
Guarantee to be qualified under the Trust Indenture Act in a timely
manner.
(n) In the event of an underwritten offering conducted
pursuant to Section 6, the Company and the Trust shall, if requested,
promptly include or
<PAGE>
incorporate in a Prospectus supplement or post-effective amendment to
the Shelf Registration Statement such information as the Managing
Underwriters reasonably agree should be included therein and to which
the Company does not reasonably object and shall make all required
filings of such Prospectus supplement or post-effective amendment as
soon as practicable after it is notified of the matters to be included
or incorporated in such Prospectus supplement or post-effective
amendment.
(o) The Company and the Trust shall enter into such customary
agreements (including an underwriting agreement in customary form in
the event of an underwritten offering conducted pursuant to Section 6)
and take all other appropriate action in order to expedite and
facilitate the registration and disposition of the Registrable
Securities, and in connection therewith, if an underwriting agreement
is entered into, causes the same to contain indemnification provisions
and procedures reasonably similar to those set forth in Section 5 with
respect to all parties to be indemnified pursuant to Section 5.
(p) Each of the Company and the Trust shall:
(i)(A) make reasonably available for
inspection by Electing Holders, any underwriter participating
in any disposition pursuant to such Shelf Registration
Statement, and any attorney, accountant, expert or other agent
retained by such Holders or any such underwriter all relevant
financial and other records, pertinent corporate or other
documents and properties of the Company, its subsidiaries and
the Trust, and (B) cause the officers, directors, employees,
trustees and agents of the Company and the Trust to supply all
information reasonably requested by such Holders or any such
underwriter, attorney, accountant, expert or agent in
connection with the Shelf Registration Statement, in each
case, as is customary for similar due diligence examinations;
provided, however, that each Electing Holder and its
representatives and agents shall execute an agreement (in form
reasonably acceptable to the Company) providing that all
records, information and documents that are designated in
writing by the Company and the Trust, in good faith, as
confidential shall be kept confidential by such Holders and
any such underwriter, attorney, accountant, expert or agent,
unless such disclosure is made in connection with a court
proceeding or required by law, or such records, information or
documents become available to the public generally or through
a third party without an accompanying obligation of
confidentiality; and provided further that, if the foregoing
inspection and information gathering would, in the Company's
reasonable judgment, disrupt the Company's conduct of its
business, such inspection and information gathering shall be
coordinated on behalf of the Electing Holders and the other
parties entitled thereto by one counsel designated by and on
behalf of Electing Holders and other parties (the fees and
expenses of such counsel to be borne by such Electing Holders
except to the extent set forth in Section 4);
(ii) in connection with any underwritten offering
conducted pursuant to Section 6, make such representations and
warranties to the
<PAGE>
Holders participating in such underwritten offering and to the
Managing Underwriters, in form, substance and scope as are
customarily made by the Company and the Trust to underwriters
in primary underwritten offerings of equity and convertible
preferred and debt securities and covering matters including,
but not limited to, those set forth in the Purchase Agreement;
(iii) in connection with any underwritten offering
conducted pursuant to Section 6, obtain opinions of counsel to
the Company and the Trust (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to
the Managing Underwriters) addressed to each Holder
participating in such underwritten offering and the
underwriters, covering such matters as are customarily covered
in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by such Holders and
underwriters (it being agreed that the matters to be covered
by such opinions shall include, without limitation, as of the
date of the opinion and as of the Effective Time of the Shelf
Registration Statement or most recent post-effective amendment
thereto, as the case may be, the absence from the Shelf
Registration Statement and the Prospectus, including the
documents incorporated by reference therein, of an untrue
statement of a material fact or the omission of a material
fact required to be stated therein or necessary to make the
statements therein not misleading;
(iv) in connection with any underwritten offering
conducted pursuant to Section 6, obtain "cold comfort" letters
and updates thereof from the independent public accountants of
the Company and the Trust, addressed to each Holder
participating in such underwritten offering (if such Holder
has provided such letter, representations or documentation, if
any, required for such "cold comfort" letter to be so
addressed) and the underwriters, in customary form and
covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten
offerings; and
(v) deliver such documents and certificates as may be
reasonably requested by any Holders participating in such
underwritten offering and the Managing Underwriters, if any,
including, without limitation, certificates to evidence
compliance with Section 3(j) and with any conditions contained
in the underwriting agreement or other agreements entered into
by the Company and the Trust.
(q) Each of the Company and the Trust will each use their
respective best efforts to cause the Class A Common Stock issuable upon
conversion of the Preferred Securities to be listed for quotation on
The Nasdaq National Market or other stock exchange or trading system on
which the Class A Common Stock primarily trades on or prior to the
Effective Time of the Shelf Registration Statement hereunder.
(r) Each of the Company and the Trust shall use their
respective best efforts to take all other steps necessary to effect the
registration, offering and
<PAGE>
sale of the Registrable Securities covered by the Shelf Registration
Statement contemplated hereby.
(s) Upon receipt of written notice from the Company that a
Suspension Period is in effect, each Holder shall forthwith discontinue
disposition of Registrable Securities until such Holder has received
copies of the supplemental or amended Prospectus required by Section
3(j), or until such Holder is advised in writing by the Company that
the use of the Prospectus may be resumed, and, if so directed by the
Company, such Holder shall deliver to the Company (at the Company's
expense) all copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of
such notice.
4. REGISTRATION EXPENSES. The Company and the Trust shall bear all fees and
expenses customarily borne by issuers in a non-underwritten secondary offering
by selling securityholders or in an underwritten offering, as the case may be,
incurred in connection with the performance of its obligations under Section 2,
3 and 6. In addition, in the event of an underwritten offering of Registrable
Securities conducted pursuant to Section 6, or if in any other event the Company
requires that inspection and information gathering be coordinated by counsel for
the Electing Holders as provided in Section 3(p)(i), the Company shall pay the
reasonable fees and expenses of one counsel selected by the Electing Holders of
not less than 25% of the Registrable Securities to be included in such
underwritten offering (or, in any such other event, included in the Shelf
Registration Statement) to represent them.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2, and in consideration of the
agreements of the Electing Holders and any underwriters, selling agents or other
securities professionals contained in Section 5(b), the Company and the Trust
jointly and severally shall, and each hereby agrees to, indemnify and hold
harmless each Electing Holder and each underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of
Registrable Securities, and each of their respective officers and directors and
each person who controls such Electing Holder, underwriter, selling agent or
other securities professional within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes referred
to as an "Indemnified Person") against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement under which such Registrable
Securities are to be registered under the Securities Act, or any Prospectus
contained therein or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Company and the Trust hereby agree to reimburse such
Indemnified Person for any reasonable legal or other out-of-pocket expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company or the Trust shall not be liable to any such Indemnified Person in any
such case to the
<PAGE>
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such Shelf Registration Statement or Prospectus, or amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company or the Trust by such Indemnified Person expressly for
use therein. The foregoing notwithstanding, the Trust and the Company shall not
be liable to the extent that such losses, claims, damages or liabilities arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Prospectus that is a preliminary
prospectus if (i) such Indemnified Person failed to send or deliver a copy of
the Prospectus with or prior to the delivery of written confirmation of the sale
of Registrable Securities giving rise to such losses, claims, damages or
liabilities and (ii) the Prospectus would have corrected such untrue statement
or omission. In addition, the Trust and the Company shall not be liable to the
extent that any such losses, claims, damages or liabilities arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission in a Prospectus (A) if such untrue statement or omission or
alleged untrue statement or omission is corrected in an amendment or supplement
to such Prospectus and (B) having previously been furnished by or on behalf of
the Trust or the Company with copies of the Prospectus as amended or
supplemented, such Indemnified Person thereafter fails to deliver such
Prospectus as so amended or supplemented prior to or concurrently with the sale
to the person who purchased a Registrable Security from such Indemnified
Personand who is asserting such losses, claims, damages or liabilities.
(b) Indemnification by the Holders and any Agents and Underwriters.
Each Electing Holder agrees, as a consequence of the inclusion of any of such
Holder's Registrable Securities in such Shelf Registration Statement, and each
underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company and
the Trust, its directors, trustees, agents and officers who sign any Shelf
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively referred to as the "Indemnified Party"), against any
losses, claims, damages or liabilities to which the Company or such other
persons may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such Shelf Registration Statement or Prospectus,
or any amendment or supplement, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or the Trust by
such Holder, underwriter, selling agent or other securities professional
expressly for use therein, and (ii) reimburse the Company and the Trust for any
reasonable legal or other out-of-pocket expenses reasonably incurred by the
Company and the Trust in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Notices of Claims, Etc. If any action or proceeding (including any
governmental investigation or inquiry) shall be brought or asserted against an
Indemnified
<PAGE>
Person under Section 5(a) or an Indemnified Party under Section 5(b)
(collectively referred to as the "Indemnified Holder") in respect of which
indemnity may be sought, such Indemnified Holder shall promptly notify the
indemnifying Company and Trust under Section 5(a) and the indemnifying Electing
Holders under Section 5(b) (collectively the "Indemnifying Party") in writing
(provided that the failure to give such notice shall not relieve the
Indemnifying Party of its obligations pursuant to this Agreement unless and only
to the extent that such omission results in the loss or compromise of any
material rights or defenses by the Indemnifying Party, as determined by a court
of competent jurisdiction by final judgment), and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Holder and the payment of all expenses in
connection therewith; but the omission so to notify the Indemnifying Party shall
not relieve it from any liability which it may have to any Indemnified Holder
otherwise than under this Section 5. Such Indemnified Holder shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such separate counsel shall be the
expense of such Indemnified Holder unless (i) the Indemnifying Party has agreed
to pay such fees and expenses, (ii) the Indemnifying Party shall have failed to
promptly assume the defense of such action or proceeding or has failed to employ
counsel reasonably satisfactory to such Indemnified Holder in any such action or
proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both such Indemnified Holder and the
Indemnifying Party, and such Indemnified Holder shall have been advised by
counsel that there may be one or more legal defenses availabe to such
Indemnified Holder that are different from or additional to those available to
the Indemnifying Party or that a conflict may exist between the Indemnified
Holder and the Indemnifying Party. If such Indemnified Holder notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party as permitted by the provisions of the
preceding sentence, the Indemnifying Party shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Holder.
The foregoing notwithstanding, the Indemnifying Party shall not be liable for
the reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) at any time for such Indemnified Holder and any
other Indemnified Holders (which firm shall be designated in writing by such
Indemnified Holders) in connection with any one such action or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances. The
Indemnifying Party shall not be liable for any settlement of any such action or
proceeding effected without the Indemnifying Party's prior written consent, and
the Indemnifying Party agrees to indemnify and hold harmless any Indemnified
Holder from and against any loss, damage, liability or expense by reason of any
settlement of any action effected with the written consent of the Indemnifying
Party. No Indemnifying Party shall, without the written consent of the
Indemnified Holder (which consent shall not be unreasonably withheld), effect
the settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Holder is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment includes an unconditional release
of the Indemniied Holder from all liability arising out of such action or claim.
(d) Contribution. If the indemnification provided for in this Section
5 is
<PAGE>
unavailable to an Indemnified Holder under Section 5(a) or (b) in respect of any
losses, claims, damages or liabilities (or actions in respect thereof) referred
to therein, then each Indemnifying Party shall contribute to the amount paid or
payable by such Indemnified Holder as a result of such losses, claims, damages
or liabilities (or actions in respect thereof)in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Holder in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative fault of
such Indemnifying Party and Indemnified Holder shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such Indemnifying Party or by such Indemnified
Holder, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
Section 5(d) were determined by pro rata allocation (even if the Electing
Holders or any underwriters, selling agents or other securities professionals or
all of them were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in this Section 5(d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending any such action or claim. The obligations of the
Electing Holders and anyunderwriters, selling agents or other securities
professionals in this Section 5(d) to contribute shall be several in proportion
to the percentage of principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) Limitations on Liability. Notwithstanding any other provision of
this Section 5, in no event will any (i) Electing Holder be required to
undertake liability to any person under this Section 5 for any amounts in excess
of the dollar amount of the proceeds to be received by such Holder from the sale
of such holder's Registrable Securities (after deducting any fees, discounts and
commissions applicable thereto) pursuant to any Shelf Registration Statement
under which such Registrable Securities are to be registered under the
Securities Act and (ii) underwriter, selling agent or other securities
professional be required to undertake liability to any person hereunder for any
amounts in excess of the discount, commission or other compensation payable to
such underwriter, selling agent or other securities professional with respect to
the Registrable Securities underwritten by it and distributed to the public.
(f) Other Liabilities. The obligations of the Company and the Trust
under this Section 5 shall be in addition to any liability which the Company and
the Trust may otherwise have to any Indemnified Person and the obligations of
any Indemnified Person under this Section 5 shall be in addition to any
liability which such Indemnified Person may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company,
each Company Trustee of the Trust and to each person, if any, who controls the
Trust and the Company within the meaning of the Act. The remedies provided in
this Section 5 are not exclusive and shall not limit any rights or
<PAGE>
remedies which may otherwise be available to an indemnified party at law or in
equity.
6. UNDERWRITTEN OFFERING. Any Electing Holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that (a) the Holders of at least a majority in
aggregate principal amount of the outstanding Registrable Securities shall
request such an offering and (b) at least such aggregate principal amount of
such Registrable Securities shall be included in such offering; and, provided
further, that the Company shall not be obligated to cooperate with more than one
underwritten offering during the Effectiveness Period. Upon receipt of such a
request, the Company and the Trust shall provide all Holders of Registrable
Securities written notice of the request, which notice shall inform such Holders
that they have the opportunity to participate in the offering. In any such
underwritten offering, the investment bank or banks and manager or managers that
will administer the offering will be selected by, and the underwriting
arrangements with respect thereto (including, subject to clause (b) above, the
size of the offering) will be approved by the Holders of a majority of the
Registrable Securities to be included in such offering; provided, however, that
such investment bankers and managers and underwriting arrangements must be
reasonably satisfactory to the Company and the Trust. No Holder may participate
in any underwritten offering contemplated hereby unless (a) such Holder agrees
to sell such Holder's Registrable Securities to be included in the underwritten
offering in accordance with any approved underwriting arrangements, (b) such
Holder completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such approved underwriting arrangements, and (c) if
such Holder is not then an Electing Holder, such Holder returns a completed and
signed Notice and Questionnaire to the Company and the Trust in accordance with
Section 3(a)(2) (but in no event later than 10 days prior to commencement of the
underwritten offering) and provides to the Trust and the Company, in writing,
any information with respect to such Holder or the Registrable Securities held
by such Holder as is, in the reasonable opinion of counsel to use such
Prospectus for resales of such Registrable Securities, each within a reasonable
amount of time before such underwritten offering. The Holders participating in
any underwritten offering shall be responsible for any underwriting discounts
and commissions and fees and, subject to Section 4, expenses of their own
counsel. The Company and the Trust shall pay all expenses customarily borne by
issuers, including but not limited to filing fees, the fees and disbursements of
its counsel and independent public accountants and any printing expenses
incurred in connection with such underwritten offering. Notwithstanding the
foregoing or the provisions of Section 3(n), upon receipt of a request from the
Managing Underwriter or a representative of Holders of a majority of the
Registrable Securities to be included in an underwritten offering to prepare and
file an amendment or supplement to the Shelf Registration Statement and
Prospectus in connection with an underwritten offering, the Company and the
Trust may delay the filing of any such amendment or supplement for up to 90 days
if the Board of Directors of the Company shall have determined in good faith
that the Company has a bona fide business reason for such delay.
7. MISCELLANEOUS.
(a) Other Registration Rights. The Company may grant
registration rights that would permit any Person that is a third party the
right to piggyback on any Shelf
<PAGE>
Registration Statement, provided that if the Managing Underwriter of any
underwritten offering conducted pursuant to Section 6 notifies the Company and
the Electing Holders that the total amount of securities which the Electing
Holders and the holders of such piggyback rights intend to include in any Shelf
Registration Statement is so large as to materially threaten the success of such
offering (including the price at which such securities can be sold), then the
amount, number or kind of securities to be offered for the account of holders of
such piggyback rights will be reduced to the extent necessary to reduce the
total amount of securities to be included in such offering to the amount, number
and kind recommended by the Managing Underwriter prior to any reduction in the
amount of Registrable Securities to be included in such Shelf Registration
Statement; provided, however, that if the holders of piggyback registration
rights intend to include shares in any Shelf Registration Statement held by
persons granted registration rights under that certain Registration Rights
Agreement, dated as of August 14, 1996, by and between the Company and the
shareholders identified therein (the "1996 Agreement") or that certain Asset
Sale Agreement by and between Wellington Capital Limited and the Company, dated
May 14, 1997 (the "GMMOS Agreement"), the inclusion of such shares in the Shelf
Registration Statement by such persons shall be subject to the provisions of
Section 3(d) of the 1996 Agreement and the provisions of Section 3.4(b) of the
GMMOS Agreement, as applicable.
(b) Amendments and Waivers. This Agreement, including this Section
7(b), may be amended, and waivers or consents to departures from the provisions
hereof may be given, only by a written instrument duly executed by the Company
and the Holders of a majority in aggregate principal amount of Registrable
Securities then outstanding. Each Holder of Registrable Securities outstanding
at the time of any such amendment, waiver or consent or thereafter shall be
bound by any amendment, waiver or consent effected pursuant to this Section
7(b), whether or not any notice, writing or marking indicating such amendment,
waiver or consent appears on the Registrable Securities or is delivered to such
Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-deliver, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at such address set forth on the
record books of the Company or the Trust, as the case may be;
(ii) if to the Purchasers, initially at the address set
forth in the Purchase Agreement; and
(iii) if to the Company or the Trust, initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have duly given when
received. The Purchasers or the Company and the Trust by notice to the other may
designate additional or different addresses for subsequent actions or
communications.
(d) Parties in Interest. The parties to this Registration Rights
Agreement intend that all Holders of Registrable Securities shall be entitled to
receive the benefits
<PAGE>
of this Registration Rights Agreement and that any Electing Holder shall be
bound by the terms and provisions of this Registration Rights Agreement by
reason of such election with respect to the Registrable Securities which are
included in a Shelf Registration Statement. All the terms and provisions of this
Registration Rights Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the respective successors and assigns of the
parties hereto and any Holder from time to time of the Registrable Securities to
the aforesaid extent. In the event that any transferee of any Holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Registration Rights Agreement to the aforesaid extent.
(e) Counterparts. This Registration Rights agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Registration Rights Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This Registration Rights Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Trust and you.
Very truly yours,
HVIDE CAPITAL TRUST
By:
Name:
Title:
HVIDE MARINE INCORPORATED
By:
Name:
Title:
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
HOWARD, WEIL, LABOUISSE, FRIEDRICHS INCORPORATED
RAYMOND JAMES & ASSOCIATES, INC.
By: Donaldson, Lufkin & Jenrette
Securities Corporation
By:
Name:
Title:
On behalf of each of the Purchasers
EXHIBIT 12
HVIDE MARINE INCORPORATED
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratio amounts)
(unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
1992 1993 1994 1995 1996 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from operations before
income taxes............................. $ 168 $ 3,691 $ 547 $ (362) $ 9,576 $ 358 $16,422
Add (deduct):
Fixed charges less preferred stock
dividends.............................. 5,411 5,248 6,451 12,954 13,133 6,465 5,081
Minority interest in consolidated
subsidiaries........................... 183 1,179 184 -- -- -- --
Minority interest adjustment for losses of
majority owned subsidiaries............ -- -- -- (625) (756) (405) (30)
Net losses related to 50% or less owned
subsidiaries........................... -- -- -- 488 -- 37 36
-------- ------- ------ ------- -------- ------- -------
Adjusted Earnings.......................... $ 5,762 $10,118 $7,182 $12,455 $ 21,953 $ 6,455 $21,509
======== ======= ====== ======= ======== ======= =======
Fixed charges:
Interest................................. $ 4,331 $ 3,606 $5,614 $11,748 $ 11,908 $ 5,983 $ 5,003
Amortization of deferred financing costs
and original issue discount............ 1,080 1,642 837 1,206 1,225 482 78
Preferred stock dividends................ 136 555 583 -- -- -- --
-------- ------- ------ ------- -------- ------- -------
Total fixed charges........................ $ 5,547 $ 5,803 $7,034 $12,954 $ 13,133 $ 6,465 $ 5,081
======== ======= ====== ======= ======== ======= =======
Ratio of earnings to fixed charges......... 1.04 1.74 1.02 0.96 1.67 1.00 4.23
======== ======= ====== ======= ======== ======= =======
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 333-00000) and related Prospectus of Hvide
Marine Incorporated and Hvide Capital Trust (collectively, the Company) for the
registration of 4,035,120 shares of the Company's convertible preferred stock
and 2,300,000 shares of the Company's Class A Common Stock and to the
incorporation by reference therein of our report dated February 20, 1997, except
the eighth paragraph of Note 3, as to which the date is March 25, 1997, with
respect to the consolidated financial statements of Hvide Marine Incorporated
included in its Annual Report (Form 10-K) for the year ended December 31, 1996,
filed with the Securities and Exchange Commission.
Miami, Florida
September , 1997
Exhibit 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement (Form
S-3, No. 333-00000) and related Prospectus of Hvide Marine Incorporated and
Hvide Capital Trust (collectively, the Company) for the registration of
2,300,000 shares of the Company's convertible preferred stock and 4,035,120
shares of the Company's Class A common stock of our report dated May 19, 1997,
with respect to the financial statements of the Marine Division of GMMOS,
included in the Company's report on Form 8-K dated May 23, 1997.
Deloitte & Touche
Dubai, U.A.E.
September 3, 1997
Exhibit 25.1
================================================================================
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)
HVIDE MARINE INCORPORATED
(Exact name of obligor as specified in its charter)
Florida 65-0524593
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2200 Eller Drive
P.O. Box 13038
Fort Lauderdale, Florida 33316
(Address of principal executive offices) (Zip code)
----------------------
Convertible Subordinated Debentures
(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 2 Rector Street, New York,
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.
-2-
<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 27th day of August, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
Name: Vivian Georges
Title: Assistant Vice President
Exhibit 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of 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)
HVIDE CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware To be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2200 Eller Drive
P.O. Box 13038
Fort Lauderdale, Florida 33316
(Address of principal executive offices) (Zip code)
----------------------
6 1/2% Trust Convertible 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 2 Rector Street, New York,
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.
-2-
<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 27th day of August, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
Name: Vivian Georges
Title: Assistant Vice President
Exhibit 25.3
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
HVIDE MARINE INCORPORATED
(Exact name of obligor as specified in its charter)
Florida 65-0524593
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2200 Eller Drive
P.O. Box 13038
Fort Lauderdale, Florida 33316
(Address of principal executive offices) (Zip code)
----------------------
Guarantee of 6 1/2% Trust Convertible Preferred Securities of
Hvide Capital Trust
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
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.
-2-
<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 27th day of August, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
Name: Vivian Georges
Title: Assistant Vice President
