<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[x] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1998
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission file number 001-12755
SUIZA FOODS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-2559681
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
3811 Turtle Creek Boulevard, Suite 1300
Dallas, Texas 75219
(214) 528-9922
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of April 30, 1998 the number of shares outstanding of each class of common
stock was:
Common Stock, $.01 par value: 31,664,611
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUIZA FOODS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- ----------
(unaudited)
(Dollars in thousands, except share data)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 84,025 $ 24,388
Receivables, net of allowance for doubtful accounts of $4,909 and $3,589,
respectively 222,004 164,284
Inventories 105,444 76,087
Prepaid expenses and other current assets 10,433 7,978
Refundable income taxes 33,103 19,836
Deferred income taxes 3,617 2,718
Net assets of discontinued operations 112,103 100,785
---------- ----------
Total current assets 570,729 396,076
PROPERTY, PLANT AND EQUIPMENT 462,156 363,649
DEFERRED INCOME TAXES 3,831 4,484
INTANGIBLE AND OTHER ASSETS 910,032 639,253
---------- ----------
TOTAL $1,946,748 $1,403,462
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 241,160 $ 178,021
Income taxes payable 2,990 4,006
Current portion of long-term debt 57,134 50,846
---------- ----------
Total current liabilities 301,284 232,873
LONG-TERM DEBT 493,973 777,813
OTHER LONG-TERM LIABILITIES 20,751 13,230
DEFERRED INCOME TAXES 25,618 20,236
COMMITMENTS AND CONTINGENCIES
MANDATORILY REDEEMABLE CONVERTIBLE TRUST ISSUED
PREFERRED SECURITIES 682,500
SUBSIDIARY PREFERRED STOCK 20,000
STOCKHOLDERS' EQUITY:
Preferred stock, 11,691 shares of Series A preferred stock issued and
outstanding, with stated value of $320 per share 3,741 3,741
Common stock, 31,399,489 and 30,463,312 shares issued and outstanding 314 305
Additional paid-in capital 310,272 281,774
Retained earnings 88,295 73,490
---------- ----------
Total stockholders' equity 402,622 359,310
---------- ----------
TOTAL $1,946,748 $1,403,462
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE> 3
SUIZA FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------
1998 1997
------------- -------------
(Dollars in thousands, except share data)
<S> <C> <C>
NET SALES $ 593,121 $ 365,584
COST OF SALES 456,148 286,003
------------- -------------
GROSS PROFIT 136,973 79,581
OPERATING COSTS AND EXPENSES:
Selling and distribution 70,201 41,338
General and administrative 19,445 14,024
Amortization of intangibles 5,738 2,643
------------- -------------
Total operating costs and expenses 95,384 58,005
------------- -------------
INCOME FROM OPERATIONS 41,589 21,576
OTHER (INCOME) EXPENSE:
Interest expense, net 13,402 5,769
Financing charges on preferred securities 1,249
Other income, net (702) (18,466)
------------- -------------
Total other (income) expense 13,949 (12,697)
------------- -------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 27,640 34,273
INCOME TAXES 9,587 11,868
------------- -------------
INCOME FROM CONTINUING OPERATIONS 18,053 22,405
LOSS FROM DISCONTINUED OPERATIONS (3,161) (1,666)
------------- -------------
INCOME BEFORE EXTRAORDINARY LOSS 14,892 20,739
EXTRAORDINARY LOSS FROM EARLY EXTINGUISHMENT OF DEBT (3,270)
------------- -------------
NET INCOME $ 14,892 $ 17,469
============= =============
NET INCOME APPLICABLE TO COMMON STOCK $ 14,805 $ 17,394
============= =============
AVERAGE COMMON SHARES: Basic 30,727,958 28,034,025
Diluted 33,821,891 29,494,741
BASIC EARNINGS PER SHARE:
Income from continuing operations $ 0.58 $ 0.80
Loss from discontinued operations (0.10) (0.06)
Extraordinary loss (0.12)
------------- -------------
Net income $ 0.48 $ 0.62
============= =============
DILUTED EARNINGS PER SHARE:
Income from continuing operations $ 0.54 $ 0.76
Loss from discontinued operations (0.09) (0.06)
Extraordinary loss (0.11)
------------- -------------
Net income $ 0.45 $ 0.59
============= =============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
SUIZA FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
(Dollars in thousands)
1998 1997
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 14,892 $ 17,469
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations 3,161 1,666
Depreciation and amortization 16,110 9,187
Extraordinary loss from early extinguishment of debt 3,270
Other (69) (616)
Deferred income taxes 5,136 3,660
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable (12,199) 5,631
Inventories (10,844) (3,583)
Prepaid expenses and other assets 1,647 (18,958)
Accounts payable and accrued expenses 13,509 (6,549)
Income taxes payable 816 1,672
---------- ----------
Net cash provided by continuing operations 32,159 12,849
Net cash used by discontinued operations (3,712) (437)
---------- ----------
Net cash provided by operating activities 28,447 12,412
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (20,004) (6,921)
Cash outflows for acquisitions (259,355) (7,000)
Other 282 (801)
---------- ----------
Net cash used by continuing operations (279,077) (14,722)
Net cash used by discontinued operations (7,379) (6,802)
---------- ----------
Net cash used in investing activities (286,456) (21,524)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of debt 237,278 33,750
Repayment of debt (515,016) (112,795)
Payment of deferred financing, debt restructuring and merger costs (4,670)
Issuance of common stock, net of expenses 13,034 88,872
Issuance of trust issued preferred securities, net of expenses 582,500
Other (150) (150)
---------- ----------
Net cash provided by financing activities 317,646 5,007
---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 59,637 (4,105)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 24,388 23,823
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 84,025 $ 19,718
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
SUIZA FOODS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements as of March 31, 1998
and for the three month periods ended March 31, 1998 and 1997 have been
prepared by Suiza Foods Corporation (the "Company" or "Suiza") without
audit and have been prepared to give retroactive effect to the November
1997 mergers with Country Fresh, Inc. and The Morningstar Group Inc.
which have been accounted for as poolings of interests. In the opinion
of management, all necessary adjustments (which include only normal
recurring adjustments) to present fairly, in all material respects, the
consolidated financial position, results of operations and cash flows
of the Company as of March 31, 1998 and for the three month periods
ended March 31, 1998 and 1997 have been made. Certain information and
footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
omitted. These financial statements should be read in conjunction with
the Company's 1997 financial statements contained in its Annual Report
on Form 10-K as filed with the Securities and Exchange Commission on
March 31, 1998.
2. INVENTORIES
<TABLE>
<CAPTION>
At March 31, At December 31,
1998 1997
---------- ----------
(in thousands)
<S> <C> <C>
Raw materials and supplies $ 54,276 $ 43,764
Finished goods 51,168 32,323
---------- ----------
$ 105,444 $ 76,087
========== ==========
</TABLE>
3. LONG-TERM DEBT
<TABLE>
<CAPTION>
At March 31, At December 31,
1998 1997
---------- ----------
(in thousands)
<S> <C> <C>
Senior credit facility:
Revolving loan facility $ -- $ 265,500
Term loan facility 537,500 550,000
Industrial development revenue bonds 12,660 12,660
Capital lease obligations and other debt 947 499
---------- ----------
551,107 828,659
Less: current portion (57,134) (50,846)
---------- ----------
$ 493,973 $ 777,813
========== ==========
</TABLE>
5
<PAGE> 6
SUIZA FOODS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
MARCH 31, 1998
3. LONG-TERM DEBT (Continued)
Senior Credit Facilities - On November 26, 1997, the Company entered
into a credit facility with a group of lenders, including First Union
National Bank of North Carolina, as administrative agent, and The First
National Bank of Chicago, as syndication agent, which provides for an
aggregate senior credit facility (the "Senior Credit Facility") of
$1.25 billion comprised of a $550.0 million term loan facility and a
$700.0 million revolving credit facility. The proceeds from this new
facility were used to repay all amounts due under the separate senior
credit facilities maintained by the Company and certain of its
subsidiaries. Under the terms of the Senior Credit Facility, the term
loan is amortized, on a quarterly basis, over six years in increasing
amounts beginning March 31, 1998, and the revolving credit facility
expires on December 31, 2003. Amounts outstanding under the Senior
Credit Facility bear interest at a rate per annum equal to one of the
following rates, at the Company's option: (i) a base rate equal to the
higher of the Federal Funds rate plus 50 basis points or the prime rate
or (ii) The London Interbank Offering Rate ("LIBOR") plus a margin that
varies from 40 to 100 basis points depending on the Company's ratio of
defined indebtedness to EBITDA (as defined in the Senior Credit
Facility). The Company pays a commitment fee on unused amounts of the
revolving credit facility that ranges from 15 to 25 basis points, based
on the Company's ratio of defined indebtedness to EBITDA. The interest
rate in effect at March 31, 1998, on the Senior Credit Facility was
6.44%.
Interest is payable quarterly, and scheduled principal installments on
the term loan facilities are due in quarterly installments of
approximately $12.5 million through December 1998, increasing to $18.75
million on March 31, 1999, $25.0 million on March 31, 2001, $28.125
million on March 31, 2002, and $34.375 million on March 31, 2003, with
the balance maturing on December 31, 2003. Loans under the Senior
Credit Facility are collateralized by substantially all the Company's
assets.
Industrial Development Revenue Bonds - Certain of the Company's
subsidiaries have revenue bonds outstanding, certain of which require
aggregate annual sinking fund redemptions aggregating $0.7 million and
are secured by irrevocable letters of credit issued by financial
institutions, along with first mortgages on certain real property and
equipment. Interest on these bonds is due semiannually at interest
rates that vary based on market conditions which, at December 31, 1997,
ranged from 3.7% to 4.3%.
Other Debt - Other debt includes various promissory notes for the
purchase of property, plant and equipment and capital lease
obligations. The various promissory notes payable provide for interest
at varying rates and are payable in monthly installments of principal
and interest until maturity, when the remaining principal balances are
due. Capital lease obligations represent machinery and equipment
financing obligations which are payable in monthly installments of
principal and interest and are collateralized by the related assets
financed.
6
<PAGE> 7
SUIZA FOODS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
March 31, 1998
3. LONG-TERM DEBT (Continued)
Interest Rate Agreements - The Company has interest rate derivative
agreements in place, including interest rate caps and interest rate
swaps, that have been designated as hedges against the Company's
variable interest rate exposure on its loans under the Senior Credit
Facility. At March 31, 1998, the interest rate caps have aggregate
notional amounts of $60 million, which mature in March 2000, and caps
interest on LIBOR loans at 8.0%, plus the applicable LIBOR margin. The
interest rate swaps have aggregate notional amounts of $490 million at
interest rates ranging from 6.0% to 6.14%, plus the applicable LIBOR
margin, and include $55 million of swaps that mature in June 1998; $60
million of swaps that mature in September 2000; $100 million of swaps
that mature in December 2000; $225 million of swaps that mature in
December 2002; and $50 million of swaps that mature in December 2003.
In addition, the Company has entered into $100 million of interest rate
collars, which mature from December 2002 to June 2003, and provide for
an interest rate floor and limit of approximately 6.11% and 7.5%,
respectively, plus the applicable LIBOR margin. These derivative
agreements provide hedges for senior credit facility loans by limiting
or fixing the LIBOR interest rates specified in the senior credit
facilities (5.63% at March 31, 1998, excluding the LIBOR margin) at the
above rates until the indicated expiration dates of these
interest-rate-derivative agreements. The original costs and premiums of
these derivative agreements are being amortized on a straight-line
basis as a component of interest expense.
The Company is exposed to market risk under these arrangements due to
the possibility of exchanging a lower interest rate for a higher
interest rate. The counterparties are major financial institutions and
the risk of incurring losses related to credit risk is considered by
the Company to be remote.
Debt Covenants - The Company's Senior Credit Facility contains various
financial and other restrictive covenants and requirements that the
Company maintain certain financial ratios, including a leverage ratio
(computed as the ratio of the aggregate outstanding principal amount of
defined indebtedness to EBITDA, as defined), a fixed charges ratio
(computed as the ratio of the EBITDA to defined fixed charges) and an
interest coverage ratio (computed as the ratio of EBITDA to interest
expense), and requires the Company to maintain a minimum level of net
worth. The Senior Credit Facility also contains limitations on capital
expenditures, investments and the incurrence of additional indebtedness
and requires certain mandatory prepayments from the proceeds of certain
dispositions of property.
4. TAXES
In December 1995, the Commonwealth of Puerto Rico adopted the Puerto
Rico Agricultural Tax Incentives Act of 1995, which reduced the
effective income tax rate for qualified agricultural businesses from
39% to 3.9% and provided for a 50% tax credit for certain "eligible
investments" in qualified agricultural businesses in Puerto Rico.
7
<PAGE> 8
SUIZA FOODS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
March 31, 1998
4. TAXES (Continued)
During the first quarter of 1997, the Company obtained a ruling from
the Commonwealth of Puerto Rico confirming that its investments in its
Suiza-Puerto Rico fruit and plastics subsidiaries qualified for the 50%
tax credit. Accordingly, in March 1997, the Company recognized a
nonrecurring gain of $18.1 million, net of discounts and related
expenses ($11.5 million after income taxes) for the sale of earned tax
credits to third parties.
The Company has been informed by Puerto Rico tax authorities that its
investment in its coffee business qualifies for additional tax credits.
These tax credits were sold in April 1998, and will be accounted for in
the second quarter of 1998 as an adjustment to the original purchase
price of the coffee business, which will result in a reduction of
goodwill.
5. MERGERS AND ACQUISITIONS
On January 14, 1998, Suiza signed a definitive agreement to acquire
Continental Can Company, Inc. ("Continental Can"). The purchase price
for Continental Can is payable through the issuance by Suiza of
approximately 2.1 million shares of common stock, the assumption by
Suiza of outstanding options of Continental Can, which will become
exercisable to purchase approximately 0.4 million shares of Suiza's
common stock, and the assumption of Continental Can's long-term
indebtedness outstanding at closing. Continental Can is primarily
engaged in the packaging business through a number of operating
subsidiaries in the United States and in Europe, and reported net sales
of approximately $546 million for the fiscal year ended December 31,
1997. The Continental Can merger, which is subject to the approval of
the stockholders of Continental Can and customary closing conditions,
is expected to close in the second quarter of 1998, and will be
accounted for using the purchase method of accounting. There can be no
assurance, however, that the acquisition of Continental Can will be
completed as currently contemplated or at all.
On February 20, 1998, Suiza completed the acquisition of Land-O-Sun
Dairies, L.L.C., ("Land-O-Sun") for a purchase price of approximately
$248 million, including approximately $128 million in cash. The
non-cash portion of the purchase price was funded through the issuance
of $100 million of company-obligated 5% mandatorily redeemable
convertible preferred securities of a Delaware business trust formed by
Suiza, and the issuance of $20 million of preferred interests of
Land-O-Sun. In addition, Suiza refinanced Land-O-Sun's existing
outstanding long-term indebtedness, which totaled approximately $52
million as of the closing date. Suiza financed the cash portion of the
purchase price and refinanced the existing long-term indebtedness with
borrowings of $180 million under its Senior Credit Facility. Land-O-Sun
is based in Johnson City, Tennessee and operates 13 fluid dairy and ice
cream processing facilities in Tennessee, North Carolina, South
Carolina, Georgia, Illinois, Kentucky and Virginia. Land-O-Sun reported
net sales of approximately $464 million for its fiscal year ended
December 31, 1997. The Land-O-Sun acquisition was accounted for using
the purchase method of accounting.
8
<PAGE> 9
SUIZA FOODS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
MARCH 31, 1998
5. MERGERS AND ACQUISITIONS (Continued)
Following is a summary of unaudited pro forma results of operations of
Suiza Foods which gives effect to the acquisitions of Dairy Fresh,
Garelick Farms, and Franklin Plastics in 1997 and the acquisitions of
Continental Can and Land-O-Sun in 1998 as if these acquisitions had
occurred at the beginning of 1997.
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1998 1997
------------- ------------
(in thousands, except per share data)
<S> <C> <C>
Revenues $ 781,973 $ 724,674
Income from continuing operations 20,178 27,639
Net income 17,017 22,703
Income from continuing operations per share:
Basic 0.61 0.91
Diluted 0.57 0.82
Net income per share:
Basic 0.52 0.75
Diluted 0.48 0.70
</TABLE>
Suiza has also recently acquired or agreed to acquire a number of
smaller dairy and plastic packaging businesses, including the completed
acquisitions of Louis Trauth Dairy, Inc. ("Trauth"), a Newport,
Kentucky-based manufacturer and distributor of fresh milk, ice cream
and related dairy products and Oberlin Farms Dairy, Inc. ("Oberlin"), a
Cleveland, Ohio-based processor of milk and cultured dairy products.
Trauth and Oberlin recorded net sales of approximately $67 million and
$76 million, respectively, for their most recent fiscal year ends.
6. DISCONTINUED OPERATIONS
On April 30, 1998, Suiza consummated its previously announced sale of
Reddy Ice to Packaged Ice, Inc. ("Packaged Ice") for approximately
$172.5 million in cash. Reddy Ice had revenues during 1997 of
approximately $66.3 million. The assets and operations of Reddy Ice are
presented as discontinued operations in the accompanying condensed
consolidated financial statements.
Net sales of Reddy Ice were $11.1 million and $8.2 million for the
three month periods ended March 31, 1998 and 1997 respectively.
Interest expense of $1.8 million was charged to the discontinued
operations during the first quarters of 1998 and 1997, based on debt
specifically attributed to Reddy Ice. The loss from discontinued
operations as reported in the condensed consolidated statements of
income is presented net of the related income tax benefit of $1.9
million and $1.0 million for the periods ended March 31, 1998 and 1997,
respectively.
9
<PAGE> 10
SUIZA FOODS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
MARCH 31, 1998
7. TRUST ISSUED PREFERRED SECURITIES
In connection with the Land-O-Sun acquisition, Suiza issued $100
million of company-obligated 5% mandatorily redeemable convertible
preferred securities of a Delaware business trust. On March 24, 1998,
the Company also completed the sale of $600 million of
company-obligated 5.5% mandatorily redeemable convertible preferred
securities of a Delaware business trust in a private placement to
"qualified institutional buyers" under Rule 144A under the Securities
Act of 1933, as amended. These trust issued preferred securities, which
are recorded net of related fees and expenses, are convertible at the
option of the holders into an aggregate of approximately 9.1 million
shares of the Company's common stock, subject to adjustment in certain
circumstances. These preferred securities are also redeemable, at the
Company's option, at any time after three years from their respective
issue dates at specified amounts and are mandatorily redeemable at
their liquidation preference amount of $50 per share after 30 years
from their respective issue dates or upon occurrence of certain
specified events, as defined.
8. COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 (SFAS 130), "Reporting Comprehensive
Income," issued in June 1997. For interim periods, SFAS 130 requires
disclosure of comprehensive income, which is composed of net income and
other comprehensive income items. Other comprehensive income items are
revenues, expenses, gains and losses that under generally accepted
accounting principles are excluded from net income and reflected as a
component of equity. For the three month period ended March 31, 1998
consolidated comprehensive income was $29,991 which includes tax
benefits of $15,099 related to the exercise of certain employees' stock
options. Consolidated comprehensive income was equal to consolidated
net income for the three-month period ended March 31, 1997.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
Suiza Foods Corporation (the "Company" or "Suiza") is a leading manufacturer and
distributor of fresh milk and related dairy products and plastic packaging in
the United States. Suiza also manufactures, distributes and markets
refrigerated, shelf-stable and frozen food products. Suiza has grown primarily
through a successful acquisition strategy, having consummated more than 15 dairy
and packaging acquisitions since its initial public offering in April 1996.
Through these acquisitions, Suiza has realized economies of scale, operating
efficiencies and added complimentary product lines. The Company conducts its
dairy operations primarily through its Puerto Rico subsidiaries ("Suiza-Puerto
Rico"), Velda Farms, Inc. ("Velda Farms"), Swiss Dairy Corporation ("Swiss
Dairy"), Model Dairy, Inc. ("Model Dairy"), Dairy Fresh, Inc. ("Dairy Fresh"),
Garelick Farms, Inc. and certain related dairy subsidiaries ("Garelick Farms"),
Country Delite Farms Inc. ("Country Delite"), Country Fresh, Inc. ("Country
Fresh"), The Morningstar Group Inc. ("Morningstar"), LOS Holdings, Inc.
("Land-O-Sun") and Louis Trauth Dairy Inc. ("Trauth"). The Company conducts its
plastics operations through Franklin Plastics, Inc. and subsidiaries ("Franklin
Plastics" or "Plastics"). Each of the Company's dairy and plastic packaging
operating subsidiaries is a leading competitor in its market, with an
established reputation for customer service and product quality. The Company's
dairy subsidiaries market their products through extensive distribution networks
to a diverse group of customers, including convenience stores, grocery stores,
schools and institutional food service customers. The Company's customers in the
plastic packaging business include regional dairy manufacturers, bottled water
processors, beverage manufacturers, and consumer and industrial products
companies.
Outlook and Uncertainties
Certain statements and information in this Quarterly Report constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be indicated by
phrases such as "believes," "anticipates," "expects," "intends," "foresees,"
"projects," "forecasts" or words of similar meaning or import. Such statements
are 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 set forth in
applicable forward-looking statements. Among the key factors that may have a
direct bearing on the Company's results and financial condition are (i) risks
associated with the Company's acquisition strategy, (ii) risks relating to the
Company's leverage position, (iii) risks associated with intense competition in
the Company's industries and (iv) the impact of governmental regulations
affecting the dairy industry. Any forward-looking statements made or
incorporated by reference herein speak only as of the date of this Quarterly
Report. 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 regard thereto or any change in events, conditions, or
circumstances on which any such statement is based. Additional information
concerning these and other risk factors is contained in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997, a copy of which
may be obtained from the Company upon request.
11
<PAGE> 12
Results of Operations
The Company currently operates in two distinct businesses as shown below
(dollars in thousands):
<TABLE>
<CAPTION>
Three months ended March 31,
---------------------------------------------------------------------
1998 1997
---- ----
Percent Percent
of of
Dollars Net Sales Dollars Net Sales
------- --------- ------- ---------
<S> <C> <C> <C> <C>
Net sales:
Dairy $ 555,973 $ 365,584
Plastics 37,148
----------- -----------
Net sales 593,121 100.0% 365,584 100.0%
Cost of sales 456,148 76.9 286,003 78.2
----------- ----------- ----------- -----------
Gross profit 136,973 23.1 79,581 21.8
Operating expenses:
Selling and distribution 70,201 11.8 41,338 11.3
General and administrative 19,445 3.3 14,024 3.8
Amortization of intangibles 5,738 1.0 2,643 0.8
----------- ----------- ----------- -----------
Total operating expenses 95,384 16.1 58,005 15.9
----------- ----------- ----------- -----------
Operating income (loss):
Dairy 41,330 7.0 23,463 6.4
Plastics 4,310 0.7
Corporate office (4,051) (0.07) (1,887) (0.5)
----------- ----------- ----------- -----------
Total operating income $ 41,589 7.0% $ 21,576 5.9%
=========== =========== =========== ===========
</TABLE>
First Quarter 1998 Compared to First Quarter 1997
Net Sales. The Company's net sales increased 62.2% to $593.1 million in the
first quarter of 1998 from $365.6 million in 1997. Dairy net sales increased
52.1% or $190.4 million to $556.0 million in the first quarter of 1998
primarily due to (i) the acquisitions of Garelick Farms, Dairy Fresh and Country
Delite in the last half of 1997, (ii) the acquisitions of Land-O-Sun and Trauth
in the first quarter of 1998 and (iii) strong sales of branded products at
Morningstar. The Company began operating in the plastics business with the
acquisition of Franklin Plastics in July, 1997.
Cost of Sales. The Company's cost of sales margin was 76.9% in the first quarter
of 1998 compared to 78.2 % for the same period in 1997. Dairy cost of sales
margins improved from the prior year due to (i) operating efficiencies in the
Company's fluid dairy division and (ii) increased branded and specialty product
sales at Morningstar.
Operating Expenses. The Company's operating expense ratios were 16.1% for the
first quarter of 1998 compared to 15.9% for the same period in 1997. Dairy
operating expense margins increased slightly in the quarter because of
additional goodwill amortization for the acquired companies.
Operating Income. The Company's operating income increased 92.8% to $41.6
million in the first quarter of 1998 from $21.6 million in the first quarter of
1997 primarily as a result of the aforementioned acquisitions and the increased
sales at Morningstar. The Company's operating income
12
<PAGE> 13
margin increased to 7.0% in the first quarter of 1998 from 5.9% in the first
quarter of 1997 for the same reasons.
Other (Income) Expense. Interest expense increased to $13.4 million in the first
quarter of 1998 from $5.8 million in the first quarter of 1997 primarily due to
the increased level of debt used to finance the aforementioned acquisitions.
Financing charges on preferred securities amounted to $1.2 million in the first
quarter of 1998, reflecting (i) the issuance on February 20, 1998 of $100
million of company-obligated mandatorily redeemable preferred securities related
to the acquisition of Land-O-Sun and (ii) the issuance on March 24, 1998 of $600
million of company-obligated mandatorily redeemable preferred securities. Other
income decreased to $0.7 million in the first quarter of 1998 from $18.5 million
in the first quarter of 1997 due to the recognition in the 1997 period of a
$18.1 million gain from the sale of tax credits (see Note 4 to the condensed
consolidated financial statements).
Extraordinary Items. The Company incurred a $3.3 million extraordinary loss (net
of a $2.0 million tax benefit) on January 28, 1997 related to the early
extinguishment of subordinated debt, which included the write-off of deferred
financing costs and certain prepayment penalties.
Net Income. The Company reported net income of $14.9 million in the first
quarter of 1998 compared to net income of $17.5 million in the first quarter of
1997 ($9.3 million excluding the after-tax gain on the sale of tax credits of
$11.5 million and the extraordinary loss of $3.3 million).
Liquidity and Capital Resources
As of March 31, 1998, the Company had total stockholders' equity of $402.6
million and total indebtedness of $551.1 million (including long-term debt and
the current portion of long-term debt). The Company is currently in compliance
with all covenants and financial ratios contained in its debt agreements.
Cash Flow. Historically, the working capital needs of the Company have been met
with cash flow from operations along with borrowings under revolving credit
facilities. Net cash provided by operating activities was $28.4 million for the
first three months of 1998 as contrasted to $12.4 million for the first three
months of 1997. Investing activities in the first three months of 1998 included
approximately $20.0 million in capital expenditures of which $17.0 million was
spent at Dairy and $3.0 million was spent at Plastics. Investing activities also
included $259.4 million for acquisitions.
On February 20, 1998, Suiza completed the acquisition of Land-O-Sun for a
purchase price of approximately $248 million, including approximately $128
million in cash. The non-cash portion of the purchase price was funded through
the issuance of $100 million of company-obligated 5% mandatorily redeemable
convertible preferred securities of a Delaware business trust formed by Suiza,
and the issuance of $20 million of preferred interests of Land-O-Sun. In
addition, Suiza refinanced Land-O-Sun's existing outstanding long-term
indebtedness, which totaled approximately $52 million as of the closing date.
Suiza financed the cash portion of the purchase price and refinanced the
existing long-term indebtedness with borrowings of $180 million under its Senior
Credit Facility.
During the quarter the Company also acquired Trauth and two small plastic
packaging businesses. Suiza financed these acquisitions with borrowings under
its Senior Credit Facility.
On March 24, 1998, the Company completed the sale of $600 million of
company-obligated 5.5% mandatorily redeemable convertible preferred securities
of a Delaware business trust in a private placement, resulting in net proceeds
after expenses of approximately $582.5 million. The net proceeds were used to
repay $502.5 million under the revolving loan facility of the Company's Senior
Credit Facility and the remainder was placed in short-term cash investments.
13
<PAGE> 14
Future Capital Requirements. During 1998, the Company intends to invest a total
of approximately $101.0 million in its manufacturing facilities and distribution
capabilities. Of this amount, Dairy intends to spend approximately $85.0 million
for the year to expand and maintain its manufacturing facilities and for fleet
replacement and Plastics intends to spend approximately $16.0 million. The
Company plans to substantially expand its Plastics operations by opening new
locations and the majority of Plastics' capital spending will be for this
purpose.
Current Debt Obligations. On November 26, 1997, the Company entered into a new
credit facility with a group of lenders, including First Union National Bank of
North Carolina, as administrative agent, and The First National Bank of Chicago,
as syndication agent, which provides for an aggregate Senior Credit Facility of
$1.25 billion comprised of a $550.0 million term loan facility and a $700.0
million revolving credit facility. At March 31, 1998, $674.0 million was
available under the revolving loan facilities. In connection with the closing of
the sale of Reddy Ice on April 30, 1998, the Company used the cash received to
repay additional Senior Credit Facility outstanding borrowings.
The Company expects that cash flow from operations will be sufficient to meet
the Company's requirements for its existing businesses for the remainder of 1998
and for the foreseeable future. During the remainder of 1998 and in the future,
the Company intends to pursue additional acquisitions in its existing regional
markets and to seek strategic acquisition opportunities that are compatible with
it core businesses. Management believes that the Company has the ability to
secure additional financing to pursue its acquisition and consolidation
strategy. There can be no assurance, however, that the Company will have
sufficient available capital resources to realize its acquisition and
consolidation strategy.
14
<PAGE> 15
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.1 Certificate of Trust of Suiza Capital Trust II.
4.2 Amended and restated Declaration of Trust of Suiza Capital Trust
II, dated as of March 24, 1998, among Suiza Foods Corporation, as
Sponsor, Wilmington Trust Company, as Property Trustee,
Wilmington Trust Company, as Delaware Trustee, and Tracy L. Noll,
J. Michael Lewis and Joseph B. Armes, as Regular Trustees.
4.3 Indenture for the 5.5% Convertible Subordinated Debentures, dated
as of March 24, 1998, among Suiza Foods Corporation and
Wilmington Trust Company, as Indenture Trustee.
4.4 Form of 5.5% Preferred Securities.
4.5 Form of 5.5% Convertible Subordinated Debenture.
4.6 Preferred Securities Guarantee Agreement, dated as of March 24,
1998, between Suiza Foods Corporation, as Guarantor, and
Wilmington Trust Company, as Guarantee Trustee.
10.1 Registration Rights Amendment, dated March 24, 1998, between
Suiza Foods Corporation, Suiza Capital Trust II, and Donaldson,
Lufkin, Jenrette Securities Corporation, Bear, Stearns & Co. Inc.
and J.P. Morgan & Co.
10.2 Agreement and Plan of Merger dated as of January 14, 1998 by and
among Suiza Foods Corporation, CC Acquisition Corporation, and
Continental Can Company, Inc. (filed as Exhibit 2.1 to the
Registration Statement on Form S-4, Commission File No.
333-46519, and incorporated herein by reference).
11. Statement re computation of per share earnings.
27. Financial Data Schedule.
(b) Reports on Form 8-K
(1) Form 8-K filed on January 15, 1998 to report the definitive
merger agreement between Suiza Foods and Continental Can.
(2) Form 8-K filed on February 25, 1998 to report various matters
including fourth quarter 1997 earnings, potential packaging
operations, the closing of the Land-O-Sun acquisition, and the
signing of a merger agreement with Oberlin.
(3) Form 8-K filed on March 9, 1998 (amended April 7, 1998) to report
the completion of the acquisition of Land-O-Sun.
(4) Form 8-K filed on March 10, 1998 to report the adoption of a
shareholders' rights plan.
(5) Form 8-K filed on March 18, 1998 to report the sale of $600
million of 5.5% company-obligated mandatorily redeemable
preferred securities.
(6) Form 8-K filed on March 20, 1998 to provide pro forma financial
statements related to the issuance of $600 million of 5.5%
company-obligated mandatorily redeemable preferred securities.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUIZA FOODS CORPORATION
/s/ Tracy L. Noll
---------------------------------------
Tracy L. Noll
Executive Vice President,
Chief Financial Officer
(Principal Accounting Officer)
Date: May 14, 1998
16
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibits No. Descriptions
------------ ------------
<S> <C>
4.1 Certificate of Trust of Suiza Capital Trust II.
4.2 Amended and restated Declaration of Trust of Suiza Capital Trust
II, dated as of March 24, 1998, among Suiza Foods Corporation, as
Sponsor, Wilmington Trust Company, as Property Trustee,
Wilmington Trust Company, as Delaware Trustee, and Tracy L. Noll,
J. Michael Lewis and Joseph B. Armes, as Regular Trustees.
4.3 Indenture for the 5.5% Convertible Subordinated Debentures, dated
as of March 24, 1998, among Suiza Foods Corporation and
Wilmington Trust Company, as Indenture Trustee.
4.4 Form of 5.5% Preferred Securities.
4.5 Form of 5.5% Convertible Subordinated Debenture.
4.6 Preferred Securities Guarantee Agreement, dated as of March 24,
1998, between Suiza Foods Corporation, as Guarantor, and
Wilmington Trust Company, as Guarantee Trustee.
10.1 Registration Rights Amendment, dated March 24, 1998, between
Suiza Foods Corporation, Suiza Capital Trust II, and Donaldson,
Lufkin, Jenrette Securities Corporation, Bear, Stearns & Co. Inc.
and J.P. Morgan & Co.
10.2 Agreement and Plan of Merger dated as of January 14, 1998 by and
among Suiza Foods Corporation, CC Acquisition Corporation, and
Continental Can Company, Inc. (filed as Exhibit 2.1 to the
Registration Statement on Form S-4, Commission File No.
333-46519, and incorporated herein by reference).
11. Statement re computation of per share earnings.
27. Financial Data Schedule.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
CERTIFICATE OF TRUST OF SUIZA CAPITAL TRUST II
THIS Certificate of Trust of Suiza Capital Trust II (the "Trust") is
being duly executed and filed by the undersigned, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. C. Section 3801, et. seq.).
1. NAME. The name of the business trust formed hereby is Suiza Capital
Trust II.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, Delaware, 19890-0001, Attention: Corporate
Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has
duly executed this Certificate of Trust.
WILMINGTON TRUST COMPANY,
as trustee
By: /s/ W. Chris Sponenberg
--------------------------------------
Name: W. Chris Sponenberg
------------------------------------
Title: Senior Financial Services Officer
-----------------------------------
1
<PAGE> 1
EXHIBIT 4.2
================================================================================
AMENDED AND RESTATED
DECLARATION OF TRUST
AMONG
SUIZA FOODS CORPORATION
AS DEPOSITOR,
WILMINGTON TRUST COMPANY
AS PROPERTY TRUSTEE,
WILMINGTON TRUST COMPANY
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF MARCH 24, 1998
SUIZA CAPITAL TRUST II
================================================================================
<PAGE> 2
SUIZA CAPITAL TRUST II*
Certain Sections of this Declaration
relating to Sections 310 through 318
of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE DECLARATION
ACT SECTION SECTION
<S> <C> <C>
Section 310 (a) (1) ......................................................... 8.7
(a) (2) ......................................................... 8.7
(a) (4) ......................................................... 2.7(a)(ii)
(b) ......................................................... 8.8
Section 311 (a) ......................................................... 8.12
(b) ......................................................... 8.12
Section 312 (a) ......................................................... 5.7
(b) ......................................................... 5.7
(c) ......................................................... 5.7
Section 313 (a) ......................................................... 8.13(a)
(c) ......................................................... 10.8
(d) ......................................................... 8.13(c)
(a) (4) ......................................................... 8.13(b)
(b) ......................................................... 8.13(b)
Section 314 (a) ......................................................... 8.14
(b) ......................................................... Not Applicable
(c) (1) ......................................................... 8.15
(c) (2) ......................................................... 8.15
(c) (3) ......................................................... Not Applicable
(d) ......................................................... Not Applicable
(e) ......................................................... 1.1, 8.15
Section 315 (a) ......................................................... 8.1(a), 8.3(a)
(b) ......................................................... 8.2, 10.8
(c) ......................................................... 8.1(a)
(d) ......................................................... 8.1, 8.3
(e) ......................................................... Not Applicable
Section 316 (a) ......................................................... Not Applicable
(a) (1)(A) ......................................................... Not Applicable
(a) (1)(B) ......................................................... Not Applicable
(a) (2) ......................................................... Not Applicable
(b) ......................................................... Not Applicable
(c) ......................................................... 6.7
Section 317 (a) (1) ......................................................... Not Applicable
(b) ......................................................... 5.9
Section 318 (a) ......................................................... 10.10
</TABLE>
- -----------------------------
* Note: This reconciliation and tie sheet shall not, for any purpose,
be deemed to be a part of the Declaration.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1 - DEFINED TERMS.........................................................................................1
SECTION 1.1. Definitions........................................................................1
ARTICLE 2 - ESTABLISHMENT OF THE TRUST...........................................................................13
SECTION 2.1. Name..............................................................................13
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business.......................13
SECTION 2.3. Organizational Expenses...........................................................13
SECTION 2.4. Issuance of the Preferred Securities..............................................13
SECTION 2.5. Subscription and Purchase of Debentures; Issuance of
the Common Securities.............................................................14
SECTION 2.6. Declaration of Trust; Intent Clause...............................................14
SECTION 2.7. Authorization to Enter into Certain Transactions..................................14
SECTION 2.8. Assets of Trust...................................................................19
SECTION 2.9. Title to Trust Property...........................................................19
ARTICLE 3 - PROPERTY ACCOUNT.....................................................................................19
SECTION 3.1. Property Account..................................................................19
ARTICLE 4 - DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION......................................................20
SECTION 4.1. Distributions.....................................................................20
SECTION 4.2. Redemption........................................................................20
SECTION 4.3. Conversion........................................................................23
SECTION 4.4. Special Event Exchange or Redemption..............................................25
SECTION 4.5. Subordination of Common Securities................................................27
SECTION 4.6. Payment Procedures................................................................27
SECTION 4.7. Tax Returns and Reports...........................................................27
SECTION 4.8. Payment of Taxes, Duties, Etc. of the Trust.......................................28
SECTION 4.9. Payments under Indenture..........................................................28
ARTICLE 5 - TRUST SECURITIES CERTIFICATES........................................................................28
SECTION 5.1. Initial Ownership.................................................................28
SECTION 5.2. The Trust Securities Certificates.................................................28
SECTION 5.3. Delivery of Trust Securities Certificates.........................................29
SECTION 5.4. Registration of Transfer and Exchange of
Preferred Securities; Restrictions on Transfer....................................29
SECTION 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates................31
SECTION 5.6. Persons Deemed Securityholders....................................................32
SECTION 5.7. Access to List of Securityholders' Names and Addresses............................32
SECTION 5.8. Maintenance of Office or Agency...................................................32
SECTION 5.9. Appointment of Paying Agent.......................................................32
</TABLE>
i
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION 5.10. Ownership of Common Securities by Depositor.......................................33
SECTION 5.11. Global Securities; Non-Global Securities; Common
Securities Certificate............................................................33
SECTION 5.12. Notices to Clearing Agency........................................................34
SECTION 5.13. Definitive Preferred Securities Certificates......................................35
SECTION 5.14. Rights of Securityholders.........................................................35
SECTION 5.15. Restrictive Legends...............................................................35
ARTICLE 6 - ACT OF SECURITYHOLDERS; MEETINGS; VOTING; AMENDMENT
OF THE DECLARATION.............................................................................36
SECTION 6.1. Limitations on Voting Rights......................................................36
SECTION 6.2. Notice of Meetings................................................................39
SECTION 6.3. Meetings of Preferred Securityholders.............................................39
SECTION 6.4. Voting Rights.....................................................................40
SECTION 6.5. Proxies, Etc......................................................................40
SECTION 6.6. Securityholder Action by Written Consent..........................................40
SECTION 6.7. Record Date for Voting and Other Purposes.........................................40
SECTION 6.8. Acts of Securityholders...........................................................40
SECTION 6.9. Inspection of Records.............................................................42
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES.......................................................................42
SECTION 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee..............................................................42
SECTION 7.2. Representations and Warranties of Depositor.......................................43
ARTICLE 8 - THE TRUSTEES.........................................................................................44
SECTION 8.1. Certain Duties and Responsibilities...............................................44
SECTION 8.2. Notice of Defaults................................................................46
SECTION 8.3. Certain Rights of Property Trustee................................................48
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities............................51
SECTION 8.5. May Hold Securities...............................................................51
SECTION 8.6. Compensation; Indemnity; Fees.....................................................51
SECTION 8.7. Property Trustee Required; Eligibility of Trustees................................52
SECTION 8.8. Disqualification: Conflicting Interest...........................................52
SECTION 8.9. Resignation and Removal; Appointment of Successor.................................53
SECTION 8.10. Acceptance of Appointment by Successor............................................54
SECTION 8.11. Merger, Conversion, Consolidation or Succession to Business.......................55
SECTION 8.12. Preferential Collection of Claims Against Depositor or Trust......................55
SECTION 8.13. Reports by Property Trustee.......................................................56
SECTION 8.14. Reports to the Property Trustee...................................................56
SECTION 8.15. Evidence of Compliance with Conditions Precedent..................................56
SECTION 8.16. Number of Trustees................................................................57
SECTION 8.17. Delegation of Power...............................................................57
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE 9 - DISSOLUTION, LIQUIDATION, TERMINATION AND MERGER.....................................................57
SECTION 9.1. Dissolution upon Expiration Date..................................................57
SECTION 9.2. Early Dissolution.................................................................57
SECTION 9.3. Termination.......................................................................58
SECTION 9.4. Liquidation.......................................................................58
SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of the Trust.........................................................60
ARTICLE 10 - MISCELLANEOUS PROVISIONS............................................................................61
SECTION 10.1. Limitation of Rights of Securityholders...........................................61
SECTION 10.2. Amendment.........................................................................61
SECTION 10.3. Separability......................................................................61
SECTION 10.4. GOVERNING LAW.....................................................................61
SECTION 10.5. Payments Due on Non-Business Day..................................................62
SECTION 10.6. Successors........................................................................62
SECTION 10.7. Headings..........................................................................62
SECTION 10.8. Reports, Notices and Demands......................................................62
SECTION 10.9. Agreement Not to Petition.........................................................63
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act............................63
SECTION 10.11. ACCEPTANCE OF TERMS OF DECLARATION,
GUARANTEE AND INDENTURE...........................................................64
SECTION 10.12. Counterparts......................................................................64
ARTICLE 11 - REGISTRATION RIGHTS.................................................................................64
SECTION 11.1. Registration Rights...............................................................64
</TABLE>
EXHIBIT A: The Certificate of Trust
iii
<PAGE> 6
AMENDED AND RESTATED DECLARATION OF TRUST, dated as of March 24, 1998
among (i) Suiza Foods Corporation, a Delaware corporation (including any
successors or assigns, the "DEPOSITOR"), (ii) Wilmington Trust Company, a
Delaware 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) Wilmington Trust Company, a Delaware
banking corporation, as Delaware trustee (in such capacity, the "DELAWARE
TRUSTEE"), (iv) Tracy L. Noll, an individual, J. Michael Lewis, an individual,
and Joseph B. Armes, an individual, each of whose address is c/o Suiza Foods
Corporation, 3811 Turtle Creek Boulevard, Dallas, Texas 75219, (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
March 18, 1998 (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 March 18, 1998 (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;
1
<PAGE> 7
(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 and identified
as such to the Property Trustee or other holders of the Debentures by the
Depositor on the Debentures.
"ADDITIONAL SUMS" means, with respect to the Trust Securities, the
amount of Additional Sums (as defined in the Indenture) paid and identified as
such to the Property Trustee or other holders of the Debentures by the Depositor
on the Debentures.
"ADMINISTRATIVE TRUSTEE" means each of Tracy L. Noll, J. Michael Lewis
and Joseph B. Armes, 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
2
<PAGE> 8
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 Rule 144A Global Certificate or beneficial interest
therein, the rules and procedures of the Clearing Agency for such security, in
each case to the extent applicable to such 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.
3
<PAGE> 9
"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 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 or the corporate trust office of the Indenture 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 letter 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, 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.
"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.
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<PAGE> 10
"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.
"COMMON SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit B.
"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" means common stock, par value $0.01 per share, of the
Depositor 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 Depositor and which are not
subject to redemption by the Depositor.
"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
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
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
NYSE, or, if such Common Stock is not admitted to trading on the NYSE 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
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<PAGE> 11
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.
"DEBENTURES" means up to $618,556,750 aggregate principal amount of the
Depositor's 5 1/2% Convertible Subordinated Debentures due April 1, 2028 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.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 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.
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<PAGE> 12
"EARLY DISSOLUTION EVENT" has the meaning specified in Section 9.2.
"EVENT OF DEFAULT" means the occurrence of a Debenture Event of Default
"EXCHANGE NOTICE" has the meaning specified in Section 4.4(b).
"EXPIRATION DATE" has the meaning specified in Section 9.1.
"RULE 144A 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 Wilmington Trust Company, a Delaware 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
March 24, 1998 between the Depositor and the Indenture Trustee, as amended or
supplemented from time to time.
"INDENTURE TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture, until a successor Indenture Trustee
shall have become such pursuant to the applicable provision of the Indenture,
and thereafter "Indenture Trustee" shall mean such successor trustee and shall
include each Person who is then a Indenture Trustee hereunder if at any time
there is more than one such Person.
"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 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 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 March 18, 1998.
"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" means, with respect to the Trust Securities, the
amount of Liquidated Damages (as defined in the Indenture) paid and identified
as such to the Property Trustee or other holders of the Debentures by the
Depositor on the Debentures.
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<PAGE> 13
"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 Debentures and to convert such Debentures into
Common Stock on behalf of such holder. Such notice is substantially in the form
set forth in Exhibit E.
"NYSE" means the New York Stock Exchange.
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, any Vice President, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary,
of the Depositor, and delivered to the Property Trustee. The officer signing an
Officer's Certificate given pursuant to Section 8.15 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officer's
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 Officer's
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 Officer's 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 reasonably acceptable to the Property
Trustee. Any Opinion of Counsel delivered
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<PAGE> 14
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 April 1 (April 2 in the case of 2001) in each of the following years
indicated:
<TABLE>
<CAPTION>
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
<S> <C> <C> <C>
2001 103.438% 2004 101.375%
2002 102.750 2005 100.688
2003 102.063 2008 and thereafter 100.000
</TABLE>
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.
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
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<PAGE> 15
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 actually 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 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
C.
"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.
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<PAGE> 16
"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 Person 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 March
18, 1998 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 to the date of
redemption.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated March 24, 1998, among the Depositor, the Trust, and the
Purchasers named in the Purchase Agreement.
"RELEVANT RECORD DATE" has the meaning specified in Section 4.1(d).
"RELEVANT TRUSTEE" has the meaning specified in Section 8.9.
"RESPONSIBLE OFFICER" means any officer within the Corporate Trust
Office of the Property Trustee with direct responsibility for the administration
of this Declaration and also means, with respect to a particular corporate trust
matter, any other officer of the Property Trustee to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"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 Rule 144A Global Certificate and the Institutional Accredited
Investor Global Certificate.
"RESTRICTED SECURITIES CERTIFICATE" means a certificate substantially
in the form set forth in Exhibit D.
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<PAGE> 17
"RESTRICTED SECURITIES LEGEND" has the meaning specified in Section
5.15(a).
"RULE 144A GLOBAL CERTIFICATE" has the meaning specified in Section
5.2.
"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.
"SHELF REGISTRATION STATEMENT" means that certain shelf registration
statement to be filed with the Commission in accordance with the Registration
Rights Agreement.
"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 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 March 18, 1998, there is more than an
insubstantial risk in each case after the date hereof that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income received or accrued on the Debentures, (ii)
interest paid by the Depositor on the Debentures is not, or within 90 days of
the date thereof will not be, deductible by the Depositor when paid, 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.
"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
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<PAGE> 18
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 Rule 144A 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 C, but without the Restricted Securities
Legend.
ARTICLE 2
ESTABLISHMENT OF THE TRUST
SECTION 2.1. Name. The Trust continued hereby shall be known as "SUIZA
CAPITAL TRUST II", 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 Rodney
Square North, 1100 North Market Street, Wilmington, Delaware, 19890-0001,
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 3811 Turtle Creek Boulevard, Suite 1300, Dallas, Texas 75219.
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; provided, however, that such expenses paid by any Trustee shall have
been paid in accordance with the limitations enumerated 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 March 18,
1998, the Depositor as sponsor 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
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<PAGE> 19
Purchasers named therein Preferred Securities Certificates, in an aggregate
amount of 12,000,000 Preferred Securities having an aggregate Liquidation Amount
of $600,000,000, against receipt of the aggregate purchase price of such
Preferred Securities of $600,000,000, 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, (a) 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 371,135 Common Securities having an aggregate Liquidation Amount of
$18,556,750 against receipt of the aggregate purchase price of such Common
Securities from the Depositor of the sum of $18,556,750 and (b) the
Administrative Trustees, on behalf of the Trust, shall subscribe to and purchase
from the Depositor the Debentures, registered in the name of the Property
Trustee (in its capacity as such) and having an aggregate principal amount equal
to $618,556,750, 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 $618,556,750.
SECTION 2.6. Declaration of Trust; Intent Clause. 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, including, without
limitation, those activities specified in Sections 2.7(a), 2.7(c), 8.1 and 8.3.
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. It
is the intent of the parties hereto that the Trust qualify as a grantor trust
for United States federal income tax purposes. Securityholders, by their
purchase of Trust Securities, agree to treat the Trust as such in all tax and
accounting filings. Any ambiguity in this Agreement shall be interpreted in a
manner consistent with such classification. 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 of, 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 a
Trustee of the Trust for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Delaware Business Trust Act. In the event
the Delaware Trustee shall at any time be required to take any action or perform
any duty under this Declaration, the Delaware Trustee shall be entitled to the
benefits of Sections 8.1 and 8.3. No implied covenants or obligations shall be
read into this Declaration against the Delaware Trustee.
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
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<PAGE> 20
the limitations set forth in Section 2.6 and paragraph (b) of this Section 2.7,
and in accordance with the following provisions (i) and (ii), the Property
Trustee and the Administrative Trustees shall have the exclusive power and
authority, and are hereby authorized and directed to, cause the Trust to engage
in the following activities:
(i) As among the Trustees, each Administrative Trustee shall
have the power and authority and is hereby authorized and directed to
act on behalf of the Trust with respect to the following matters:
(A) to execute, deliver, 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, provided, further, that 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 exercise of 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 the Debentures to be held
of record in the name of the Property Trustee for the benefit
of the Securityholders;
(C) 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 each other
agreement and instrument (including, without limitation, such
certificates and cross-receipts as may be necessary in
connection with the issuance and sale of the Trust Securities
and the purchase of the Debentures) as such Administrative
Trustee deems necessary or incidental to the purposes and
function of the Trust;
(D) to assist in the registration of the Preferred
Securities, Guarantee and the shares of Common Stock
underlying the Debentures upon conversion thereof 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 and to cause
the Trust to take any action deemed in such Administrative
Trustee's discretion to be necessary, advisable or convenient
to comply with the Trust's obligations under the Trust
Indenture Act;
(E) 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
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and other documents pursuant to the foregoing (only to the
extent that such listing or registration is requested by the
Depositor);
(F) to appoint a Paying Agent, Conversion Agent,
authenticating agent and a Securities Registrar in accordance
with this Declaration;
(G) 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;
(H) to execute on behalf of the Trust (either acting
alone or together with any other Administrative Trustees) any
documents that the Administrative Trustees have the power to
execute pursuant to this Declaration; and
(I) to take any action incidental to the foregoing as
the Administrative Trustees may from time to time determine in
their discretion is necessary, advisable or convenient 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) ensuring 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;
(iii) causing the Trust not to be classified
for United States Federal income tax purposes as a
corporation; and
(iv) 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 and authority and is hereby authorized and directed to act on
behalf of the Trust with respect to the following matters:
(A) the establishment of the Property Account;
(B) to authenticate Preferred Securities delivered to
it for authentication by or on behalf of an Administrative
Trustee;
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(C) the receipt of and taking title to the
Debentures;
(D) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Property Account;
(E) the distribution from the Trust Property of
amounts owed to the Securityholders in respect of the Trust
Securities pursuant to this Declaration;
(F) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
(G) 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;
(H) the distribution of the Trust Property in
accordance with the terms of this Declaration;
(I) 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;
(J) the taking of any action incidental to the
foregoing (including executing any certificate or
acknowledgment of the Property Trustee's receipt of the
Debentures) 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);
(K) 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);
(L) to act as Paying Agent, Conversion Agent and/or
Securities Registrar to the extent appointed as such hereunder
and executing and delivering letters, documents or instruments
with the Clearing Agency relating to the Preferred Securities;
including, without limitation, the Certificate Depositary
Agreement, and
(M) 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, the Trustees shall not
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and the Administrative Trustees 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, to such Trustee's actual
knowledge, 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, 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 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 the Administrative Trustees deem
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
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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 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.
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ARTICLE 4
DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION
SECTION 4.1. Distributions. (a) Distributions on the Trust Securities
will accumulate from March 24, 1998, or the most recent Distribution Date to
which Distributions have been paid in full and, except in the event that the
Depositor exercises its right to defer the payment of amounts due under the
Debentures pursuant to the Indenture, shall be payable quarterly in arrears on
January 1, April 1, July 1, and October 1 of each year to the holders of record
of the Preferred Securities on the Relevant Record Date, commencing on July 1,
1998 (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. In the event any date on which
Distributions are payable on the Trust Securities is not a Business Day, the
payment of such Distributions payable on such date shall 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 the relevant Distribution Payment 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 5 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 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 any accrued and unpaid Additional Sums, Additional Amounts
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 actually received by the Property
Trustee and 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 or Redemption Date, if applicable, 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 Business Day) next preceding such Distribution
Date or Redemption Date (the "RELEVANT RECORD DATE"). Subject to Section 4.5
hereof, all Distributions shall be made pro rata.
SECTION 4.2. Redemption. (a) (i) Upon an optional redemption (as
provided for in the Indenture) of Debentures, the proceeds from such redemption
to the extent actually received by the Property Trustee shall be applied to
redeem Trust Securities having an aggregate
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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, pro rata, having an aggregate Liquidation Amount equal
to the aggregate principal amount of the Debentures so redeemed by the
Depositor, at the Redemption Price. The Trust shall not redeem the Trust
Securities unless, on or before the date the Trust gives notice of redemption to
the Securityholders, all accrued and unpaid Distributions for all quarterly
payment periods ending on or prior to the most recent Distribution Date have
been paid in full on all outstanding Preferred Securities.
(ii) If at any time less than five percent (5%) in principal amount of
the Debentures originally issued by the Depositor remain outstanding, such
Debentures shall be redeemable, at the option of the Depositor, in whole but not
in part, at the Redemption Price; in such event, the proceeds from such
redemption to the extent actually received by the Property Trustee shall be
applied to redeem the Outstanding Trust Securities.
(b) Notice of any redemption (optional or mandatory) of Trust
Securities (which notice will be irrevocable) shall be prepared by or on behalf
of the Administrative Trustees and delivered to the Property Trustee, and shall
then be given by the Property Trustee by first-class mail, postage prepaid,
mailed to the Depositor and each Holder of Trust Securities to be redeemed not
less than 30 nor more than 60 days prior to the Redemption Date, 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 in accordance with
Section 4.2(e);
(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, will 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 privileges; and
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(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.
(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 actually received by
the Property Trustee and 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 shall, 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 Clearing
Agency 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
(including the accumulation of Distributions and conversion rights of Trust
Securities), 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 Price or Optional Redemption Price, as the case may be, and
such Trust Securities will cease to be Outstanding. In the event that any date
fixed for redemption of Trust Securities 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 shall be made on the next succeeding day which is a
Business Day (without interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next 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 the 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.
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(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, 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 (unless the
Property Trustee is then serving as the Securities Registrar and 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 its 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 Trust
Securities shall relate, in the case of any Trust Securities redeemed or to be
redeemed only in part, to the portion of the Liquidation Amount of Trust
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 of the Preferred Securities to
be redeemed and ending at the close of business on the earliest date in which
the relevant notice of redemption is deemed to have been given to all holders of
Preferred Securities to be so redeemed pursuant to Section 10.8 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 4.3, shall have the right at any time
beginning 90 days following the first date of original issuance of the Trust
Securities through 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 Common Stock in the manner described herein on and
subject to the following terms and conditions:
(a) The Trust Securities will be convertible into fully paid and
nonassessable shares of Common Stock pursuant to the Holder's direction to the
Conversion Agent to exchange such Trust Securities for a portion of the
Debentures equal in principal amount to the aggregate Liquidation Amount of the
Trust Securities to be converted, and immediately convert such amount of
Debentures into fully paid and nonassessable shares of Common Stock at an
initial conversion price of $78.25 per share of Common Stock, subject to certain
adjustments set forth in the Indenture (as so adjusted, the "CONVERSION PRICE"),
which is equivalent to an initial conversion rate of 0.6390 shares of Common
Stock for each Trust Security.
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(b) In order to convert Trust Securities into Common Stock, the Holder
of such Trust Securities shall submit to the Conversion Agent an Irrevocable
Notice of Conversion (in substantially the form of Exhibit E hereto) 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 Common Stock should be issued
and (ii) direct the Conversion Agent (a) to exchange such Trust Securities for a
portion of the Debentures equal in principal amount to the aggregate Liquidation
Amount of the Trust Securities to be converted 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 Common Stock
and, if applicable, other securities, cash or property (at the conversion rate
specified in the preceding paragraph). The Conversion Agent shall 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 4.3. 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, as a result of the Depositor's exercise
of its right to defer payment of amounts due under the Debentures pursuant to
the Indenture or otherwise, 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. The Depositor, and accordingly the
Trust, will make no payment or allowance for dividends paid on shares of Common
Stock prior to the date shares of Common Stock are 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 Common Stock issuable upon conversion of the
Debentures shall be treated for all purposes as the record holder or holders of
such 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 pursuant to Section 4.3(d), and the Conversion
Agent shall distribute such certificate or certificates to such Person or
Persons.
(c) Each Holder of a Trust Security by its acceptance thereof initially
appoints the Property Trustee as conversion agent (the "CONVERSION AGENT"), for
the purpose of effecting the conversion of Trust Securities in accordance with
this Section 4.3. In effecting the conversion and transactions described in this
Section 4.3, the Conversion Agent shall be acting as agent of the Holders of
Trust Securities directing it to effect such conversion transactions. The
Conversion
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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 4.3 and (ii) to convert all or a
portion of the Debentures into Common Stock and thereupon to deliver such shares
of Common Stock in accordance with the provisions of this Section 4.3 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
Indenture Trustee.
(d) No fractional shares of 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
duly 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.
(e) 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, except that such
amounts will not be withheld if Securityholders satisfy the Property Trustee in
its sole discretion that no taxes are due.
(f) The provisions of this Declaration, including Sections 8.1, 8.3 and
8.6, shall apply to the Property Trustee also in its capacity as Conversion
Agent.
SECTION 4.4. Special Event Exchange or Redemption. (a) If a Special
Event shall occur and be continuing, 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 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; provided, however, that the Depositor shall be required
to comply with Section 4.4(a)(i) to the extent Trust Securities are not
exchanged or redeemed. 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) April 2, 2001.
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 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
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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 Securities Register. 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 Preferred Securities Certificates, the
Property Trustee shall provide for the selection for exchange of a portion of
the Rule 144A 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 Rule 144A
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 Rule 144A 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
Administrative Trustees shall prepare and the Property Trustee shall
authenticate 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 unexchanged 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 Rule 144A Global Certificate representing the
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Preferred Securities to be exchanged for a registered Rule 144A 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.
SECTION 4.5. Subordination of Common Securities. Payment of
Distributions 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 a Responsible Officer of the Property Trustee has actual
knowledge that a Debenture Event of Default under clauses (a) or (b) of Section
5.1 of the Indenture shall have occurred and be continuing, no payment of any
Distribution 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 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 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,
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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 Holder a Form 1099 or the appropriate
Internal Revenue Service form required to be furnished to such Holder 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
Administrative Trustees and the Property Trustee 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.
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 RULE 144A GLOBAL
CERTIFICATE"). Preferred Securities transferred in accordance with Section 5.4
in a manner exempt from the registration requirements of the Securities Act or
pursuant to Section 5.13 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
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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 signature of an authorized signatory of the Property Trustee and
shall be dated as of the date of such authentication. 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,
such register 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. The provisions of this
Declaration, including Sections 8.1, 8.3 and 8.6, shall apply to the Property
Trustee in its role as 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, an Administrative Trustee shall execute, and
the Property Trustee shall authenticate and deliver, in the name of the
designated
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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 of the Depositor. Whenever any Preferred Securities are so surrendered
for exchange, an Administrative Trustee 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 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 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 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) A beneficial interest in a Rule 144A Global Certificate may be
exchanged for a Certificated Preferred Security in connection with certain
transfers exempt from registration under the Securities Act, but only upon the
delivery of such certificates and legal opinions as may be required by, and to
the satisfaction of, the Administrative Trustees and the Property Trustee.
(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, subject to the
following:
(i) subject to the following Clauses of this Section 5.4(c), a
Certificated Preferred Security or any portion thereof which is
exchanged upon transfer or otherwise, for a Rule 144A Global
Certificate or any portion thereof shall bear the Securities Act Legend
borne by such Rule 144A Global Certificate while represented thereby;
(ii) 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
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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;
(iii) 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 Rule 144A 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, an Administrative Trustee shall execute on behalf of
the Trust and 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; and
(iv) notwithstanding the foregoing provisions of this Section
5.4(c), a Successor Security of a Preferred Security that does not bear
a particular form of Securities Act Legend shall not bear such form of
legend unless an Administrative Trustee has reasonable cause to believe
that such Successor Security is a "restricted security" within the
meaning of Rule 144, in which case an Administrative Trustee shall
execute on behalf of the Trust and the Property Trustee, at the
direction of any Administrative Trustee, 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 been acquired by a protected
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available to the Property Trustee 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, and the Property Trustee shall authenticate
a new Trust Securities Certificate of like denomination. In connection with the
issuance of any new Trust Securities Certificate under this Section 5.5, 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 5.5
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.
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The provisions of this Section 5.5 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 Property 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 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 Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration, as
its principal corporate trust office for such purposes. The Securities Registrar
shall give prompt written notice to the 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
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
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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
this Declaration, including 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. Except in connection
with mergers, acquisitions, consolidations or other transactions provided for in
Section 8.1 of the Indenture and the pledge of Common Securities by the
Depositor to secure indebtedness, 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 COMMON SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN
EFFECTIVE REGISTRATION STATEMENT."
SECTION 5.11. Global Securities; Non-Global Securities; Common
Securities Certificate. (a) Each Rule 144A Global Certificate authenticated
under this Declaration shall be registered in the name of the Clearing Agency
designated by the Depositor for such Rule 144A Global Certificate or a nominee
thereof and delivered to such Clearing Agency or a nominee thereof or custodian
therefor, which initially shall be the Property Trustee, and each such Rule 144A
Global Certificate shall constitute a Preferred Security for all purposes of
this Declaration.
(b) If a Rule 144A 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
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nominee or custodian to the Property Trustee, as Securities Registrar, for
exchange or cancellation as provided in this Article 5. If any Rule 144A 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 Rule 144A Global Certificate, in each case, as
provided in Section 5.4, then either (i) such Rule 144A 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 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 Rule 144A 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 Rule 144A
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 Rule 144A
Global Certificates. The Property 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.
(c) Every Preferred Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Rule 144A
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
Rule 144A Global Certificate, unless such Preferred Security is registered in
the name of a Person other than the Clearing Agency for such Rule 144A Global
Certificate or a nominee thereof.
(d) The Clearing Agency or its nominee, as registered owner of a Rule
144A Global Certificate, shall be the holder of such Rule 144A Global
Certificate for all purposes under the Declaration and the Preferred Securities,
and owners of beneficial interests in a Rule 144A Global Certificate shall hold
such interests pursuant to the Applicable Procedures. Accordingly, any such
Owner's beneficial interest in a Rule 144A 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 Rule 144A Global Certificate will not be
considered the owners or holders of such Rule 144A 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 Agency. To the extent that a notice
or other communication to the Owners is required under this Declaration, unless
and until Definitive
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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 Agency, and shall have no
obligations to provide notices directly to the Owners.
SECTION 5.13. Definitive Preferred Securities Certificates.
Notwithstanding any other provision in this Declaration other than as provided
for in Section 5.4(b), no Rule 144A Global Certificate may be exchanged in whole
or in part for Preferred Securities registered, and no transfer of a Rule 144A
Global Certificate in whole or in part may be registered, in the name of any
Person other than the Clearing Agency for such Rule 144A Global Certificate or a
nominee thereof unless (i) such Clearing Agency has notified the Depositor and
the Property Trustee that it is (A) unwilling or unable to continue as Clearing
Agency for such Rule 144A 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
they elect 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 Rule 144A 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 Agency (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 to subscribe for
additional Trust Securities 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. The Restricted Rule 144A 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 (OR ITS PREDECESSOR) 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, SOLD, PLEDGE OR OTHERWISE TRANSFERRED WITHIN
THE UNITED STATES OR TO, OR FOR THE
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ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (2) AGREES THAT IT WILL NOT 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 SUIZA FOODS CORPORATION OR A SUBSIDIARY
THEREOF, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A UNDER THE SECURITIES ACT, OR (C) 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 CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT), TOGETHER WITH SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUIZA FOODS CORPORATION, THE TRUSTEE OR THE TRANSFER AGENT, AS
APPLICABLE, 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.
ARTICLE 6
ACT OF SECURITYHOLDERS; MEETINGS; VOTING;
AMENDMENT OF THE DECLARATION"
SECTION 6.1. Limitations on Voting Rights. (a) Except as provided in
this Section 6.1 and Sections 8.9 and 10.2, in the Indenture, in the Guarantee
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.
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(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 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 (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 Trust Securities, and any amendments of the Declaration shall become
effective when notice thereof is given to the Holders of Trust.
(ii) The Declaration may be amended by the Depositor and the Trustees
with (i) the consent of Holders representing not less than a majority (based
upon Liquidation Amounts) of the Outstanding Trust Securities, acting as a
single class, and (ii) receipt by the Trustees of an Opinion of Counsel having a
national tax and securities practice (which opinion shall not have been
rescinded) 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
Trust Securities, the 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 Holder of
Securities to institute suit for the enforcement of any such payment on or after
such date.
(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 direct the exercise of 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
Administrative Trustees and the Property Trustee shall not (A) direct
the time, method
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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, (B) waive any past
default that 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 the Indenture expressly provides that a consent
thereunder 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 Administrative Trustees and the Property Trustee 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 each Holder of the Preferred Securities of any notice of default
received from the Indenture 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
Administrative Trustees and the Property Trustee 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
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 Administrative Trustees and the Property Trustee shall not
(A) 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, (B) waive any past default that 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
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of the Holders of all Trust Securities, voting together as a single
class); provided, however, that where the Indenture expressly provides
that a consent thereunder 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 Administrative Trustees and the Property Trustee
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 Indenture 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
Administrative Trustees and the Property Trustee 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 of the Declaration provides for, or the
Administrative Trustees and the Property Trustee 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 Administrative Trustees 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.
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
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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. 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 on behalf of the Trust 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.
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
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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 evidenced
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 6.8.
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 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
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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 Guarantee 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 of
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
March 24, 1998, of the Guarantor 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 Delaware;
(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
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has taken all necessary action to authorize the execution, delivery and
performance by it of this Declaration;
(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 any properties included in the
Trust Property pursuant to the provisions of, any indenture, mortgage, credit
agreement, license or other agreement or instrument which is not included or
related to the transactions contemplated by this Declaration and 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 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 Delaware or United States federal governmental
authority or agency under the laws of the United States or the State of Delaware
governing the banking or trust powers of the Property Trustee or the Delaware
Trustee, as the case may be;
(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:
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(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
(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 them. Whether or not herein 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
8.1. 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 or 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) Subject to any Direct Action by Holders of Preferred Securities,
all payments made by the Property Trustee or a Paying Agent in respect of the
Trust Securities shall be made only
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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.
(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 8.1;
(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 upon which such judgment
was made;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority of the
aggregate Liquidation Amount of the Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Declaration; and
(iv) 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 in writing 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.
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SECTION 8.2. Notice of Defaults. (a) Within ten days after a
Responsible Officer shall obtain actual knowledge of the occurrence of any Event
of Default, 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
Responsible Officer shall have actual knowledge that 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 a Responsible Officer 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 written notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Property 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.
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(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 aggregate Liquidation Amount of the Common Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided, further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and 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 in
accordance with the terms of the Preferred Securities 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.
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SECTION 8.3. Certain Rights of Property Trustee. Subject to the
provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be protected
in acting or refraining from acting in good faith upon any resolution, Opinion
of Counsel, certificate, written representation or instruction 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, sent or presented by the
proper party or parties;
(b) if, (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 specifically 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 and shall have no liability
whatsoever for such action or inaction except for its own bad faith, negligence
or willful misconduct; 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 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 Securityholders, in which event the Property Trustee shall have
no liability except for its own bad faith, negligence or willful misconduct;
(c) if a Responsible Officer of the Property Trustee has obtained
actual knowledge that an 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 specifically entitled to vote under the terms of this
Declaration, the Property Trustee may deliver a notice to the Holders requesting
written instructions of the Holders 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 a majority in interest of the Outstanding Preferred Securities
and shall have no liability whatsoever for such action or inaction; provided,
however, that if the Property Trustee does not receive such instructions of the
Holders within ten Business Days after it has delivered such notice, or such
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
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it shall deem advisable and in the best interests of the Holders, in which event
the Property Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;
(d) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Declaration shall be sufficiently evidenced by an
Officer's Certificate and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(e) 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 Officer's Certificate and an Opinion of
Counsel which, upon receipt of such request, shall be promptly delivered by the
Depositor or the Administrative Trustees;
(f) 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;
(g) the Property Trustee may consult with counsel and other experts 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 or opinion of
such counsel and experts 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 or opinion; 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;
(h) 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 security and
indemnity, reasonably satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the expenses of
the Property Trustee's agents, nominees or custodians) and liabilities which
might be incurred by it in compliance with such request or direction, including
such reasonable advances as may be requested by the Property Trustee;
(i) 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, direction, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, unless specifically requested and directed in writing to do so by
Holders of record of 25% or more of the Preferred Securities (based upon their
aggregate Liquidation Amount), but the Property Trustee may in its discretion
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, custodians,
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nominees or attorneys or an Affiliate, provided that the Property
Trustee shall be responsible for its own negligence with respect to
selection of any agent or attorney appointed by it hereunder but shall
not be responsible for any misconduct or negligence on the part of such
Person;
(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 instructions from the
Holders of the Trust Securities, which instructions may only be given
by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee
under the terms of the Trust Securities in respect of such remedy,
right or action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
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.
(j) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Securities as would be entitled to direct the Property Trustee under the terms
of the Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively relying
on or acting in accordance with such instructions;
(k) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Declaration; and
(l) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without negligence or
willful misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this 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.
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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. The
Trustees make no representations as to the value or condition of the Trust
Property or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration or the Trust Securities.
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 in writing 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 each
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by such Trustee 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) the Bank, (ii) each Trustee, (iii) any Affiliate of the Bank
or any Trustee, (iii) any officer, director, shareholder, employee,
representative or agent of any Trustee, and (iv) any employee or agent of the
Trust or its Affiliates (each referred to herein as an "INDEMNIFIED PERSON")
from and against any loss, damage, liability, tax, penalty, 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 to the extent incurred by
such Indemnified Person by reason of its own negligence or willful misconduct
with respect to such acts or omissions;
(d) to the fullest extent permitted by applicable law, to advance, from
time to time, prior to the final disposition of any claim, demand, action, suit
or proceeding for which indemnification is authorized pursuant to subsection (c)
above, any expenses (including reasonable
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legal fees) incurred by an Indemnified Person in defending such claim, demand,
action, suit or proceeding upon receipt by the Depositor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in subsection (c) above. This indemnification shall survive the
termination of this Declaration.
(e) 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; and
(f) The obligations to indemnify and hold harmless, to advance expenses
and to provide reimbursement and pay compensation as set forth in this Section
8.6 shall survive the resignation or removal of the Property Trustee or the
Delaware Trustee and the satisfaction and discharge of this Declaration.
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
8.7, 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 8.7, 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
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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 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
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(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 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
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the Depositor or the successor Trustee, such retiring Trustee shall, upon
payment of all amounts due to it under this Declaration, 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 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, upon payment of all amounts due to it under this
Declaration, 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
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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, if Property Trustee has
not complied in any material respects with such obligations, a
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 Officer's Certificate.
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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), 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 April 1, 2028 (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);
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(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 not otherwise redeemed 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 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 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 Administrative Trustees as
expeditiously as the Administrative 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 prepared by or
on behalf of the Administrative Trustees and given by the Property Trustee by
first-class mail, postage prepaid, mailed not less 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
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(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 Rule 144A Global Certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any Trust Securities Certificates not held by or on behalf of 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 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 legally 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
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<PAGE> 65
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 as
described below. The Trust may, 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 Trust 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, however, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Trust 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 (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 Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an opinion from counsel to the Trust (which may be
counsel to the Depositor) having a national tax and securities law practice
(which opinion shall not have been rescinded) 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 Trust nor such successor
entity will be required to register as an "investment company" under the 1940
Act, 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 for
United States federal income tax purposes cause (i) the holders of the Preferred
Securities to
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recognize gain or loss or (ii) the Trust or the successor entity to be
classified as other than a grantor trust.
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) 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.
(b) 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.
(c) None of the Bank, the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Declaration, including to
this Section 10.2(c), which affects its own rights, power, duties, obligations
or immunities under this Declaration without its prior written consent, and any
such amendment or purported amendment, including to this Section 10.2(c), shall
be void and ineffective without such prior written consent, which consent may be
withheld in its sole discretion. The Property Trustee shall be entitled to
receive an Opinion of Counsel and an Officer's 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,
THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, 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
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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, and (b) in the case of the Holder of the Common Securities, to such
Holder as such Holder's name and address may appear on the Securities Register;.
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
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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 Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington, Delaware,
19890-0001, Attention: Corporate Trust Administration, (b) with respect to the
Delaware Trustee, to Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware, 19890-0001, Attention: Corporate Trust
Administration, 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.
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(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 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 and the Depositor 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Declaration to
be duly executed as of the day and year first above written.
SUIZA FOODS CORPORATION,
as Depositor
By: /s/ Gregg L. Engles
----------------------------------------
Name: Gregg L. Engles
Title: Chairman & CEO
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Property Trustee
By: /s/ Patricia A. Evans
----------------------------------------
Name: Patricia A. Evans
Title: Financial Services Officer
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Delaware Trustee
By: /s/ Patricia A. Evans
----------------------------------------
Name: Patricia A. Evans
Title: Financial Services Officer
/s/ Tracy L. Noll
-------------------------------------------
Tracy L. Noll,
not in his individual capacity but solely as
Administrative Trustee
/s/ J. Michael Lewis
-------------------------------------------
J. Michael Lewis,
not in his individual capacity but solely as
Administrative Trustee
/s/ Joseph B. Armes
--------------------------------------------
Joseph B. Armes,
not in his individual capacity but solely as
Administrative Trustee
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EXHIBIT A
CERTIFICATE OF TRUST
OF
SUIZA CAPITAL TRUST II
A-1
<PAGE> 72
EXHIBIT B
THE SECURITY (OR ITS PREDECESSOR) 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, SOLD, PLEDGE OR OTHERWISE
TRANSFERRED 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), (2) AGREES THAT IT
WILL NOT 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 SUIZA FOODS CORPORATION OR A SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE
SECURITIES ACT, OR (C) 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, IF THIS CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT), TOGETHER WITH SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUIZA FOODS CORPORATION, THE TRUSTEE OR THE TRANSFER AGENT, AS
APPLICABLE, 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.
B-1
<PAGE> 73
THIS COMMON SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EXEMPTION FROM REGISTRATION
OR AN EFFECTIVE REGISTRATION STATEMENT
Certificate Number Number of Common Securities
[ ] [ ]
Certificate Evidencing Common Securities
of
Suiza Capital Trust II
5 1/2% Trust Convertible Common Securities
(Liquidation Amount $50 per Common Security)
Suiza Capital Trust II, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Suiza Foods
Corporation (the "Holder") is the registered owner of [ ] 5 1/2% Trust
Convertible Common Securities of the Trust representing undivided beneficial
interests in the assets of the Trust (the "Common Securities"). In accordance
with Section 5.10 of the Declaration (as defined below) the Common Securities
are not transferable (except in connection with mergers, acquisitions,
consolidations, or other transactions provided for in Section 8.1 of the
Indenture (as defined in the Amended and Restated Declaration of Trust dated as
of March 24, 1998, as the same may be amended from time to time (the
"DECLARATION")) and the pledge of the Common Securities by the Depositor to
secure indebtedness) and any attempted transfer hereof shall be void. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to, the terms and provisions of, the Declaration, including the
designation of the terms of the Common Securities as set forth therein. The
Holder is entitled to the benefits of the Common Securities Guarantee Agreement
entered into by Suiza Foods Corporation, a Delaware corporation, dated as of
March 24, 1998 (the "Guarantee"), to the extent provided therein. The Trust will
furnish a copy of the Declaration and the Guarantee to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
As set forth in the Declaration, where an Event of Default has occurred
and is continuing, the rights of Holders of Common Securities to payment in
respect of Distributions and payments upon Liquidation, redemption or otherwise
are subordinated to the rights of payment of Holders of the Preferred
Securities.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
B-2
<PAGE> 74
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of undivided beneficial ownership in the
Debentures.
B-3
<PAGE> 75
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this 24th day of March, 1998.
SUIZA CAPITAL TRUST II
By:
------------------------------
Name:
As Administrative Trustee
B-4
<PAGE> 76
EXHIBIT C
{IF THE PREFERRED SECURITY IS TO BE A RULE 144A GLOBAL CERTIFICATE,
INSERT - 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 Suiza Capital Trust II 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
OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
Certificate Number Number of Preferred Securities
--- CUSIP NO.
Certificate Evidencing Preferred Securities
of
Suiza Capital Trust II
5 1/2% Trust Convertible Preferred Securities
(Liquidation Amount $50 per Preferred Security)
Suiza Capital Trust II, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_____________________ (the "Holder") is the registered owner of _____________
preferred securities of the Trust representing an undivided beneficial interest
in the assets of the Trust and designated the Suiza Capital Trust II 5 1/2%
Trust 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 below). 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 Trust, dated as of March 24, 1998 as the same may be
amended from time to time (the "Declaration") including the designation of the
terms of Preferred Securities as set forth therein. The Holder is entitled to
the benefits of the Guarantee Agreement entered into
C-1
<PAGE> 77
by Suiza Foods Corporation, a Delaware corporation, and Wilmington Trust
Company, as Guarantee Trustee, dated as of March 24, 1998 (the "Guarantee"), to
the extent provided therein. The Trust will furnish a copy of the Declaration
and the Guarantee to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
C-2
<PAGE> 78
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate.
SUIZA CAPITAL TRUST II
By:
-----------------------------
Name:
an Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated:
WILMINGTON TRUST COMPANY,
as Property Trustee
By:
-----------------------------
Authorized Signatory
C-3
<PAGE> 79
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
--------------------------------
Signature:
---------------------------
(Sign exactly as our name appears on the other side of this
Preferred Security Certificate)
C-4
<PAGE> 80
{TO BE ATTACHED TO RULE 144A GLOBAL CERTIFICATE}
SCHEDULE A
The initial number of Preferred Securities represented by this Rule
144A Global Certificate shall be _____________. The following increases or
decreases in the number of Preferred Securities represented by this Rule 144A
Global Certificate have been made:
<TABLE>
<CAPTION>
=====================================================================================================================
Date Made Amount of increase Amount of increase Number of Preferred Signature of
in number of in number of Securities authorized officer
Preferred Securities Preferred Securities represented by this of Trustee or
represented by this represented by this Global Certificate Securities Custodian
Rule 144A Global Rule 144A Global following such
Certificate Certificate decrease or increase
<S> <C> <C> <C> <C>
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
- ------------------------ ---------------------- ---------------------- ----------------------- ----------------------
=====================================================================================================================
</TABLE>
C-5
<PAGE> 81
EXHIBIT D -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to the Declaration)
Wilmington Trust Company
as Property Trustee of
Suiza Capital Trust II
Rodney Square North
1100 North Market Street
Wilmington, Delaware, 19890-0001
Attention: Corporate Trust Administration
Re: % Trust Convertible Preferred Securities (Liquidation Amount $50 per
Preferred Security) of Suiza Capital Trust II (the "Securities")
-------------------------------------------------------------------------
Reference is made to the Amended and Restated Declaration of Trust,
dated as of March 24, 1998 (the "Declaration"), among Suiza Foods Corporation
(the "Company"), and the Trustees named therein and the holders, from time to
time, of undivided beneficial interests in the Trust. Terms used herein and
defined in the Declaration or Rule 144 under the U.S. Securities Act of 1933, as
amended (the "Securities Act") are used herein as so defined.
This certificate relates to ________ shares of Securities, which are
evidenced by the following certificate(s) (the "Specified Securities"):
CUSIP No(s).
-------------------------------------
CERTIFICATE No(s).
--------------------------------
The Person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Rule 144A Global Certificate,
they are held through the Clearing Agency or participant (a "Clearing Agency")
in the name of the Undersigned, as or on behalf of the Owner. If the Specified
Securities are not represented by a Rule 144A Global Certificate, they are
registered in the name of the Undersigned, as or on behalf of the Owner.
D-1
<PAGE> 82
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A or Rule 144 under the Securities Act and all applicable securities laws of
the states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as follows:
RULE 144 TRANSFERS. IF THE TRANSFER IS BEING EFFECTED PURSUANT TO
RULE 144:
(A) the transfer is occurring after a holding period of at
least two years (computed in accordance with paragraph (d) of Rule 144)
has elapsed since the Specified Securities were last acquired from the
Trust or from an affiliate of the Trust, whichever is later, and is
being effected in accordance with the applicable amount, manner of
sale, and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at
least three years has elapsed since the Specified Securities were last
acquired from the Trust or from an affiliate of the Trust, whichever is
later, and the Owner is not, and during the preceding three months has
not been, an affiliate of the Trust.
This certificate and the statements contained herein are made for your
benefit and benefit of the Trust and the Trustees of the Trust.
Dated:
------------------------------------------
(Print the name of the Undersigned, as such term is defined in the
second paragraph of this certificate.)
By:
------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be
stated.)
D-2
<PAGE> 83
EXHIBIT E
IRREVOCABLE NOTICE OF CONVERSION
(pursuant to Section 4.3)
To: Wilmington Trust Company
as Property Trustee of
Suiza Capital Trust II
and Conversion Agent
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock, par value $0.01 of SUIZA FOODS CORPORATION (the
"Suiza Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust of Suiza Capital Trust II (the "Declaration"), dated as of
March 24, 1998, by Suiza Foods Corporation, as Depositor, the Trustees of the
Trust named therein, and the Holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Preferred Securities, the
undersigned hereby directs the Conversion Agent to (i) exchange such Preferred
Securities for a portion of the Debentures held by the Trust (at the rate of
exchange specified in the terms of the Preferred Securities set forth in the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Suiza Common Stock (at the conversion rate specified in the
terms of the Preferred Securities set forth in the Declaration). Unless
otherwise defined herein, capitalized terms used in this Notice shall have the
respective meanings assigned to such terms in the Declaration.
The undersigned does also hereby direct the Conversion Agent that the
shares of Suiza Common Stock 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 of Suiza Common Stock 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 its conversion rights in accordance
with the terms of the Declaration and the Preferred Securities, agrees to be
bound by the terms of the Registration Rights Agreement relating to the Suiza
Common Stock issuable upon conversion of the Preferred Securities.
Date:
-----------------------
in whole in part
--------- ------
E-1
<PAGE> 84
Number of Preferred Securities
to be converted: _____________-________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in which
the shares of Suiza Common Stock are to
be issued, along with the address or
addresses of such person or persons
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
----------------------------------------
----------------------------------------
----------------------------------------
Signature Guarantee:*
-------------------
- -----------------------------
* (Signature must be guaranteed by an institution which is a member 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 Trustee.)
E-2
<PAGE> 1
EXHIBIT 4.3
SUIZA FOODS CORPORATION
to
WILMINGTON TRUST COMPANY
as Indenture Trustee
INDENTURE
Dated as of March 24, 1998
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
DUE APRIL 1, 2028
<PAGE> 2
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 March 24, 1998.
<TABLE>
<S> <C>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
(Section) 310(a)(1), (2) and (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(Section) 311(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.13
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(Section) 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
7.2(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 c)
(Section) 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3(a); 7.3(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3(c)
(Section) 314(a)(1), (2), (3) and (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(c) (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(Section) 315(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(c)
(d) (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(a)
(d) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.l(c)(ii)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1(c)(iii)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.14
(Section) 316 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.8
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4(f)
(Section) 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
(Section) 318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Convertible Subordinated Indenture.
ii
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Compliance Certificate and Opinions . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 1.3. Forms of Documents Delivered to Indenture Trustee . . . . . . . . . . . . . . . . . 13
SECTION 1.4. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 1.5. Notices, Etc. to Indenture Trustee and Company . . . . . . . . . . . . . . . . . . 16
SECTION 1.6. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.7. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.8. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.9. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.10. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.13. Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.14. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 1.15. Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 2. DEBENTURE FORM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.2. Form of Face of Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.3. Form of Reverse of Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.4. Additional Provisions Required in Global Debenture . . . . . . . . . . . . . . . . 29
SECTION 2.5. Form of Indenture Trustee's Certificate of
Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.6. Initial Issuance to Property Trustee . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 3. THE DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.1. Title and Amount of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.2. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.3. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . 31
SECTION 3.4. Temporary Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.5. Registration, Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Debentures . . . . . . . . . . . . . . . . . 33
SECTION 3.7. Payment of Interest; Interest Rights . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.8. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.9. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.10. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.11. Deferrals of Interest Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.12. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.13. Agreed Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.14. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.15. Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE 4. SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.1. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.2. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 5. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . 43
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.4. Indenture Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.5. Indenture Trustee May Enforce Claim Without
Possession of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.6. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.9. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.12. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.15. Waiver of Usury, Stay, or Extension Laws . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 6. THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.1 Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 6.2 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.3 Certain Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.4 Not Responsible for Recitals or Issuance of Debentures . . . . . . . . . . . . . . 52
SECTION 6.5 May Hold Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.6 Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.7 Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.8 Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.9 Corporate Indenture Trustee Required; Eligibility . . . . . . . . . . . . . . . . . 54
SECTION 6.10 Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . 54
SECTION 6.11 Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.13 Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . 57
SECTION 6.14 Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE 7. HOLDERS LISTS AND REPORTS BY INDENTURE TRUSTEE AND
COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.1 Company to Furnish Names and Addresses of Holders . . . . . . . . . . . . . . . . . 58
SECTION 7.2 Preservation of Information; Communications to Holders . . . . . . . . . . . . . . 59
SECTION 7.3 Reports by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
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<TABLE>
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SECTION 7.4 Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 8. CONSOLIDATION, MERGER, CONTINUANCE, CONVEYANCE,
TRANSFER OR LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.1 Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . 60
SECTION 8.2 Successor Person Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 9. SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.1 Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . 61
SECTION 9.2 Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . 62
SECTION 9.3 Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.4 Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.5 Conformity with Trust Indentures Act . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.6 Reference in Debentures to Supplemental Indentures . . . . . . . . . . . . . . . . 64
ARTICLE 10. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.1 Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.2 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.3 Money for Debenture Payments to Be Held in Trust . . . . . . . . . . . . . . . . . 65
SECTION 10.4 Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.5 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.6 Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.7 Additional Sums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.8 Additional Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.9 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.10 Payment of Expenses of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE 11. REDEMPTION OR EXCHANGE OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.1. Election to Redeem; Notice to Indenture Trustee . . . . . . . . . . . . . . . . . . 69
SECTION 11.2. Selection of Debentures to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.3. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.4. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.5. Debentures Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.6. Debentures Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.7. Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 11.8. Exchange of Trust Securities for Debentures . . . . . . . . . . . . . . . . . . . . 73
ARTICLE 12. SUBORDINATION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 12.1. Debentures Subordinate to Senior Debt . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 12.2. Payment Over of Proceeds Upon Dissolution, Etc. . . . . . . . . . . . . . . . . . . 74
SECTION 12.3. Prior Payment to Senior Debt upon Acceleration
of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.4. Payment Limits by Senior Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 12.5. Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 12.6. Subrogation to Rights of Holders of Senior Debt . . . . . . . . . . . . . . . . . . 76
</TABLE>
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<TABLE>
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SECTION 12.7. Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . 76
SECTION 12.8. Indenture Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . 77
SECTION 12.9. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.10. Notice to Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.11. Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . 78
SECTION 12.12. Indenture Trustee Not Fiduciary for Holders of Senior Debt . . . . . . . . . . . . 78
SECTION 12.13. Rights of Indenture Trustee as Holder of Senior Debt;
Preservation of Indenture Trustee's Rights . . . . . . . . . . . . . . . . . . . . 78
SECTION 12.14. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 12.15. Certain Conversions or Exchanges Deemed . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE 13. CONVERSION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.1. Conversion Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.2. Conversion Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.3. Expiration of Conversion Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 13.4. Conversion Price Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 13.5. Fundamental Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 13.6. Notice of Adjustments of Conversion . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 13.7. Prior Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 13.8. Dividend or Interest Reinvestment Plans . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 13.9. Certain Additional Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 13.10. Restrictions on Common Stock Issuable Upon Conversion . . . . . . . . . . . . . . . 91
SECTION 13.11. Indenture Trustee Not Responsible for Determining
Conversion Price or Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . 91
</TABLE>
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THIS INDENTURE, dated as of March 24, 1998 between SUIZA FOODS
CORPORATION, a Delaware corporation (hereinafter called the "Company") having
its principal office at 3811 Turtle Creek Boulevard, Suite 1300, Dallas, Texas
75219 and Wilmington Trust Company, a Delaware banking corporation ("WTC"), as
Indenture Trustee (hereinafter called the "Indenture Trustee").
RECITALS OF THE COMPANY
WHEREAS, The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its 5 1/2% Convertible
Subordinated Debentures due April 1, 2028 (hereinafter called the "Debentures")
as hereinafter provided which evidence loans made to the Company of the
proceeds from the issuance by Suiza Capital Trust II, 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.
WHEREAS, all things necessary to make the Debentures, when executed by
the Company, authenticated and delivered by the Indenture 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 I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, 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;
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(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
(to the extent permitted by law) 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. The terms "controlling" and "controlled"
have meanings correlative to "control."
"APPLICABLE PRICE" means (i) in the case of a Non-Stock Fundamental
Change in which the holders of the Common Stock receive only cash, the amount
of cash received by a holder of one share of Common Stock and (ii) in the event
of any other Fundamental Change, the average of the daily Current Market Prices
(as defined) for one share of Common Stock during the ten trading days
immediately prior to the record date for determination of the holders of Common
Stock entitled to receive such securities, cash, property or other assets in
connection with such Fundamental Change or, if there is no such record date,
prior to the date upon which the holders of the Common Stock shall have the
right to receive such securities, cash, property or other assets (such record
date or distribution date being hereinafter referred to as the "Entitlement
Date"), in
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<PAGE> 10
each case as adjusted in good faith by the Company to appropriately reflect any
of the events referred to in clauses (a) through (f) of 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.
"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 Indenture Trustee, or the principal office of the
Property 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.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time 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" means common stock, par value $0.01 per share, of the
Company 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.
"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.
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<PAGE> 11
"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, any Vice President, its Treasurer, any
Assistant Treasurer, its Controller, its Secretary or any 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 Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration.
"CURRENT MARKET PRICE" means, with respect to Common Stock of the
Company, the last reported sale price, regular way, on such day, or if no sale
takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the NYSE, or, if
the Common Stock is not quoted on the NYSE on such day, on the principal
national securities exchange or quotation system on which the 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 the 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 National Association of
Securities Dealers, Inc. ("NASD") member firm selected from time to time in
good faith by the Board of Directors of the Company for that purpose or, if not
so available in such manner, as otherwise determined in good faith by the Board
of Directors of the Company.
"DEBENTURES" or "DEBENTURE" means any debt securities or debt
security, as the case 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; (vi) every
obligation of such Person under (a) interest rate swap agreements, interest
rate cap agreements and interest rate
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<PAGE> 12
collar agreements and (b) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates; and (vii) every obligation
of the type referred to in clauses (i) through (vi) 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.
"DECLARATION" means the Amended and Restated 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 from
time to time.
"DEFAULT" means any event that 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."
"EVENTS OF DEFAULT" has the meaning specified in Section 5.1.
"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
or series of transactions or events pursuant to which all or substantially all
of the Common Stock shall be exchanged for, converted into, acquired for, or
constitute solely the right to receive securities, cash, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, continuance, combination, reclassification,
recapitalization, or otherwise); provided, however, that, in the case of any
such series of transactions or events, for purposes of adjustment of the
Conversion Price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Common Stock shall be exchanged for, converted into,
or acquired for or constitute solely the right to receive securities, cash,
property or other assets, but the adjustment shall be based upon the
securities, cash, property or other assets that a holder of
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Common Stock received in a transaction as a result of which more than 50% of
the Common Stock shall have been exchanged for, converted into, or acquired for
or constitute solely the right to receive securities, cash, property or other
assets.
"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.
"INTEREST" with regard to the Debentures shall include quarterly
interest payments, interest on 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 Property 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 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"), there is more than an insubstantial risk that the Trust is or will be
considered an "investment company" that is required
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to be registered under the 1940 Act, which Change in 1940 Act Law becomes
effective on or after March 18, 1998.
"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 the 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 becomes 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 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
Common Stock on behalf of such holder.
"NOTICE OF DEFAULT" has the meaning specified in Section 5.1(d).
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors, the President, the Chief Executive Officer, the Chief
Operating Officer, any Vice President, 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, and who also may
be an employee thereof, and who shall be reasonably acceptable to the Indenture
Trustee.
"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
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than the Company or any affiliate of the Company) in trust for the
Holders of such Debentures; provided, however, 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 Indenture 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
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 Officer's 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(a)(ii), the Indenture Trustee shall be entitled to accept and rely
on such Officer's 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, 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.
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"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.
"PROPERTY TRUSTEE" means, in respect of the Trust, the Person
identified as the "Property Trustee" in the Declaration, solely in its capacity
as Property Trustee of the Trust under the Declaration and not in its
individual capacity, or its successor in interest in such capacity, or any
successor Property Trustee appointed as therein provided.
"PURCHASE AGREEMENT" means the Purchase Agreement dated March 18, 1998
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, Bear, Stearns & Co. Inc.
and J. P. Morgan Securities Inc.
"PURCHASER STOCK PRICE" means, with respect to any Stock Fundamental
Change, the average of the daily Current Market Price for one share of the
common stock received by holders of the Common Stock in such Stock Fundamental
Change during the ten consecutive trading days immediately 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 clauses (a) through (f)
of 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 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" shall initially mean $42.04 (which is an
amount equal to 66 2/3% of the last reported sale price for Common Stock on the
NYSE on March 18, 1998) and, in the event of any adjustment of the conversion
price other than as a result of a Fundamental Change, the Reference Market
Price shall also be adjusted so that the ratio of the Reference Market Price to
the Conversion Price after giving effect to any such adjustment shall always be
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<PAGE> 17
the same as the ratio of the initial Reference Market Price to the initial
Conversion Price of $78.25 per share.
"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 within the Corporate Trust Office of
the Indenture Trustee with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer of the Indenture Trustee to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"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.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SENIOR CREDIT FACILITY" means that certain Credit Agreement, dated as
of November 26, 1997, as amended by Amendment No. 1 to Credit Agreement dated
as of January 2, 1998, Amendment No. 2 dated as of February 20, 1998, and
Amendment No. 3 to Credit Agreement dated as of March 6, 1998, between Suiza
Foods Corporation, the lenders party thereto and First Union National Bank, as
administrative agent, and including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, in each
case, as amended, extended, renewed, restated, supplemented or otherwise
modified (in whole or in part, and without limitation as to amount, terms,
conditions, covenants and other provisions) from time to time, and any
agreement (and related document) governing Debt incurred to refinance, in whole
or in part, the borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or a successor Credit Agreement,
whether by the same or any other lender or group of lenders.
"SENIOR DEBT" means the principal of (and premium, if any), 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 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
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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 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, (ii) any Debt of the Company to any of its
Subsidiaries, (iii) Debt to any employee of the Company, (iv) any liability for
taxes, and (v) Debt or other monetary obligations to trade creditors or assumed
by the Company or any of its Subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services.
"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 Directors of
the Company) of the consideration received by holders of Common Stock consists
of common stock that, for each of the ten consecutive trading days immediately
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 Stock Market; provided, however, 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 or debentures 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 identical to those
of the Preferred Securities or which debentures have terms substantially
similar to those of the Debentures.
"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.
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"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 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 March 18, 1998, there is
more than an insubstantial risk in each case after the date hereof that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income received or accrued on the
Debentures, (ii) interest paid by the Company on the Debentures is not, or
within 90 days of the date thereof will not be, deductible by the Company, in
whole or in part, for United States federal income tax purposes, or (iii) the
Trust is, or will be within 90 days of the date 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.
"TRUST" has the meaning specified in the first recital of this
Indenture.
"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.
"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.
"WTC" has the meaning specified in the introductory paragraph of this
Indenture.
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 Officer's 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
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<PAGE> 20
this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished. The Company covenants that
each such Officer's 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 10.6 and 13.6) 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 or she has made such examination or investigation as is
necessary to enable him or her 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 of counsel or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 1.4. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided 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(a)(ii)) 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 or her 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
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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 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 in the
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manner set forth in Section 1.5 and to each Holder of Debentures in the manner
set forth in Section 1.6.
(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,
however, 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 in the manner set forth in Section 1.5, and to each Holder
of Debentures in the manner set forth in Section 1.6, 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
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<PAGE> 24
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 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, 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
17
<PAGE> 25
shall accrue for the period from and after such Interest Payment Date,
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.
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,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with 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.
SUIZA FOODS CORPORATION
5 1/2% CONVERTIBLE SUBORDINATED DEBENTURE DUE APRIL 1, 2028, $_________
NO. CUSIP NO.
Suiza Foods Corporation, a corporation organized and existing under
the laws of Delaware (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 April 1, 2028 and to
pay interest plus Additional Interest,
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<PAGE> 26
Additional Sums and Liquidated Damages, if any, on said principal sum from
March 24, 1998 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 July 1, 1998 at
the rate of five and one-half percent (5 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 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.
SUIZA FOODS CORPORATION
By:
-----------------------------------
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 $618,556,750, issued
and to be issued under an Indenture, dated as of March 24, 1998 (herein called
the "INDENTURE"), between the Company and Wilmington Trust Company, 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 the 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), 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
date the payment was originally payable. 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
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<PAGE> 27
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
Property 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. 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, Liquidated Damages (if any) and
Additional Sums, as applicable. 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 (relating solely to
clauses (a) and (b) under the definition thereof in Section 5.1 of the
Indenture) has occurred and is continuing, the Company shall have the right
under the Indenture to defer the payment of interest (including any Additional
Sums or Liquidated Damages, if any, under this Debenture, at any time or from
time to time), for a period not exceeding 20 consecutive quarters with respect
to each deferral period (each such deferral period an "EXTENSION PERIOD").
During any such Extension Period, the Company shall not, and shall not permit
any Subsidiary to, (a) declare or pay any dividends on, make distributions with
respect to, 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) issued by the
Company that rank pari passu with or junior to this Debenture (other than with
respect to both (a) and (b) (i) any dividend, redemption, liquidation,
interest, principal or guarantee payment by the Company where the payment is
made with securities (including Capital Stock) that rank pari passu with or
junior to the securities on which such dividend, redemption, liquidation,
interest, principal or guarantee payment is being made, (ii) payments under the
Guarantee, (iii) purchases of Common Stock related to the issuance of 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, other
than dividends with respect to the Company's Series A Preferred 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, however, that no Extension Period shall exceed 20
20
<PAGE> 28
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
amounts then accrued and unpaid, 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 Property Trustee under the Declaration
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 Property Trustee
under the Declaration is (or if no Preferred Securities are outstanding, the
Indenture Trustee is) required to give notice to the New York Stock Exchange 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 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, including the principal
thereof, premium, if any, and interest thereon is, to the extent and in the
manner set forth in the Indenture, expressly subordinated and subject in right
of payment 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, and each Holder of this Debenture, by accepting the same, agrees to
and shall be bound by such provisions and authorizes and directs the Indenture
Trustee on behalf of such Holder to take such action as may be necessary or
appropriate to acknowledge or effectuate, as between the Holder and the holders
of Senior Debt, the subordination as provided in the Indenture and appoints the
Indenture Trustee the attorney-in-fact of such Holder for any and all such
purposes.
At any time on or after April 2, 2001, 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.
21
<PAGE> 29
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 Common Stock (and/or such other cash, securities or property as
then provided for by the Indenture), all as provided in Article 13 of this
Indenture.
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, however,
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. Upon any such declaration, such principal
amount (or specified amount) of and the accrued interest (including any
Additional Interest, Additional Sums and Liquidated Damages, if any) 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 Liquidated Damages, if any) 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 and 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
and Events of Default under the Indenture and their
22
<PAGE> 30
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.
Before sales pursuant to Shelf Registration Statement and prior to end
of Effectiveness Period: The holders of the Preferred Securities, the
Debentures, the Guarantee and the shares of 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 March 24, 1998, 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
resale 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.
If (i) on or prior to the date 90 days after 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 by the Commission (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
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<PAGE> 31
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 set
forth therein, 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.
No director, officer, employee, stockholder or incorporator of the
Company shall 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.
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<PAGE> 32
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.
25
<PAGE> 33
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
(I) or (we) assign and transfer this Debenture to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably 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.
- --------------------
* 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.
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<PAGE> 34
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 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 the 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, 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.
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<PAGE> 35
NOTICE OF CONVERSION
To: Suiza Foods Corporation
The undersigned owner of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or the portion below designated, into
Common Stock of Suiza Foods Corporation 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 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.
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<PAGE> 36
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 (or in the form provided in Section 6.15 in the event that
a separate Authenticating Agent is appointed pursuant thereto:
"This is one of the Debentures designated therein referred to in the
within mentioned Indenture.
WILMINGTON TRUST COMPANY,
as Indenture Trustee
By:
Authorized Signatory
Dated:
"
- ---------------------------------
SECTION 2.6. INITIAL ISSUANCE TO PROPERTY TRUSTEE. The Debentures
initially issued to the Property Trustee of the Trust shall be in the form of
one or more individual certificates in definitive, fully registered form
without distribution coupons and shall bear the following legend (the
"RESTRICTED SECURITIES LEGEND") unless the Company determines otherwise in
accordance with applicable law:
THE SECURITY (OR ITS PREDECESSOR) 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, SOLD,
PLEDGE OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN
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THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT
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 SUIZA FOODS CORPORATION OR A SUBSIDIARY
THEREOF, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, OR (C)
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 DEBENTURES (OR, IF THIS CERTIFICATE
EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE TRANSFER
AGENT), TOGETHER WITH SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS SUIZA FOODS CORPORATION, THE TRUSTEE OR THE TRANSFER
AGENT, AS APPLICABLE, 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.
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 $618,556,750, 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, 11.7 or 11.8. The Debentures shall be known and designated as "5 1/2%
Convertible
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Subordinated Debentures due April 1, 2028." Their Maturity shall be April 1,
2028 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, Chief
Executive Officer, Chief Financial Officer, or one of its Executive Vice
Presidents. 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, and at any time from time to time after the
execution and delivery of this Indenture, Debentures may be executed by the
Company and delivered to the Indenture Trustee for authentication, together
with a Company Order for the authentication and delivery of such Debentures,
and the Indenture Trustee, in accordance with the Company Order, shall
thereupon authenticate and make said Debentures available for delivery 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.
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
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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 make available for delivery 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 Indenture Trustee is hereby appointed "Securities Registrar"
for the purpose of the registering Debentures and transfers and exchanges 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.
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, 11.7 and 11.8.
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
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that it is unwilling or unable to continue as Depositary for the Global
Debenture or if at any time such Depositary ceases to be a clearing agency
registered under the Securities Exchange Act, and the Company shall not have
appointed a successor depositary within 90 days after such notice, (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.
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
protected purchaser, the Company shall execute and upon a Company Order, 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.
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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.
Accrued interest that is not paid on the applicable Interest Payment
Date ("DEFAULTED INTEREST") will bear additional interest on the amount thereof
(to the extent permitted by law) at the stated rate per annum, compounded
quarterly. 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 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 amount 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
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Persons entitled to such Defaulted Interest as in this Clause
provided. Upon receipt of such deposit, 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
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the 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 or exchanges, 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 Trustee, be delivered to the Indenture
Trustee, and any such Debentures and Debentures surrendered directly to the
Indenture Trustee for any such purpose shall be promptly canceled by the
Indenture Trustee. 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
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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 (relating solely to clauses (a) and (b) under Section 5.1
hereof) has occurred and is continuing, the Company shall have the right to
defer the payment of interest (including Additional Interest, Additional Sums
and Liquidated Damages, if any) under the Debentures, at any time, or from time
to time, for a period not exceeding 20 consecutive quarters with respect to
each deferral period, but not to exceed the Stated Maturity (each such deferral
period an "EXTENSION PERIOD"). During any such Extension Period, the Company
shall not, and shall not permit any Subsidiary to, (a) declare or pay any
dividends on, make distributions with respect to, or redeem, purchase, acquire
or make a liquidation payment with respect to, any shares of the Company's
Capital Stock, other than dividends with respect to the Company's Series A
Preferred 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) issued by the Company that rank pari passu with or
junior to the Debentures (other than with respect to both (a) and (b) (i) any
dividend, redemption, liquidation, interest, principal or guarantee payment by
the Company where the payment is made with securities (including Capital Stock)
that rank pari passu with or junior to the securities on which such dividend,
redemption, liquidation, interest, principal or guarantee payment is being
made, (ii) payments under the Guarantee, (iii) purchases of Common Stock
related to the issuance of 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, however, 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 amounts then accrued and unpaid, the Company may
select a new Extension Period, subject to the above requirements. No interest
including Additional Interest 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 Property Trustee and other trustees under
the Declaration 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 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 Property Trustee under the Declaration (or, if no Preferred
Securities are outstanding, the Indenture Trustee) is required to give notice
to the New York Stock Exchange or other applicable self-regulatory organization
or to holders of such Preferred
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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
Expiration Period selected.
The Indenture Trustee, upon receipt of notice thereof from the
Company, shall promptly give notice, in the name and at the expense of the
Company, 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
Debentures 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 provided to it by the Company 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. The Company will
promptly notify the Indenture Trustee of any change in CUSIP 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 Property 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 presentation shall execute a Global Debenture or
Global Debentures in such
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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 a
form other than book-entry certificated form, the Debentures
in certificated form may be presented to the Indenture Trustee
by the Property Trustee under the Declaration 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
Property 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 so
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 Property 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 make available for delivery the
Debentures in definitive registered form without coupons, in
authorized denominations, and in an
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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 Debentures 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 Officer's
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 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; provided, however, that
the Indenture Trustee shall not be required to determine (but may rely
on a determination made by the Company, and shall be entitled to
receive an Officer's Certificate evidencing such determination with
respect to) the sufficiency of any such evidence. Upon receipt of
such evidence and an Officer's Certificate, the Indenture Trustee
shall authenticate and make available for delivery 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 under the Securities Act 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 of the Indenture
Trustee hereunder), and the Indenture Trustee, on written demand of and at the
expense of the Company, shall execute instruments supplied by the Company
acknowledging satisfaction and discharge of this Indenture, when
(a) either
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(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 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 (in the case
of Debentures that have become due and payable) 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 Additional Interest, Additional Sums and
Liquidated Damages, if any) to the date of such
deposit (in the case of Debentures that have become
due and payable) or to the Stated Maturity, as the
case may be, 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
Officer's 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 date of Maturity, 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.
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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
the Indenture Trustee, in accordance with the provisions of the Debentures and
this Indenture, to the payment, either directly or through any Paying Agent
(including the 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,
that if any Debenture is converted after the deposit of money with the
Indenture Trustee pursuant to Section 4.1, the Indenture Trustee shall pay over
to the Company out of the money so deposited an amount equal to the money
deposited in respect of the Debenture so converted and not previously paid with
respect to the Debenture so converted; and provided, further, such moneys need
not be segregated from other funds maintained by the Indenture Trustee 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) failure for 30 days to pay any interest upon the Debentures,
including any Additional Interest and Liquidated Damages, if any, and any
Additional Sums, in respect thereof, when such amounts becomes due and payable
(subject to the deferral of any due date in the case of an Extension Period);
or
(b) failure to pay any 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 deliver shares of the Common Stock
upon an appropriate election by the Holder or Holders of the Debentures to
convert such Debentures into shares of Common Stock; or
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(d) failure to observe or perform in any material respect any
other of the covenants or agreements of the Company contained in the Debentures
or contained in this Indenture and continuance of such failure for a period of
60 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 25% in aggregate liquidation preference of the
Preferred Securities at the time outstanding; or
(e) 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; or
(f) 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,
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
(g) (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.
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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 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, however,
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 the right to make the
declaration 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 Additional Interest and Liquidated
Damages, if any) and Additional Sums, if any, on all the Debentures shall
become immediately due and payable, provided that the payment of principal
(including premium, if any) and interest (including Additional Interest and
Liquidated Damages, if any) and Additional Sums, if any, 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 Additional Interest and
Liquidated Damages, if any) and Additional Sums, if any, 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 Indenture 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 and Liquidated
Damages, if any) and Additional Sums, if any, 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 Additional
Interest, Additional Sums and Liquidated Damages, if
any) upon overdue installments of interest at the
rate borne by the Debentures;
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(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. 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 an Event of Default under
Section 5.1(a) or Section 5.1(b) shall occur, 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 Additional Interest,
Additional Sums and Liquidated Damages, if any), 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
Additional Interest, Additional Sums and Liquidated Damages, if any) 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, subject to the provisions of Article 12, 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 Indenture Trustee will have the right to declare the principal
of (premium, if any, on) and interest (including Additional Interest,
Additional Sums or Liquidated Damages, if any) 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.
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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 Additional Interest, Additional Sums and Liquidated
Damages, if any)) shall be entitled and empowered, by intervention in
such proceeding or otherwise,
(i) to file proof of a claim for the whole amount
of principal (and premium, if any) and interest (including
Additional Interest, Additional Sums and Liquidated Damages,
if any) 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 a 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
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owing the Indenture Trustee and any predecessor Indenture Trustee under Section
6.7, its agents and 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 Additional Interest, Additional Sums and Liquidated
Damages, if any), 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
Additional Interest, Additional Sums and Liquidated Damages, if any), 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 Additional Interest, Additional Sums and Liquidated
Damages, if any), 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
Property 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, 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 security and/or indemnity reasonably satisfactory to the
Indenture Trustee 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
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(e) no direction inconsistent with such written request
has been given to the Indenture 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
Property Trustee. In connection with any such Direct Action, 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
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remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT WAIVER. No delay or omission
of the 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 Responsible 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 Event of Default or 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 Additional Interest, Additional Sums
and Liquidated Damages, if any) 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 the Property
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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 Event of Default or Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Event of Default or 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
Additional Interest, Additional Sums and Liquidated Damages, if any) 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.
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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 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 on their face 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
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any of its duties hereunder, or in the exercise of any of its rights
or powers, the Indenture Trustee reasonably believes 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 a
Responsible Officer of the Indenture Trustee obtains actual knowledge of the
occurrence of any Event of Default or 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 Event of Default or
Default hereunder known to the Indenture Trustee, unless such Default shall
have been cured or waived; provided, however, that, except in the case of an
Event of Default or Default in the payment of the principal of (or premium, if
any) or interest (including Additional Interest, Additional Sums and Liquidated
Damages, if any) on any Debenture, the Indenture Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Indenture Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of Debentures; provided, further, that,
except in the case of any Event of Default or 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 Officer's 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;
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(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 security and/or indemnity reasonably satisfactory to the
Indenture Trustee 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 may 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
(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.
(i) the Indenture Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith,
without negligence and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture.
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 neither the Indenture Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The
Indenture Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Debentures. Neither the Indenture Trustee nor any
Authenticating Agent shall 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.
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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
for interest on any money received by it hereunder except as otherwise agreed
in writing 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 in
writing 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) incurred in connection with
the Indenture Trustee's discharge of its duties hereunder; and
(c) to the fullest extent permitted by law to indemnify
the Indenture Trustee (including in its individual capacity) for, and
to hold it harmless against, any loss, liability, damages, claims or
expense (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) to the extent incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this Indenture or
the performance of its duties hereunder, including the reasonable
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.
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.
The provisions of this Section 6.7 shall survive the discharge or
termination of this Indenture and shall survive the resignation or removal of
the Indenture Trustee.
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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, banking corporation, national banking
association or other Person 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, banking corporation, national banking association or other Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then, for 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.
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,
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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
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.
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(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 all
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, banking corporation, national banking association
or other Person into which the Indenture Trustee may be merged or converted or
with which it may be consolidated, or any corporation, banking corporation,
national banking association or other Person resulting from any merger,
conversion or consolidation to which the Indenture Trustee shall be a party, or
any corporation, banking corporation, national banking association or other
Person 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, however, that such corporation, banking corporation,
national banking association or other Person shall be otherwise qualified and
eligible under this Article and the Trust Indenture Act, 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,
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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 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, banking corporation, national banking association or other
Person 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, banking corporation, national banking association or
other Person into which an Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation, banking corporation,
national banking association or other Person resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a
party, or any corporation, banking corporation, national banking association or
other Person succeeding to all or substantially all of the corporate trust
business of an Authenticating Agent shall be the successor Authenticating Agent
hereunder; provided, however, that such corporation, banking corporation,
national banking association or other Person 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.
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An Authenticating Agent may 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
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.
------------------------------
WILMINGTON TRUST COMPANY 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 the
following:
(a) quarterly at least five 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 Date; and
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(b) at such other times as the Indenture Trustee may
request in writing, within 30 days after the receipt by the Company of
any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Indenture
Trustee in its capacity as Securities Registrar.
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
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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 Exchange Act
shall be filed with the Indenture Trustee within 15 days after the same 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 Exchange Act, 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.
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 Additional Interest, Additional Sums and
Liquidated Damages, if any) 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
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, continuance,
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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
Officer's 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 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 make available for delivery any Debentures which
previously shall have been signed and delivered by the officers of the Company
to the Indenture Trustee for authentication pursuant to such Company Order and
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 and reasonably agreed
to by the successor Person and the Indenture Trustee.
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:
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(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
(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
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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 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, however, 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 Additional Interest, Additional Sums and
Liquidated Damages, if any) 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
Property Trustee without the prior consent of each holder of Preferred
Securities.
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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 Officer's
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
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 Company,
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
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and made available for delivery 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.
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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
may 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 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 10:00 a.m. New York City time on 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
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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.
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 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
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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 Officer's
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.
SECTION 10.7. ADDITIONAL SUMS. In the event that (a) the Trust 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 11.6 or 11.7 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 net amount of Distributions received by holders of
the outstanding Preferred Securities and Common Securities of the Trust shall
not be reduced as a result of any additional taxes, duties and other
governmental charges to which the Trust has become subject as a result of a Tax
Event (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
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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.
SECTION 10.8. ADDITIONAL COVENANTS. The Company covenants and
agrees with each Holder of Debentures that so long as the Debentures are
outstanding, if (a) there shall have occurred any event of which the Company
has actual knowledge that (i) is a Default and (ii) in respect of which the
Company shall not have taken reasonable steps to cure, (b) the Company shall be
in default with respect to its payment of any obligations under the Guarantee
or (c) 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 Common Stock
related to the issuance of 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).
The Company also covenants with each Holder of the Debentures (a) 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, (b) 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, (c) not to voluntarily
terminate, wind-up or liquidate the Trust, except (i) in connection with a
distribution of the Debentures to the holders of Preferred Securities in
liquidation of the Trust or (ii) in connection with mergers, consolidations or
amalgamations permitted by Section 9.5 of the Declaration and (d) 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.
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SECTION 10.9. REGISTRATION RIGHTS. The holders of the Preferred
Securities, the Holders, the holders of the Guarantee and the shares of Common
Stock of the Company issuable upon conversion of the Debentures and the
Preferred Securities are entitled to the benefits of a Registration Rights
Agreement, dated as of March 24, 1998, among the Company, the Trust 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 Trust 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 Trust Securities, 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 (including reasonable legal fees and
expenses) of the Property 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 (including reasonable legal
fees and expenses) of the Guarantee Trustee; 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.
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 30 days nor more than 60 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. In the
case of any redemption of Debentures prior to the expiration of any restriction
on such redemption provided
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in the terms of such Debentures, the Company shall furnish the Indenture
Trustee with an Officer's Certificate and an Opinion of Counsel evidencing
compliance with such restriction.
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 less than 30 days, and
not more than 60 days, 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 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
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(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
Additional Interest, Additional Sums and Liquidated Damages, if any) thereon,
and from and after such date (unless the Company shall default in the payment
of the Redemption Price or any accrued interest (including Additional Interest,
Additional Sums and Liquidated Damages, if any) thereon) 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 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.
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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 until
such redemption is consummated.
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 or (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 April 2, 2001 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 April 1 (April 2 in the case of
2001) 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 Additional Interest, Additional Sums and Liquidated Damages, if any)
on the portion being redeemed:
<TABLE>
<CAPTION>
Redemption Price Redemption Price
(% of principal amount (% of principal amount
Year at State Maturity) Year at State Maturity)
- ---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C>
2001 103.438% 2004 101.375%
2002 102.750% 2005 100.688%
2003 102.063% 2006 and thereafter 100.000%
</TABLE>
The Company may not redeem the Debentures unless, on or before the
date the Company gives notice of redemption to holders of the Debentures, all
accrued and unpaid interest (including
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Additional Interest, Additional Sums and Liquidated Damages, if any) for all
quarterly interest periods ending on or prior to the most recent Interest
Payment Date has been paid in full on all outstanding Debentures.
If at any time 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 Additional Interest and Liquidated Damages, if any)
and Additional Sums, if any, to the date of redemption.
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) April 2, 2001, at a
Redemption Price equal to the principal amount at Stated Maturity of such
Debentures plus any accrued and unpaid interest, (including Additional
Interest, Additional Sums and Liquidated Damages, if any) 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 or dissolve the Trust and cause the Debentures to be
distributed to the holders of the Preferred Securities and the Common
Securities in liquidation of the Trust after satisfaction of the
Trust's liabilities to its creditors as provided by applicable law.
(b) If a Special Event in respect of the Trust shall
occur, the Company shall give the Property Trustee notice of the same.
If a Special Event in respect of the Trust shall occur and be
continuing, the Declaration requires the Property Trustee thereunder
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 Sums) on the Trust Securities; provided, however, that, in
the case of a Tax Event, the Company shall have the right to direct
the Property Trustee that less than all, or none, of the Trust
Securities be so exchanged (i) if and 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 interest and other payments 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 and for so long as the Company shall
instead elect to redeem the Debentures, in whole or in part, in the
manner set forth in Section 11.7; provided, however, that the Company
shall comply with Section 11.8(b)(i) to the extent the Debentures are
not exchanged or redeemed.
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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 Additional Interest, Additional Sums
and Liquidated Damages, if any) 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 deposit 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 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 and to that end the holders of Senior Debt shall be entitled to
receive, for application to the payment thereof any payment or distribution of
any kind 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
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
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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.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.4. PAYMENT LIMITS BY SENIOR DEBT. In the event and
during the continuation of any default by the Company in the payment of
principal, premium, interest or any other payment due under the Senior Credit
Facility or on any other Senior Debt having a principal amount then outstanding
of $25 million or more (or as to which there is an obligation to lend $25
million or more) continuing beyond the period of grace, if any, specified in
the instrument evidencing such Senior Debt, unless and until such default shall
have been cured or waived or shall have ceased to exist, then no payment shall
be made by the Company with respect to the principal of (including redemption
payments if any), premium, if any, or interest (including Additional Interest,
Additional Sums and Liquidated Damages, if any) on the Debentures. In the
event of any default (other than a default described in Section 12.3 or the
preceding sentence) by the Company under the terms of any instrument evidencing
any Senior Debt, continuing beyond the period of grace, if any, specified in
such instrument, notice of which default shall have been given by any holder of
such Senior Debt to the Indenture Trustee, unless and until the earlier of (i)
such default shall have been cured or waived or shall have ceased to exist, or
(ii) the continuation of such default for a period of one hundred eighty days
after notice of the occurrence of such default shall have been given to the
Indenture Trustee, no payment shall be made by the Company with respect to the
principal of (or premium, if any) or interest (including Additional Interest,
Additional Sums or Liquidated Damages, if any) 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 or Holders of the
Debentures which is prohibited by the
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foregoing provisions of Section 12.3 or this Section 12.4, and if such fact
shall have been made known, at or prior to the time of such payment, by written
notice to the Indenture Trustee or such Holder or Holders in accordance with
Section 12.10, then and in such event the Indenture Trustee or such Holder or
Holders shall pay over and deliver such amounts to the holders of Senior Debt
or the duly authorized representative of such holders of Senior Debt.
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 of 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
Additional Interest, Additional Sums and Liquidated Damages, if any) on the
Debentures or the retention of such payment by the Holders, if, at the time of
such application by the Indenture Trustee, no Responsible Officer of the
Indenture Trustee had 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 Additional Interest, Additional Sums and Liquidated
Damages, if any) 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 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
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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
Additional Interest, Additional Sums and Liquidated Damages, if any) 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 authorizes 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 itself to be a holder
of Senior Debt or a trustee 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 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
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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 thereof, 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 WTC and/or the Indenture Trustee. WTC and/or the
Indenture Trustee shall not be deemed to owe any fiduciary duty to the holders
of such Senior Debt and neither the Indenture Trustee nor WTC shall be liable
to the holder of any Senior Debt if the Indenture Trustee shall in good faith
mistakenly 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 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 Additional
Interest, Additional Sums and Liquidated Damages, if any) on the Debentures or
on
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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 after 90 days following the date of this
Indenture and prior to the Conversion Expiration Date, into fully paid and
nonassessable shares of Common Stock of the Company at an initial conversion
price of $78.25 per share of Common Stock (equal to a conversion rate of 0.6390
shares for each $50 in aggregate principal amount of Debentures), subject to
adjustment as described in this Article 13 (as adjusted, the "Conversion
Price"). The Company will make no payment or allowance for dividends on the
shares of Common Stock issued upon such conversion. 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 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, the 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 Indenture 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 Common Stock should be issued upon conversion
(subject to the limitations or disposition of any interest in such
securities set forth in the Restrictive Securities Legend) and, 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 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
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behalf of such holder, into 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 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, however, 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 Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as of the Conversion Date 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 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 to the Holder or Holders of
the Debentures (through the Conversion Agent) upon conversion of the
fixed number of shares of 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, if any) accrued on such
Debentures at the time of such conversion; 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 Trust
(which will distribute the applicable portion of such interest to the
holder of Preferred Securities) or other holder of Debentures, as the
case may be, despite such conversion; provided, further, that if a
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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.
(c) No fractional shares of Common Stock will be issued
as a result of conversion, but in lieu thereof, the Company shall pay
to the Conversion Agent, a cash adjustment in an amount equal to the
same fraction of the 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 Article 13, the Conversion 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 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
Common Stock and thereupon to deliver such shares of 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 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 in the event such Common Stock is issued in global form.
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 Common Stock; provided, however, that the
Indenture Trustee or the Conversion Agent shall provide to the Company
or to the Company's transfer agent for such Common Stock, prior to or
concurrently with a request to the Company to deliver such Conversion
Agent certificates for such 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 Common Stock, solely for issuance upon the conversion of the
Debentures, such number of shares of Common Stock as shall from time
to time be issuable upon the conversion of all the Debentures then
outstanding.
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Notwithstanding the foregoing, the Company shall be entitled to
deliver upon conversion of Debentures shares of Common Stock
reacquired and held in the treasury of the Company (in lieu of the
issuance of authorized and unissued shares of Common Stock) so long as
any such treasury shares are free and clear of all liens, charges,
security interests or encumbrances. Any shares of 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 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
Common Stock (and all requirements to list the Common Stock issuable
upon conversion of Debentures that are on the time applicable), in
order to enable the Company to lawfully issue Common Stock to each
Holder upon conversion of the Debentures.
(h) Except as stated below, the Company will pay any and
all taxes that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Debentures. The Company shall
not be required to pay any tax which may be payable in respect of (i)
any income or gain realized or recognized as a result of such
conversion and (ii) any transfer involved in the issue and delivery of
shares of 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 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
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securities other than shares of Common Stock not constituting a
Fundamental Change, then the Conversion Price per share of Capital
Stock of the Company and the kind of shares of Capital Stock of the
Company receivable upon a conversion of Debentures outstanding
immediately prior to such action by the Company shall be adjusted so
that the Holder of any Debentures thereafter surrendered for
conversion shall be entitled to receive the number and kind of shares
of Capital Stock of the Company which he would have received in
respect of the shares of Common Stock the Holder would have received
had the Holder converted such Debenture had been converted immediately
prior to the record date for receipt of such dividend or distribution
or the effective date of such other action. 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 Common Stock entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or purchase
shares of Common Stock at a price per share less than the Current
Market Price per share of Common Stock on the record date mentioned
below, the Conversion Price for 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 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 Common Stock outstanding at the close of business on the
record date mentioned below plus the number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment
shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or
warrants. For the purposes of this subsection, the number of shares
in Common Stock at any time outstanding shall not include shares held
in the treasury of the Company. The Company shall not issue any
rights or warrants in respect of shares of Common Stock held in the
treasury of the Company. In case any rights or warrants referred to
in this subsection in respect of which an adjustment shall have been
made shall expire unexercised within 45 days after the same shall have
been
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distributed or issued by the Company, the Conversion Price shall be
readjusted at the time of such expiration to the Conversion Price that
would have been in effect if no adjustment had been made on account of
the distribution or issuance of such expired rights or warrants.
(c) Subject to the last sentence of this sub-paragraph,
in case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of
any class or series of Capital Stock, cash or assets (including
securities, but excluding any rights or warrants referred to in
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 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 Common Stock and the denominator shall be such Current Market Price
per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the
Reference Date. In the event that such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to
be the Conversion Price which would then be in effect if the
adjustment for such proposed 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 received by
the holders of the Common Stock in such dividend or distribution, but
such shares of Common Stock or such rights or warrants, which shall
result in 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, which shall result in any
further 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 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 Common Stock on the Trading Day immediately preceding the
date of declaration of such dividend), the Conversion Price shall be
reduced so that the Conversion Price 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 Common Stock on the date fixed
for the
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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 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 Common
Stock on the record date fixed for determining stockholders entitled
to such dividend or distribution (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
Debentures shall have the right to receive upon conversion the amount
of cash such Holder would have received had such Holder converted each
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 Common Stock on the Trading Day next succeeding the
Expiration Time, the Conversion Price shall be reduced so that the
Conversion Price 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
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 Common
Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value (determined
as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the
"PURCHASED SHARES") (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 Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the Current Market
Price per share of the Common Stock on the trading day next succeeding
the
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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, however, that the Company
shall give at least 15 days' prior notice of such reduction to the
Indenture Trustee, the Property 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 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 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 Common Stock of the Company
under any such plan, or the issuance of any shares of Common Stock or
options or rights to purchase such shares pursuant to any present or
future employee benefit plan or program of the Company or pursuant to
any option, warrant, right, or exercisable, exchangeable or
convertible security which does not constitute an issuance to all
holders of Common Stock or a class thereof, of rights or warrants
entitling holders of such rights or warrants to subscribe for or
purchase 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 Common Stock (or securities convertible into or
exchangeable for 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) If any transaction shall occur (including, without
limitation, (i) any recapitalization or reclassification of shares of
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 Common Stock), (ii) any consolidation or
merger of the Company with or into another person or any merger of
another person into the Company (other than a merger that does not
result in a reclassification, conversion, exchange or cancellation of
Common Stock), (iii) any sale or transfer of all or substantially
all of the assets of the Company, or (iv) any compulsory share
exchange), in each case pursuant to which either shares of Common
Stock shall be converted into the right to receive other securities,
cash or other property, or, in the case of a sale or transfer of all
or substantially
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all of the assets of the Company, the holders of Common Stock shall be
entitled to receive other securities, cash or other property, then
appropriate provision shall be made so that the holder of each
Debenture then outstanding shall have the right thereafter to convert
such Debenture only into:
(x) in the case of any such transaction that does
not constitute a Stock Fundamental Change (as defined) and
subject to funds being legally available for such purpose
under applicable law at the time of such conversion, the kind
and amount of the securities, cash or other property that
would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or
share exchange by a holder of the number of shares of Common
Stock issuable upon conversion of such Debenture immediately
prior to such recapitalization, reclassification,
consolidation, merger, sale, transfer or share exchange, after
giving effect, in the case of any Non-Stock Fundamental Change
(as defined), to any adjustment in the conversion price in
accordance with clause (i) of the following paragraph, and
(y) in the case of any such transaction that
constitutes a Stock Fundamental Change, common stock of the
kind received by holders of Common Stock as a result of such
Stock Fundamental Change in an amount determined in accordance
with clause (ii) of the following paragraph.
The company formed by such consolidation or resulting from
such merger or that acquires such assets or the Company's shares, as
the case may be, shall in its certificate or articles of incorporation
or other constituent document establish such a conversion right. Such
certificate or articles of incorporation or other constituent document
shall provide for adjustments that, for events subsequent to the
effective date of such certificate or articles of incorporation or
other constituent document, shall be as nearly equivalent as may be
practicable to the relevant adjustments provided for in Section 13.4
and this Section 13.5.
(b) The Holders of Debentures will have no voting rights
with respect to any transaction described in this section.
(c) Notwithstanding any other provision in the preceding
Section 13.5(a) to the contrary, if any Fundamental Change occurs,
then the conversion price in effect immediately prior to such
Fundamental Change will be adjusted as follows:
(i) in the case of a Non-Stock Fundamental
Change, the conversion price of the Debentures will be
adjusted to equal 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 effected
pursuant to the preceding paragraphs) and (B) the product of
(1) the greater of the Applicable Price (as defined) and the
then applicable Reference Market Price (as defined) and (2) a
fraction, the numerator of which will be $50 and the
denominator of which will be
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(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 twelve-month periods
commencing on the date of original issue of the Debentures
through March 30, 1999 and the twelve-month periods commencing
April 1, 1999 and 2000 (through April 1, 2001) the product of
105.500%, 104.813% and 104.125%, respectively, times $50) plus
(y) any then-accrued and unpaid interest (including Additional
Interest and Liquidated Damages, if any) on one Debenture; and
(ii) 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 in
effect immediately prior to such Stock Fundamental Change
(after giving effect to any other prior adjustments effected
pursuant to the preceding paragraphs) multiplied by a
fraction, the numerator of which will be the Purchaser Stock
Price (as defined) and the denominator of which 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 Common Stock is common
stock of the successor, acquiror, or other third party (and
cash, if any, paid with respect to any fractional interests in
such common stock resulting from such Stock Fundamental
Change) and (B) all Common Stock will have been exchanged for,
converted into, or acquired for common stock of the successor,
acquiror, or other third party (and cash with respect to
fractional interests), the conversion price of the Debentures
shall be the conversion price in effect immediately prior to
such Stock Fundamental Change multiplied by a fraction, the
numerator of which will be one (1) and the denominator of
which 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 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.
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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
(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); or
(ii) the Company shall authorize the granting to all
holders of Common Stock of rights or warrants to subscribe for or
purchase any shares of Capital Stock of the Company of any class or
series or of any other rights or warrants to acquire Capital Stock of
the Company; or
(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 Common Stock is converted into other
securities, cash or other property; or
(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
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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, no adjustment of
the Conversion Price will be made upon the issuance of any shares of Common
Stock 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 Common Stock under any such plan,
or 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, which does not constitute an issuance to all holders of Common Stock
(or a class thereof) of rights or warrants entitling holders thereof to
subscribe for or purchase 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 Common Stock (or securities convertible into or exchangeable
for Common Stock), including, without limitation, in connection with any
acquisition not constituting a Fundamental Change, except as specifically
described in this Article 13.
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 Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash or assets to which such Holder is so entitled, provided, that such due
bill (i) meets any applicable requirements of the principal national securities
exchange or other market on which the Common Stock is then traded and (ii)
requires payment or delivery of such shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets no later
than the
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date of payment or delivery thereof to holders of shares of Common Stock
receiving such distribution.
SECTION 13.10. RESTRICTIONS ON COMMON STOCK ISSUABLE UPON
CONVERSION.
(a) Shares of 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 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 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 Company, 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
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 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 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 Common Stock or stock certificates or other securities or property
upon the surrender of any Debenture for the purpose of conversion, or, to
comply with any of the covenants of the Company contained in Article 10 or this
Article 13.
91
<PAGE> 99
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
SUIZA FOODS CORPORATION
By: /s/ Gregg L. Engles
-----------------------------------
Name: Gregg L. Engles
Title: Chairman and Chief Executive Officer
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ Patricia A. Evans
-----------------------------------
Name: Patricia A. Evans
Title: Financial Services Officer
92
<PAGE> 100
PREFERRED SECURITIES CERTIFICATE
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, NEW YORK), TO SUIZA CAPITAL
TRUST II 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 OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) 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, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED 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 IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT
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
SUIZA FOODS CORPORATION OR A SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, OR
(C) 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
<PAGE> 101
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 CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER
MUST FURNISH TO THE TRANSFER AGENT), TOGETHER WITH SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS SUIZA FOODS CORPORATION, THE TRUSTEE OR THE
TRANSFER AGENT, AS APPLICABLE, 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.
<PAGE> 102
Certificate Number Number of Preferred Securities
1 4,000,000
CUSIP 86507G200
Certificate Evidencing Preferred Securities
of
Suiza Capital Trust II
5 1/2 % Convertible Preferred Securities
(Liquidation Amount $50 per Preferred Security)
Suiza Capital Trust II, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of 4,000,000 preferred securities of the
Trust representing an undivided beneficial interest in the assets of the Trust
and designated the Suiza Capital Trust II 5 1/2% Trust 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 below). 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 March 24, 1998, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms
of Preferred Securities as set forth therein. The Holder is entitled to the
benefits of the Guarantee Agreement entered into by Suiza Foods Corporation, a
Delaware corporation, and Wilmington Trust Company, as Guarantee Trustee, dated
as of March 24, 1998 (the "Guarantee"), to the extent provided therein. The
Trust will furnish a copy of the Declaration and the Guarantee to the Holder
without charge upon written request to the Trust at its principal place of
business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Preferred Securities as evidence of beneficial ownership in the Debentures.
This Preferred Security is governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to principles of
conflict of laws.
<PAGE> 103
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this ____ day of March, 1998.
SUIZA CAPITAL TRUST II
By:
-----------------------------------
Name:
not in his individual capacity but
solely as an Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: March __, 1998
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Property Trustee
By:
-----------------------------------
Authorized Signatory
<PAGE> 104
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
-----------------------------------
Signature:
------------------------------
(Sign exactly as our name appears on the other side of this Preferred Security
Certificate)
<PAGE> 105
SCHEDULE A
The initial number of Preferred Securities represented by this Rule
144A Global Certificate shall be 4,000,000. The following increases or
decreases in the number of Preferred Securities represented by this Global
Certificate have been made:
<TABLE>
<CAPTION>
============================================================================================================
Date Made Amount of increase in Amount of increase in Number of Preferred Signature of
number of Preferred number of Preferred Securities authorized officer of
Securities represented Securities represented by this Property Trustee or
by this Global represented by this Global Certificate Securities Custodian
Certificate Global Certificate following such
decrease or increase
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 106
SUIZA FOODS CORPORATION
5 1/2% Convertible Subordinated Debenture due April 1, 2028, $618,556,750
No. 1
Suiza Foods Corporation, a corporation organized and existing under
the laws of Delaware (hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Suiza Capital Trust II, or registered
assigns, the principal sum of six hundred eighteen million five hundred
fifty-six thousand seven hundred fifty dollars and 00/100's ($618,556,750) on
April 1, 2028 and to pay interest, plus Additional Interest, Additional Sums
and Liquidated Damages, if any, on said principal sum from March 24, 1998 or
from the most recent Interest Payment Date on which interest has been paid in
full or duly provided for, quarterly until the principal hereof is paid in full
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 July 1, 1998 at
the rate of five and one-half percent (5 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 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.
SUIZA FOODS CORPORATION
By:
-----------------------------------
Name:
-----------------------------
Title:
-----------------------------
This is one of the Debentures
referred to in the within-mentioned
Indenture:
WILMINGTON TRUST COMPANY,
as Indenture Trustee
By:
-----------------------------
Authorized Signatory
Dated:
---------------------------
1
<PAGE> 107
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 $618,556,750, issued and to be issued under an Indenture, dated as of
March 24, 1998 (herein called the "INDENTURE"), between the Company and
Wilmington Trust Company, 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 preceding
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 Property 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 (relating solely to
clauses (a) and (b) under the definition thereof in Section 5.1 of the
Indenture) has occurred and is continuing, the Company shall have the right
under the Indenture to defer the payment of interest (including any Additional
Sums or Liquidated Damages, if any, under this Debenture, at any time or from
time to time), for a period not exceeding 20 consecutive quarters with respect
to each deferral period (each such deferral period an "EXTENSION PERIOD").
During any such Extension Period, the Company shall not, and shall not permit
any Subsidiary to, (a) declare or pay any dividends on, make distributions with
respect to, or redeem, purchase, acquire, or make a liquidation payment
2
<PAGE> 108
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) issued by the
Company that rank pari passu with or junior to this Debenture (other than with
respect to both (a) and (b) (i) any dividend, redemption, liquidation,
interest, principal or guarantee payment by the Company where the payment is
made with securities (including Capital Stock) that rank pari passu with or
junior to the securities on which such dividend, redemption, liquidation,
interest, principal or guarantee payment is being made, (ii) payments under the
Guarantee, (iii) purchases of Common Stock related to the issuance of 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, however, 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 amounts
then accrued and unpaid, the Company may elect to begin a new Extension Period,
subject to the above requirements. No interest, including Additional Interest
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 Property Trustee under the Declaration 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 Property Trustee under the Declaration
is (or if no Preferred Securities are outstanding, the Indenture Trustee is)
required to give notice to the New York Stock Exchange 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 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, including the principal
thereof, premium, if any, and interest thereon is, to the extent and in the
manner set forth in the Indenture, expressly
3
<PAGE> 109
subordinated and subject in right of payment 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, and each Holder of this Debenture,
by accepting the same, agrees to and shall be bound by such provisions and
authorizes and directs the Property Trustee on behalf of such Holder to take
such action as may be necessary or appropriate to acknowledge or effectuate, as
between the Holder and the holders of Senior Debt, the subordination as
provided in the Indenture and appoints the Property Trustee attorney-in-fact of
such Holder for any and all such purposes.
At any time on or after April 2, 2001, 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 Common Stock (and/or such other cash, securities or property as
then provided for by the Indenture).
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, however,
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. Upon any such declaration, such principal
amount (or specified amount) of and the accrued interest (including any
Additional Interest, Additional Sums and Liquidated Damages, if any) 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 Liquidated Damages, if any) on such Debentures shall remain subordinated to
the extent provided in Article 12 of the Indenture.
4
<PAGE> 110
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 and 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 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 March 24, 1998, 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
5
<PAGE> 111
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 the date 90 days after 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 by the Commission (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 set
forth therein, 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
6
<PAGE> 112
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.
No director, officer, employee, stockholder or incorporator of the
Company shall 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.
7
<PAGE> 113
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
(I) or (we) assign and transfer this Debenture to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably 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.
- --------------------
* 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> 114
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 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 the 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, 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> 115
NOTICE OF CONVERSION
To: Suiza Foods Corporation
The undersigned owner of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or the portion below designated, into
Common Stock of Suiza Foods Corporation 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 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> 1
EXHIBIT 4.4
PREFERRED SECURITIES CERTIFICATE
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, NEW YORK), TO SUIZA CAPITAL
TRUST II 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
OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) 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, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED 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 IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT
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
SUIZA FOODS CORPORATION OR A SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, OR (C) 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
<PAGE> 2
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 CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER
MUST FURNISH TO THE TRANSFER AGENT), TOGETHER WITH SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS SUIZA FOODS CORPORATION, THE TRUSTEE OR THE
TRANSFER AGENT, AS APPLICABLE, 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.
<PAGE> 3
Certificate Number Number of Preferred Securities
1 4,000,000
CUSIP 86507G200
Certificate Evidencing Preferred Securities
of
Suiza Capital Trust II
5 1/2 % Convertible Preferred Securities
(Liquidation Amount $50 per Preferred Security)
Suiza Capital Trust II, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of 4,000,000 preferred securities of the
Trust representing an undivided beneficial interest in the assets of the Trust
and designated the Suiza Capital Trust II 5 1/2% Trust 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 below). 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
March 24, 1998, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of Preferred Securities
as set forth therein. The Holder is entitled to the benefits of the Guarantee
Agreement entered into by Suiza Foods Corporation, a Delaware corporation, and
Wilmington Trust Company, as Guarantee Trustee, dated as of March 24, 1998 (the
"Guarantee"), to the extent provided therein. The Trust will furnish a copy of
the Declaration and the Guarantee to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Preferred Securities as evidence of beneficial ownership in the Debentures.
This Preferred Security is governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to principles of
conflict of laws.
<PAGE> 4
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ____ day of March, 1998.
SUIZA CAPITAL TRUST II
By:
--------------------------------------
Name:
not in his individual capacity but
solely as an Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned
Declaration.
Dated: March , 1998
--
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Property Trustee
By:
---------------------------------------
Authorized Signatory
<PAGE> 5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
----------------------------------
Signature:
-----------------------------
(Sign exactly as our name appears on the other side of this
Preferred Security Certificate)
<PAGE> 6
SCHEDULE A
The initial number of Preferred Securities represented by this Rule
144A Global Certificate shall be 4,000,000. The following increases or decreases
in the number of Preferred Securities represented by this Global Certificate
have been made:
================================================================================
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date Made Amount of increase in Amount of increase in Number of Preferred Signature of
number of Preferred number of Preferred Securities represented authorized officer of
Securities represented Securities represented by this Global Property Trustee or
by this Global by this Global Certificate following Securities Custodian
Certificate Certificate such decrease or
increase
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 4.5
SUIZA FOODS CORPORATION
5 1/2% Convertible Subordinated Debenture due April 1, 2028, $618,556,750
No. 1
Suiza Foods Corporation, a corporation organized and existing under the
laws of Delaware (hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Suiza Capital Trust II, or registered
assigns, the principal sum of six hundred eighteen million five hundred
fifty-six thousand seven hundred fifty dollars and 00/100's ($618,556,750) on
April 1, 2028 and to pay interest, plus Additional Interest, Additional Sums and
Liquidated Damages, if any, on said principal sum from March 24, 1998 or from
the most recent Interest Payment Date on which interest has been paid in full or
duly provided for, quarterly until the principal hereof is paid in full 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 July 1, 1998 at the rate
of five and one-half percent (5 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 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.
SUIZA FOODS CORPORATION
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
This is one of the Debentures
referred to in the within-mentioned
Indenture:
WILMINGTON TRUST COMPANY,
as Indenture Trustee
By:
---------------------------
Authorized Signatory
Dated:
- -----------------------
1
<PAGE> 2
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 $618,556,750, issued and to be issued under an Indenture, dated as of
March 24, 1998 (herein called the "INDENTURE"), between the Company and
Wilmington Trust Company, 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 preceding 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 Property 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 (relating solely to
clauses (a) and (b) under the definition thereof in Section 5.1 of the
Indenture) has occurred and is continuing, the Company shall have the right
under the Indenture to defer the payment of interest (including any Additional
Sums or Liquidated Damages, if any, under this Debenture, at any time or from
time to time), for a period not exceeding 20 consecutive quarters with respect
to each deferral period (each such deferral period an "EXTENSION PERIOD").
During any such Extension Period, the Company shall not, and shall not permit
any Subsidiary to, (a) declare or pay any dividends on, make distributions with
respect to, or redeem, purchase, acquire, or make a liquidation payment
2
<PAGE> 3
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) issued by the
Company that rank pari passu with or junior to this Debenture (other than with
respect to both (a) and (b) (i) any dividend, redemption, liquidation, interest,
principal or guarantee payment by the Company where the payment is made with
securities (including Capital Stock) that rank pari passu with or junior to the
securities on which such dividend, redemption, liquidation, interest, principal
or guarantee payment is being made, (ii) payments under the Guarantee, (iii)
purchases of Common Stock related to the issuance of 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, however,
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 amounts then accrued and unpaid,
the Company may elect to begin a new Extension Period, subject to the above
requirements. No interest, including Additional Interest 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 Property Trustee
under the Declaration 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
Property Trustee under the Declaration is (or if no Preferred Securities are
outstanding, the Indenture Trustee is) required to give notice to the New York
Stock Exchange 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 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, including the principal
thereof, premium, if any, and interest thereon is, to the extent and in the
manner set forth in the Indenture, expressly
3
<PAGE> 4
subordinated and subject in right of payment 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, and each Holder of this Debenture, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes and directs the Property Trustee on behalf of such Holder to take
such action as may be necessary or appropriate to acknowledge or effectuate, as
between the Holder and the holders of Senior Debt, the subordination as provided
in the Indenture and appoints the Property Trustee attorney-in-fact of such
Holder for any and all such purposes.
At any time on or after April 2, 2001, 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 Common Stock (and/or such other cash, securities or property as
then provided for by the Indenture).
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, however, 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. Upon any such declaration, such principal amount (or specified amount)
of and the accrued interest (including any Additional Interest, Additional Sums
and Liquidated Damages, if any) 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 Liquidated Damages, if any) on such
Debentures shall remain subordinated to the extent provided in Article 12 of the
Indenture.
4
<PAGE> 5
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 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
March 24, 1998, 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
5
<PAGE> 6
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 the date 90 days after 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 by the Commission (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 set
forth therein, 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
6
<PAGE> 7
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.
No director, officer, employee, stockholder or incorporator of the
Company shall 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.
7
<PAGE> 8
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
(I) or (we) assign and transfer this Debenture to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably 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.
- -------------------------------
* 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> 9
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 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 the 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, 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> 10
NOTICE OF CONVERSION
To: Suiza Foods Corporation
The undersigned owner of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or the portion below designated, into
Common Stock of Suiza Foods Corporation 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 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> 1
EXHIBIT 4.6
GUARANTEE AGREEMENT
SUIZA FOODS CORPORATION
and
WILMINGTON TRUST COMPANY
Dated as of March 24, 1998
With Respect to
5 1/2% TRUST CONVERTIBLE PREFERRED SECURITIES
(Liquidation Amount $50 per Preferred Security)
<PAGE> 2
CROSS REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF TRUST SECTION OF
INDENTURE ACT OF GUARANTEE
1939, AS AMENDED AGREEMENT
<S> <C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c), 2.8
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.5, 3.2
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
315(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1(d)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.6, 5.4
316(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3
317(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
317(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
</TABLE>
- --------------------------------------------------------------------------------
*This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
i
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2 List of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Reports by the Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . 5
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3 POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . 6
SECTION 3.1 Powers and Duties of the Guarantee Trustee . . . . . . . . . . . . . . . . . . 6
SECTION 3.2 Certain Rights of Guarantee Trustee . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee Agreement . . . . . . . 9
ARTICLE 4 GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.1 Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.2 Appointment, Removal and Resignation of the Guarantee Trustee . . . . . . . . 10
ARTICLE 5 GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 6 COVENANTS AND SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.1 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.2 Certain Covenants of the Guarantor . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 7 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 8 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 8.5 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
SECTION 8.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 9 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.2 Compensation and Indemnification . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
ii
<PAGE> 5
GUARANTEE
This GUARANTEE AGREEMENT, dated as of March 24, 1998, is executed and
delivered by Suiza Foods Corporation, a Delaware corporation (the "Guarantor"),
and Wilmington Trust Company, a Delaware banking corporation, as trustee (the
"Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of Suiza Capital
Trust II, a Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration of Trust"), dated as of March 24, 1998, among the Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
12,000,000 of its 5 1/2% Trust Convertible Preferred Securities (liquidation
preference $50 per preferred security) (the "Preferred Securities")
representing preferred undivided beneficial interests in the assets of the
Trust and having the terms set forth in the Declaration of Trust;
WHEREAS, the Preferred Securities will be issued by the Trust and the
proceeds thereof, together with the proceeds from the issuance of the Trust's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Declaration of Trust) of the Guarantor which will be
deposited with Wilmington Trust Company, as Property Trustee under the
Declaration of Trust, as trust assets;
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments
on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Guarantee Agreement for the benefit of the holders of the Common
Securities (as defined herein), except that if an event of default (as defined
in the Indenture (as defined herein)), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments (as
defined in the Common Securities Guarantee) under the Common Securities
Guarantee shall be subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments (as defined herein) under this
Guarantee Agreement.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.
1
<PAGE> 6
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Declaration of Trust as in effect on the date hereof.
"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
Guarantor 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. The terms "controlling" and "controlled" have meanings correlative
to "control."
"Common Securities" means the securities representing common
beneficial interests in the assets of the Trust.
"Common Stock" means common stock, par value $0.01 per share, of the
Guarantor 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 Guarantor and which are not
subject to redemption by the Guarantor.
"Corporate Trust Office" shall mean the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee shall,
at any particular time, be principally administered, which office at the date
of execution of this Guarantee Agreement is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments,
the Guarantor shall have received written notice of default and shall not have
cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by or on behalf of the Trust: (a) any accumulated and unpaid
Distributions required to be paid on the Preferred Securities, if and to the
extent that the Trust has funds on hand available therefor at such time; (b)
the redemption price of any Preferred Securities called for redemption if and
to the extent that the Trust has funds on hand available therefor at such time;
and (c) upon a voluntary or involuntary dissolution, winding up or liquidation
of the Trust (unless the Debentures are distributed to holders of the Preferred
Securities), the lesser of (a) the Liquidation Distribution, to the extent that
the Trust has funds on hand available therefor at such time, and (b) the amount
of assets of the Trust remaining available for distribution to holders of
Preferred Securities.
2
<PAGE> 7
"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Trust, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor
or the Guarantee Trustee.
"Indemnified Person" shall mean the Guarantee Trustee (including in
its individual capacity), any Affiliate of the Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Guarantee Trustee.
"Indenture" means the Indenture, dated as of March 24, 1998, as
supplemented and amended between the Guarantor and Wilmington Trust Company, as
Indenture Trustee.
"List of Holders" has the meaning specified in Section 2.2 (a).
"Majority in Liquidation Preference of the 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 aggregate liquidation preference
of all the outstanding Preferred Securities issued by the Trust.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, the President, the Chief Executive Officer, the Chief
Operating Officer, any Vice President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Guarantor, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
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(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"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.
"Responsible Officer" shall mean, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee
with direct responsibility for the administration of this Guarantee Agreement
and also means, with respect to a particular corporate trust matter, any other
officer of the Guarantee Trustee to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (unless the Guarantee Trustee is acting as Securities
Registrar with respect to the Debentures under the Indenture) (i)
semi-annually, on or before January 15 and July 15 of each year, a list, in
such form as the Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of a date not more than 15 days
prior to the delivery thereof, and (ii) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such written request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied list of Holders or has not otherwise
been received by the Guarantee Trustee. Notwithstanding the foregoing, the
Guarantor shall not be obligated to provide such List of Holders at any time
the Preferred Securities are represented by one or more Global Certificates (as
defined in the Indenture). The
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Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee. Within 60 days after
December 31 in each calendar year, commencing with December 31, 1997, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee, the Securities and Exchange Commission
and the Holders such documents, reports and information, if any, as required by
Section 314 of the Trust Indenture Act and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act; and such compliance
certificate of the Guarantor shall be delivered on or before 120 days after the
end of each calendar year. Delivery of such reports, information and documents
to the Guarantee Trustee is for informational purposes only and the Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Guarantee Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee
Agreement that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver. The Holders of a Majority in
Liquidation Preference of the Securities may, by vote, on behalf of the Holders
of all Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent therefrom.
SECTION 2.7 Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after a
Responsible Officer of the Guarantee Trustee obtains actual knowledge of the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notices of all such Events of Default actually known
to a Responsible Officer of the Guarantee Trustee, unless such defaults have
been cured before the giving of such notice, provided, that, except in the case
of a default in the payment of a
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Guarantee Payment, the Guarantee Trustee shall be fully protected in
withholding such notice if and so long as a Responsible Officer of the
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have actual
knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with the
administration of the Declaration of Trust shall have obtained actual
knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests. The Declaration of Trust and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, and the Guarantee Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder exercising his
or her rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee
on acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder,
and such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to the Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
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(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred;
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee
Trustee; and
(B) in the absence of bad faith on the part of
the Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not on their face they conform to the requirements
of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made;
(iii) the Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in Liquidation Preference of the Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall
require the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers, if
the Guarantee Trustee shall have reasonable grounds for believing that
the repayment of such funds or liability is not reasonably assured to
it under the terms of this Guarantee Agreement or indemnity
satisfactory to it against such risk or liability is not reasonably
assured to it.
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SECTION 3.2 Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, proxy, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request from the Guarantee Trustee, shall
be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel
of its selection, and the advice or opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or opinion. Such legal counsel may be legal counsel to the Guarantor
or any of its Affiliates and may include any of its employees. The
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee and its officers,
directors and agents such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Guarantee Trustee's agents, nominees and custodians) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by
the Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Guarantee
Agreement.
(vi) The Guarantee Trustee shall have no obligation to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other
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evidence of indebtedness or other paper or document, but the Guarantee
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or
by or through its agents, custodians, nominees or attorneys or any
Affiliate, and the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any such person appointed with
due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
written instructions from the Holders of a Majority in Liquidation
Preference of the Securities, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (C) shall be fully protected in relying on and
acting in accordance with such instructions.
(ix) the Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument or other
document (or any rerecording, refiling or registration thereof).
(x) any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities,
and the signature of the Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action; and no third
party shall be required to inquire as to the authority of the
Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Guarantee Agreement, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its agent's
taking such action.
(xi) the Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith,
without negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on
it in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
Agreement. The recitals contained in this Guarantee Agreement shall be taken
as the statements of the Guarantor, and the Guarantee Trustee does not assume
any responsibility for their correctness. The
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Guarantee Trustee makes no representation as to the validity or sufficiency of
this Guarantee Agreement.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation or other Person organized and doing
business under the laws of the United States of America or any state
or territory thereof or of the District of Columbia, or a corporation
of other Person permitted by the Securities and Exchange Commission to
act as an indenture trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority; it being understood
that if such corporation or other Person publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and the Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an
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instrument in writing executed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by an instrument
in writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions
of any Successor Guarantor Trustee.
(f) Upon termination of this Guarantee Agreement or the removal or
resignation of the Guarantee Trustee, the Guarantor shall pay all amounts due
and owing to such Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full, on a subordinated basis as set forth in Section 6.1, to
the extent set forth herein, the Guarantee Payments, to the Holders (without
duplication of amounts theretofore paid by or on behalf of the Trust), as and
when due, regardless of any defense, right of set-off or counterclaim which the
Trust 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 Trust to
pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require
a proceeding first against the Guarantee Trustee, Trust or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be
performed or observed by the Trust;
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(b) the extension of time for the payment by the Trust 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
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Trust 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 Trust or any of the
assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 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 Guarantee Trustee
to give notice to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 5.4 Rights of Holders. The Guarantor expressly acknowledges
that: (i) an executed copy of this Guarantee Agreement will be deposited with
the Guarantee Trustee to be held for the benefit of the Holders; (ii) the
Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf
of the Holders; (iii) the Holders of a Majority in Liquidation Preference of
the Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee Agreement or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) if the Guarantee Trustee fails to enforce the Guarantee, any Holder may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Trust or any other Person.
SECTION 5.5 Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except by
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payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Trust) or upon distribution of Debentures to Holders as
provided in the Declaration of Trust.
SECTION 5.6 Subrogation. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Trust with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE 6
COVENANTS AND SUBORDINATION
SECTION 6.1 Subordination.
(a) If an Event of Default (as defined in the Indenture) has
occurred and is continuing, the rights of holders of Common Securities to
receive payments on liquidation, redemption and otherwise are subordinate to
the rights of Preferred Securities to receive Guarantee Payments under this
Guarantee.
(b) In the event and during the continuation of any default by the
Guarantor in the payment of principal, premium, interest or any other payment
due on any Senior Debt (as defined in the Indenture) continuing beyond the
period of grace, if any, specified in the instrument evidencing such Senior
Debt, unless and until such default shall have been cured or waived or shall
have ceased to exist, and in the event that the maturity of any Senior Debt has
been accelerated because of a default, then no Guarantee Payments shall be made
hereunder by the Guarantor.
(c) In the event of any default (other than a default described in
the immediately preceding paragraph) by the Guarantor under the terms of any
instrument evidencing any Senior Debt, continuing beyond the period of grace,
if any, specified in such instrument, notice of which default shall have been
given by any holder of such Senior Debt to the Indenture Trustee (as defined in
the Indenture), unless and until the earlier of (i) such default shall have
been cured or waived or shall have ceased to exist, or (ii) the continuation of
such default for a period of one hundred eighty days after notice of the
occurrence of such default shall have been given to such Indenture Trustee, no
Guarantee Payments shall be made hereunder by the Guarantor.
(d) Upon any payment by the Guarantor or distribution of assets of
the Guarantor of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding up or liquidation or
reorganization of the Guarantor, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all principal of,
and premium, if any, and interest due or to become due on, all Senior Debt must
be paid in full before any Guarantee Payment is made, and upon such dissolution
or winding up or liquidation or reorganization, any payment by the Guarantor,
or distribution of assets of the Guarantor of any kind or character, whether in
cash, property or securities, to which the Holders or, except for payments
under Article 9 hereof, the Guarantee Trustee would be entitled, except for the
provisions of this
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Section 6.1, shall be paid by the Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Guarantee Trustee under this
Guarantee if received by them or it, directly to the holders of Senior Debt
(pro rata to such holders on the basis of the respective amounts of Senior Debt
held by such holders, as calculated by the Guarantor) or their representative
or representatives, or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing such Senior Debt may have been issued, as
their respective interests may appear, to the extent necessary to pay such
Senior Debt in full, in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior Debt,
before any such payment or distribution is made to the Holders or to the
Guarantee Trustee.
(e) In the event that, notwithstanding the foregoing, any payment
shall be received by the Guarantee Trustee when such payment is prohibited by
the preceding paragraphs (a) through (d) of this Section 6.1, and if such fact,
at or prior to the time of such payment, shall have been made known to the
Guarantee Trustee by written notice, such payment shall be forthwith paid over
and delivered to, the holders of Senior Debt or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior
Debt (or their representative or representatives or a trustee) notify the
Guarantee Trustee in writing within 90 days of such payment of the amounts then
due and owing on the Senior Debt and only the amounts specified in such notice
to the Guarantee Trustee shall be paid to the holders of Senior Debt.
(f) For purposes of this Section 6.1, the words, "cash, property
or securities" shall not be deemed to include shares of stock of the Guarantor
as reorganized or readjusted, or securities of the Guarantor or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article 6 with respect to the Guarantee Payments to the payment of all Senior
Debt which may at the time be outstanding; provided, that (i) such Senior Debt
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such
Senior Debt are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Guarantor with, or
the merger of the Guarantor with or into, another Person or the liquidation or
dissolution of the Guarantor following the conveyance, transfer or lease of all
or substantially all of its properties and assets on a consolidated basis to
another Person upon the terms and conditions provided for in Article 8 of the
Indenture shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section 6.1 if such other person shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions stated in Article 8 of the Indenture.
(g) Amounts paid or payable by the Guarantor under Article 9
hereof shall not be subject to the provisions and operation of this Article 6.
(h) This Guarantee Agreement shall rank pari passu with any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any affiliate of the Guarantor and senior to
the Common Stock.
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SECTION 6.2 Certain Covenants of the Guarantor.
(a) Guarantor covenants and agrees that if and so long as (i) the
Trust is the holder of all the Debentures, (ii) a Tax Event (as defined in the
Declaration of Trust) in respect of the Trust 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 of Trust) in respect of the
Preferred Securities and Common Securities, the Guarantor will pay to the Trust
such Additional Sums.
(b) The Guarantor covenants and agrees that it will not, and will
not cause any Subsidiary of the Guarantor 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, with respect to both (i) and (ii), (a) any dividend,
redemption, liquidation, interest, principal or guarantee payment by the
Guarantor 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 Agreement, (c) purchases of Common Stock
related to the issuance of 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 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 (x) 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 a Debenture Event of
Default, (y) the Guarantor shall be in default with respect to its payment of
any obligations under the Guarantee Agreement or (z) the Guarantor shall have
given notice of its exercise of its right to defer the payment of amounts under
the Debenture as provided in the Indenture and shall not have rescinded such
notice, or such deferral period, or any extension thereof, shall be continuing;
provided, that, in the case of the immediately preceding clause (z), the
Guarantor will be allowed to declare and pay dividends on its Series A
Preferred Stock.
(c) The Guarantor covenants and agrees for so long as Preferred
Securities are outstanding (i) 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 the Guarantor's ownership of the
Common Securities, provided further that Guarantor may pledge the Common
Securities to First United National Bank as Administrative Agent under the
Security Agreement related to the credit facility with such agent and other
lenders, (iii) not to voluntarily dissolve, wind-up, liquidate or terminate the
Trust, except (a) in connection with the exchange of the Debentures to the
holders of the Preferred Securities in liquidation of the Trust upon the
redemption of all outstanding Preferred Securities
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or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the Declaration of Trust, (iv) to maintain the reservation for
issuance of the number of shares of 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 best efforts, consistent with the terms and provisions of
the Declaration of Trust, to cause the Trust 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 Common Stock upon an
election by the holders of the Preferred Securities to convert such Preferred
Securities into Common Stock.
ARTICLE 7
TERMINATION
SECTION 7.1 Termination. This Guarantee Agreement shall terminate
and be of no further force and effect upon (i) full payment of the Redemption
Price of all Preferred Securities, (ii) the distribution of Debentures to the
Holders in exchange for all of the Preferred Securities, (iii) full payment of
the amounts payable in accordance with the Declaration of Trust upon
dissolution of the Trust or (iv) the distribution, if any, of Common Stock to
the holders of the Preferred Securities in respect of the conversion of all
such holders' Preferred Securities into Common Stock. Notwithstanding the
foregoing, this Guarantee Agreement 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 Preferred Securities or this Guarantee
Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1 Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred 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 8.2 Amendments. Except with respect to any changes that do
not materially adversely affect the rights of the Holders (in which case no
vote will be required), this Guarantee Agreement may not be amended without 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
of Trust concerning meetings of the Holders shall apply to the giving of such
approval. No provisions in Article 3, Article 4 or Article 9, Section 6.1(g)
or this sentence may be amended without the prior written consent of the
Guarantee Trustee, which consent may be granted or withheld in the sole
discretion of the Guarantee Trustee. The Guarantor shall furnish the Guarantee
Trustee with an Officers' Certificate and an Opinion of Counsel to the effect
that any amendment of this Agreement is authorized and permitted.
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SECTION 8.3 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:
Suiza Foods Corporation
3811 Turtle Creek Boulevard
Dallas, Texas 75219
Phone: (214)528-9922
Facsimile: (214)528-9929
Attention: General Counsel
(b) if given to the Trust, in care of the Guarantee Trustee, at
the Trust's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Trust may give notice of to
the Holders:
Suiza Capital Trust II
c/o Suiza Foods Corporation
3811 Turtle Creek Boulevard
Dallas, Texas 75219
Phone: (214)528-9922
Facsimile: (214)528-9929
Attention: General Counsel
with a copy to:
Wilmington Trust Company, as Guarantee Trustee
1100 N. Market Street
Wilmington, Delaware 19890
Phone: (302)651-8775
Facsimile: (302)651-1576
Attention: Corporate Trust Administration
(c) if given to any Holder, at the address set forth on the books
and records of the Trust.
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.
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SECTION 8.4 Benefit. This Guarantee Agreement is solely for the
benefit of the Holders, the Guarantee Trustee and other Indemnified Persons and
is not separately transferable from the Preferred Securities.
SECTION 8.5 Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement 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 Agreement has the
same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6 Governing Law. THIS GUARANTEE AGREEMENT 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.
ARTICLE 9
INDEMNIFICATION
SECTION 9.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Holder for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Guarantee Agreement and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Guarantee Agreement or by law, except that an Indemnified Person
shall be liable for any such loss, damages
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<PAGE> 23
or claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Preferred Securities
might properly be paid.
SECTION 9.2 Compensation and Indemnification.
The Guarantor agrees to pay to the Guarantee Trustee such compensation
for its services as shall be mutually agreed upon by the Guarantor and the
Guarantee Trustee (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust). The
Guarantor shall reimburse the Guarantee Trustee upon request for all reasonable
out-of-pocket expenses incurred by it, including the reasonable compensation
and expenses of the Guarantee Trustee's agents and counsel, except any expense
as may be attributable to the negligence or bad faith of the Guarantee Trustee.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The provisions of this
Section 9.2 shall survive the termination of this Guarantee Agreement and shall
survive the resignation or removal of the Guarantee Trustee.
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<PAGE> 24
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.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
SUIZA FOODS CORPORATION,
as Guarantor
By: /s/ Gregg L. Engles
----------------------------------------
Name: Gregg L. Engles
Title: Chairman and Chief Executive Officer
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Guarantee Trustee
By: /s/ Patricia A. Evans
----------------------------------------
Name: Patricia A. Evans
Title: Financial Services Officer
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<PAGE> 1
EXHIBIT 10.1
10,000,000 Preferred Securities
SUIZA CAPITAL TRUST II
5 1/2% Trust Convertible Preferred Securities
(Liquidation Preference $50 per Preferred Security)
guaranteed to a limited extent by,
and convertible into Common Stock of,
SUIZA FOODS CORPORATION
REGISTRATION RIGHTS AGREEMENT
March 24, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
J.P. MORGAN SECURITIES, INC.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Suiza Capital Trust II, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), and Suiza Foods Corporation, a
Delaware corporation, as depositor of the Trust and as guarantor (the
"Company"), proposes to issue and sell to the Initial Purchasers (as defined
herein), upon the terms set forth in the Purchase Agreement (as defined) an
aggregate of 10,000,000 and, at the election of the Purchasers, up to an
additional 2,000,000 of 5 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
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<PAGE> 2
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 Wilmington Trust Company,
as guarantee trustee, and may be converted or exchanged under certain
circumstances into 5 1/2% Convertible Subordinated Debentures due 2028 of the
Company (the "Debentures") held by the Trust and then into Common Stock, par
value $0.01 per share ("Common Stock"), of the Company. The Preferred
Securities, the Debentures, the Guarantee and the 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 Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Initial Purchasers thereunder, the Trust
and the Company each agree with the Initial Purchasers for the benefit of the
Initial Purchasers and Holders (as defined) 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 (as defined), the following defined terms shall
have the following meanings:
"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 March 24, 1998, among Suiza Foods Corporation, as Depositor,
Wilmington Trust Company, as Trustee, Wilmington Trust Company, 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.
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<PAGE> 3
"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)(iii).
"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
from time to time of such Security, including the Initial Purchasers. 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 Indenture, dated as of March 24, 1998, between
the Company and Wilmington Trust Company, as indenture trustee, as amended and
supplemented from time to time in accordance with its terms.
"INITIAL PURCHASERS" means the Initial Purchasers named in Schedule I
to the Purchase Agreement.
"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.
"PERSON" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
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<PAGE> 4
"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 to the extent
incorporated by reference therein.
"PURCHASE AGREEMENT" means the Purchase Agreement dated March , 1998
among the Initial Purchasers, the Trust and the Company.
"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 Security except any such Security
which (i) has been effectively registered under the Securities Act and sold in
a manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to Rule 144(k) (or any
successor provision thereto), (iii) has 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) has otherwise been transferred and after such
transfer is 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" has the meaning assigned thereto in the first paragraph
hereof.
"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
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<PAGE> 5
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 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 Common Stock shall be
treated as representing the liquidation amount of Preferred Securities or the
principal amount of Debentures that was surrendered for conversion or exchange
in order to receive such number of shares of 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 its best efforts to cause such Shelf Registration Statement
to be declared effective under the Act within 150 calendar days after the first
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 its best efforts:
(i) To keep the Shelf Registration
Statement continuously effective (subject to any Suspension
Period (as defined)) in order to permit the Prospectus to be
usable by Electing Holders for resales of Registrable
Securities for a period that will terminate upon the earlier
of the following: (1) when all of
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<PAGE> 6
the Preferred Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration
Statement; (2) 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; (3) when all of
the shares of 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 (4)
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").
(ii) After the Effective Time of the
Shelf Registration Statement, as promptly as practicable 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 reasonably 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 and the Company in accordance with Section 3(a)(ii)
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 and/or
Debentures are convertible into securities other than 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 and/or Debentures
may then be convertible into such securities.
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<PAGE> 7
(c) If (i) on or prior to the date 90 days after the Closing Date
a Shelf Registration Statement has not been filed with the Commission or (ii)
on or prior to the date 150 days after the Closing Date 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 or use of the prospectus related
thereto is suspended 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 (i) the Shelf Registration Statement again becomes effective or the
use of the prospectus related thereto is no longer suspended and (ii) the end
of the Effectiveness Period.
(d) Each of the Company and the Trust shall be deemed not to have
used its 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 would result in Electing Holders not being able to offer and
sell any of their Registrable Securities during such period, unless (i) such
action is required by applicable law or (ii) upon the occurrence of any event
contemplated by Section 3(d)(ii)(3) (even if such event results from a
voluntary action of the Company or is within the control of the Company), and
such action is taken by the Trust or the Company in good faith and for valid
business reasons or (iii) the continued effectiveness of the Shelf Registration
Statement would require the Company to disclose a material financing,
acquisition or other corporate development, and the Chairman of the Board,
Chief Executive Officer, President, Chief Financial Officer and/or the General
Counsel shall have determined in good faith that such disclosure is not in the
best interests of the Company and its stockholders, and, in the case of clause
(ii) above, the Trust and the Company thereafter promptly comply with the
requirements of Section 3(j) below. Any such period during which
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<PAGE> 8
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) (i) 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 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 in writing 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.
(ii) 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 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 in writing 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
provided 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.
(iii) 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)(i) or 3(a)(ii) and provided to the Trust and the
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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.
(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.
(c) The Company and the Trust shall as promptly as practicable
take such action as may be necessary so that (i) each of the Shelf Registration
Statement and any amendment thereto and the Prospectus 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, (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) (i) The Company shall promptly advise the Initial
Purchasers and, in the case of clause (1), the Electing
Holders and, if requested by the Initial Purchasers or any
such Electing Holder, confirm such advice in writing:
(1) 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
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<PAGE> 10
(2) of any request by the Commission for
amendments or supplements to the Shelf Registration
Statement or the Prospectus or for additional
information.
(ii) The Company shall promptly advise each
Electing Holder of:
(1) the issuance by the Commission of
any stop order suspending the effectiveness of the
Shelf Registration Statement or, if the Company
becomes aware of such, the initiation of any
proceedings for such purpose;
(2) 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 or, if the Company becomes aware
of such, the initiation of any proceeding for such
purpose; and
(3) the happening of any event that
requires the making of any changes in the Shelf
Registration Statement or the Prospectus 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 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) The Company and the Trust shall each use its 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 included therein, 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.
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<PAGE> 11
(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)(ii)(3) or
during any Suspension Period) to the use of the Prospectus by each of the
Electing Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to
the Shelf Registration Statement, the Company and the Trust shall (i) 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, (ii) 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 (iii) take any and 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 (1) 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), (2) 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 timely 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 Registrable Securities pursuant to the Shelf Registration Statement.
(j) Upon the occurrence of any event contemplated by Section
3(d)(ii)(3), the Company and the Trust shall as promptly as practicable 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
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<PAGE> 12
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)(ii)(3) or of any Suspension Period, each Holder
shall forthwith discontinue disposition of Registrable Securities (and shall
cause its agents and representatives to discontinue such disposition) 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 (and in the possession of
such Holder's agents and representatives) of the Prospectus covering such
Registrable Securities current at the time of such notice.
(k) Not later than the Effective Time, 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 Registrable Securities, in a form eligible for
deposit with DTC.
(l) The Company and the Trust shall each use its best efforts to
comply with all applicable Rules, and to make generally available to its
securityholders as soon as they become available, 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
reasonable best efforts to cause the Indenture, the Declaration and the
Guarantee to be qualified under the Trust Indenture Act in a timely manner.
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<PAGE> 13
(n) In the event of an underwritten offering conducted pursuant to
Section 6, the Company and the Trust shall, if requested, as promptly as
practicable include or 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, cause 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) The Company and the Trust shall:
(i)(1) 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
(2) 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 provided 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
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<PAGE> 14
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;
(ii) in connection with any underwritten offering
conducted pursuant to Section 6, enter into such agreements
(including underwriting agreements) and make such
representations and warranties to the Holders participating in
such underwritten offering and to the Managing Underwriters,
in form, substance and scope as are customarily entered into
and 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, a statement that such counsel is
not aware that the Shelf Registration Statement and the
Prospectus, including the documents incorporated by reference
therein, includes an untrue statement of a material fact or
omits a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, 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
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<PAGE> 15
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 use its best efforts to
cause the Common Stock issuable upon conversion of the Preferred Securities
and/or Debentures to be listed, subject to official notice of issuance, on the
New York Stock Exchange or other stock exchange or trading system on which the
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 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 (and
shall cause its agents and representatives to 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 (and in the possession of such Holder's agents and representatives),
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
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<PAGE> 16
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 Sections 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 principal amount of 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, that participates in or 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"), from and 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
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<PAGE> 17
the 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. Notwithstanding the foregoing, 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 in a Prospectus if the Trust
or the Company shall have demonstrated that (i) such untrue statement or
omission or alleged untrue statement or omission is corrected in an amendment
or supplement to such Prospectus and (ii) having previously been informed by or
on behalf of the Trust or the Company of such untrue statement or alleged
untrue statement or omission or alleged omission and having been timely
furnished by or on behalf of the Trust or the Company with the requisite
quantity 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 Person and 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 participates in or 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, their respective
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, the Trust 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
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<PAGE> 18
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 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 the Indemnifying Party has been materially prejudiced
by such failure), 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. 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 assume the defense of such action or
proceeding in a timely fashion 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 available to such Indemnified Holder
that are different from or additional to those available to the Indemnifying
Party or that a conflict of interest 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 a
majority of 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 and all such fees and expenses shall be reimbursed
as they are incurred. The Trust and the Company shall not be liable for any
loss, damage, liability or expense by reason of any settlement of any such
action or proceeding effected without the Company's prior written consent,
which
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consent shall not be unreasonably withheld, and the Indemnifying Party shall
indemnify and hold harmless any Indemnified Holder from and against any loss,
damage, liability or expense by reason of any settlement of any action or
proceeding (i) effected with the written consent of the Indemnifying Party or
(ii) notwithstanding the foregoing, effected without its written consent if the
settlement is entered into more than twenty business days after the
Indemnifying Party shall have received a request from the Indemnified Holder
for reimbursement of the fees and expenses of counsel (in any case where such
fees and expenses are at the expense of the Indemnifying Party) and, prior to
the date of such settlement, the Indemnifying Party shall have failed to comply
with such reimbursement request. No Indemnifying Party shall, without the
written consent of the Indemnified Holder, 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 (i) includes an unconditional release of the Indemnified Holder from
all liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of, the Indemnified Holder.
(d) Contribution. If the indemnification provided for in this
Section 5 is 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 on the one hand and the Indemnified Holder on the other 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 a party 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 that 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
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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 any underwriters, 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
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
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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 the Trust or the
Company, required under applicable law to enable such Holder 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. 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 Registration
21
<PAGE> 22
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 such 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.
(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-delivery, 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 Initial 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 Initial Purchasers or the Company and the Trust by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
22
<PAGE> 23
(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 of this Registration Rights Agreement and that each
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.
23
<PAGE> 24
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Trust and you.
Very truly yours,
SUIZA CAPITAL TRUST II
By: /s/ Joseph B. Armes
---------------------------------------------
Name: Joseph B. Armes ,
-------------------------------------------
as Administrative Trustee
SUIZA FOODS CORPORATION
By: /s/ Joseph B. Armes
---------------------------------------------
Name: Joseph B. Armes
-------------------------------------------
Title: Executive Vice President
-------------------------------------------
The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BEAR, STEARNS & CO. INC.
J.P. MORGAN SECURITIES, INC.
By: Donaldson, Lufkin & Jenrette
Securities Corporation
By: /s/ Michael L. Crow
-------------------------------------------
Name: Michael L. Crow
------------------------------------------
Title: Senior Vice President
-----------------------------------------
24
<PAGE> 1
EXHIBIT 11 - Statement re computation of per share earnings
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------
1998 1997
------------ ------------
(In thousands, except share and per-share amounts)
<S> <C> <C>
Calculation of basic earnings per share:
Income from continuing operations $ 18,053 $ 22,405
Less preferred stock dividends (87) (75)
------------ ------------
Income from continuing operations applicable to
common stock $ 17,966 $ 22,330
============ ============
Total weighted average shares outstanding 30,727,958 28,034,025
============ ============
Basic EPS from continuing operations $ 0.58 $ 0.80
============ ============
Calculation of diluted earnings per share:
Income from continuing operations $ 18,053 $ 22,405
Less preferred stock dividends (87) (75)
Dilutive effect on earnings from conversion of
mandatorily redeemable convertible
preferred securities 327
------------ ------------
Income from continuing operations applicable to
common stock $ 18,293 $ 22,330
============ ============
Weighted average shares outstanding 30,727,958 28,034,025
Stock option conversion 2,415,405 1,460,716
Dilutive effect of conversion of mandatorily redeemable
convertible preferred securities 619,048
Earnings contingency 59,480
------------ ------------
Total weighted average shares outstanding 33,821,891 29,494,741
============ ============
Diluted EPS from continuing operations $ 0.54 $ 0.76
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
FINANCIAL STATEMENTS FOR THE 3-MONTH PERIOD ENDED MARCH 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 84,025
<SECURITIES> 0
<RECEIVABLES> 222,004
<ALLOWANCES> 0
<INVENTORY> 105,444
<CURRENT-ASSETS> 570,729
<PP&E> 462,156
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,946,748
<CURRENT-LIABILITIES> 301,284
<BONDS> 493,973
682,500
3,741
<COMMON> 314
<OTHER-SE> 398,567
<TOTAL-LIABILITY-AND-EQUITY> 1,946,748
<SALES> 593,121
<TOTAL-REVENUES> 593,121
<CGS> 456,148
<TOTAL-COSTS> 95,384
<OTHER-EXPENSES> (702)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,651
<INCOME-PRETAX> 27,640
<INCOME-TAX> 9,587
<INCOME-CONTINUING> 18,053
<DISCONTINUED> (3,161)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,892
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.45
</TABLE>
