As filed with the Securities and Exchange Commission on February 5, 1997
Registration Nos. 333-_____
333-_____-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<S> <C>
Leucadia National Corporation Leucadia Capital Trust I
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its Trust Agreement)
New York Delaware
(State or other jurisdiction of incorporation or organization) (State or other jurisdiction of incorporation or organization)
6199 [ ]
(Primary standard industrial classification code number) (Primary standard industrial classification code number)
13-26155 Applied For
(l.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
</TABLE>
<TABLE>
<S> <C>
c/o Leucadia National Corporation
315 Park Avenue South 315 Park Avenue South
New York, N.Y. 10010-3607 New York, N.Y. 10010-3607
(212) 460-1900 (212) 460-1900
(Address, including zip code, and telephone number, including (Address, including zip code, and telephone number,
area code, of registrant's principal executive offices) including area code, of registrant's principal executive offices)
</TABLE>
JOSEPH A. ORLANDO
Vice President and Chief Financial Officer
Leucadia National Corporation
315 Park Avenue South
New York, N.Y. 10010-3607
(212) 460-1900
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
with a copy to:
STEPHEN E. JACOBS, ESQ.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
Approximate date of commencement of proposed sale to the public: As
promptly as practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Title of Each Class Proposed Maximum Amount of
of Securities Amount to Be Proposed Minimum Aggregate Offering Registration
to Be Registered Registered Offering Price(1) Price(1) Fee
====================================================================================================================================
<C> <C> <C> <C> <C>
8.65% Capital Trust Pass-through Securities(SM) of $150,000,000 100% $150,000,000 $45,455
Leucadia Capital Trust I .........................
- ------------------------------------------------------------------------------------------------------------------------------------
Junior Subordinated Deferrable Interest Debentures due
2027 of Leucadia National Corporation (2)......... N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Leucadia National Corporation Guarantee with respect
to the Capital Trust Pass-Through Securities(SM) (3) N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Total (4)......................................... $150,000,000 100% $150,000,000(5) $45,455
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<FN>
(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures were purchased by
Leucadia Capital Trust I with the proceeds of the sale of the Capital Trust
Pass-through Securities(SM) (the "Old Capital Securities"). No separate
consideration will be received for the Junior Subordinated Deferrable
Interest Debentures distributed upon any liquidation of Leucadia Capital
Trust I.
(3) No separate consideration will be received for the Leucadia National
Corporation Guarantee.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of Leucadia National Corporation, the rights
of holders of Junior Subordinated Deferrable Interest Debentures of
Leucadia National Corporation under the Indenture, the rights of holders of
Capital Securities of Leucadia Capital Trust I under a Declaration of Trust
and the rights of holders of the Capital Securities under the Guarantee of
Leucadia National Corporation, which taken together fully and
unconditionally guarantee the obligations of Leucadia Capital Trust I under
the Capital Securities.
(5) Such amount represents the aggregate liquidation amount of the Capital
Securities to be issued and exchanged hereunder and the principal amount of
Junior Subordinated Deferrable Interest Debentures that may be distributed
upon liquidation of Leucadia Capital Trust I.
</FN>
</TABLE>
The registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date or until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
SUBJECT TO COMPLETION, DATED FEBRUARY 5, 1997
PROSPECTUS
$150,000,000
LEUCADIA CAPITAL TRUST I
OFFER TO EXCHANGE ITS 8.65% CAPITAL TRUST
PASS-THROUGH SECURITIES(SM) (TRUPS(SM))
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 8.65%
CAPITAL TRUST PASS-THROUGH SECURITIES(SM) (TRUPS(SM))
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN, BY
LEUCADIA NATIONAL CORPORATION
The Exchange Offer and Withdrawal Rights will
expire at 5:00 p.m., New York City time, on
_______________, 1997, unless extended.
Leucadia Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby offers, upon the
terms and subject to the conditions set forth in this Prospectus (as the same
may be amended or supplemented from time to time, the "Prospectus") and in the
accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange up to $150,000,000 aggregate liquidation amount of its
8.65% Capital Trust Pass-through Securities(SM) (TRUPS(SM)) (liquidation amount
$1,000 per Capital Security) (the "New Capital Securities"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to a Registration Statement (as defined herein) of which this
Prospectus constitutes a part, for a like liquidation amount of its outstanding
8.65% Capital Trust Pass-through Securities(SM) (TRUPS(SM)) (liquidation amount
$1,000 per Capital Security) (the "Old Capital Securities"), of which
$150,000,000 aggregate liquidation amount is outstanding. Pursuant to the
Exchange Offer, Leucadia National Corporation, a New York corporation (the
"Company"), is also exchanging (i) its guarantee with respect to the payment of
distributions and other payments on liquidation or redemption of the Old Capital
Securities (the "Old Guarantee") for a like guarantee of the New Capital
Securities (the "New Guarantee"), and (ii) all of its outstanding 8.65% Junior
Subordinated Deferrable Interest Debentures due 2027 (the "Old Subordinated Debt
Securities"), of which $154,640,000 aggregate principal amount is outstanding,
for a like aggregate principal amount of its 8.65% Junior Subordinated
Deferrable Interest Debentures due 2027 (the "New Subordinated Debt
Securities"), which New Guarantee and New Subordinated Debt Securities also have
been registered under the Securities Act. The Old Capital Securities, the Old
Guarantee and the Old Subordinated Debt Securities are collectively referred to
herein as the "Old Securities"
<PAGE>
(continued from cover page)
and the New Capital Securities, the New Guarantee and the New Subordinated Debt
Securities are collectively referred to herein as the "New Securities."
The terms of the New Securities are identical in all material
respects to the respective terms of the Old Securities, except that (i) the New
Securities have been registered under the Securities Act and therefore will not
be subject to certain restrictions on transfer applicable to the Old Securities,
(ii) the New Capital Securities will not provide for any increase in the
distribution rate thereon, and (iii) the New Subordinated Debt Securities will
not provide for any increase in the interest rate thereon. See "Description of
the Capital Securities." The New Capital Securities are being offered for
exchange in order to satisfy certain obligations of the Company and the Trust
under the Registration Rights Agreement, dated January 21, 1997 (the
"Registration Rights Agreement"), among the Company, the Trust and Salomon
Brothers Inc, as representative of the Initial Purchasers (as defined herein) of
the Old Capital Securities. In the event that the Exchange Offer is consummated,
any Old Capital Securities which remain outstanding after consummation of the
Exchange Offer and the New Capital Securities issued in the Exchange Offer will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the Declaration (as defined
herein).
SEE "RISK FACTORS" BEGINNING ON PAGE 14 OF THIS PROSPECTUS FOR
CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE NEW SECURITIES, INCLUDING
THE PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE NEW
SUBORDINATED DEBT SECURITIES AND THE NEW CAPITAL SECURITIES MAY BE DEFERRED AND
THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ________ __, 1997.
The Old Capital Securities and the New Capital Securities are
referred to as the "Capital Securities." The Old Capital Securities represent
and the New Capital Securities when issued will represent undivided beneficial
interests in the assets of the Trust. The Company owns all of the common
securities of the Trust (the "Common Securities") representing undivided
beneficial interests in the assets of the Trust. The Trust exists for the sole
purpose of issuing the Common Securities and the Capital Securities (together,
the "Trust Securities") and investing the proceeds thereof in the Subordinated
Debt Securities (as defined herein) and certain other limited activities
described herein.
The Old Subordinated Debt Securities and the New Subordinated
Debt Securities are referred to as the "Subordinated Debt Securities" and the
Old Guarantee and the New Guarantee are referred to as the "Guarantee." The Old
Subordinated Debt Securities and the Old Guarantee are, and the New Subordinated
Debt Securities and the New Guarantee when issued will be, unsecured obligations
of the Company, and are or will be, as the case may be, subordinate and junior
in right of payment to other existing and future indebtedness of the Company, as
described herein. Upon a Declaration Event of Default (as defined herein), the
holders of the Capital Securities will have a preference over the holders of the
Common Securities with respect to payments in respect of redemption, liquidation
and otherwise.
Holders of the Capital Securities are entitled to receive
cumulative cash distributions at an annual rate of 8.65% per annum of the
liquidation amount of $1,000 per Capital Security, accruing from
(ii)
<PAGE>
(continued from cover page)
January 21, 1997, the date of original issuance of the Old Capital Securities,
and (subject to extension of distribution payment periods described below)
payable semiannually in arrears on January 15 and July 15 of each year,
commencing July 15, 1997 ("distributions"). The payment of distributions on the
Capital Securities out of moneys held by the Trust and payments on liquidation
of the Trust or the redemption of the Capital Securities, as set forth below,
are guaranteed by the Company as described herein. The Guarantee covers payments
of distributions and other payments on the Capital Securities only if and to the
extent that the Trust has funds available therefor, which funds will not be
available except to the extent the Company has made payments of interest or
principal (or premium, if any) or other payments on the Subordinated Debt
Securities held by the Trust.
The Guarantee, when taken together with the Company's
obligations under the Subordinated Debt Securities, the Declaration and the
Indenture (as defined herein), including its obligations to pay costs, expenses,
debts and other obligations of the Trust (other than with respect to the Trust
Securities), provides a full and unconditional guarantee on a subordinated basis
by the Company of amounts due on the Capital Securities. See "Risk Factors --
Guarantee Covers Distributions and Other Payments Only to the Extent the Trust
Has Available Funds; Related Remedies." The obligations of the Company under the
Guarantee and the Subordinated Debt Securities are subordinate and junior in
right of payment to all present and future Senior Indebtedness (as defined
herein) of the Company and are also effectively subordinate to claims of
creditors of the Company's subsidiaries. At September 30, 1996, the aggregate
amount of Senior Indebtedness and liabilities and obligations of the Company's
subsidiaries that would be effectively ranked senior to the Guarantee and the
Subordinated Debt Securities was approximately $3,805,301,000, exclusive of
customer banking deposits ("Deposits"). At September 30, 1996, after giving
effect to the issuance in October 1996 of the Company's 7 7/8% Senior
Subordinated Notes due 2006 (the "7 7/8% Notes") and the related repurchase of
certain of the Company's 10 3/8% Senior Subordinated Notes due 2002 (the "10
3/8% Notes"), the aggregate amount of Senior Indebtedness and liabilities and
obligations of the Company's subsidiaries that would be effectively ranked
senior to the Guarantee and the Subordinated Debt Securities was approximately
$3,837,391,000, exclusive of Deposits. See "Capitalization." There are no terms
in the Subordinated Debt Securities, the Capital Securities or the Guarantee
that limit the ability of the Company or its subsidiaries to incur additional
indebtedness, liabilities and obligations, including such indebtedness that
ranks senior to the Subordinated Debt Securities and the Guarantee. The holders
of the Common Securities will be entitled to receive distributions upon any
liquidation of the Trust pro rata with the holders of the Capital Securities,
except that if a Declaration Event of Default has occurred and is continuing,
the Capital Securities shall have a priority over the Common Securities.
The distribution rate and the distribution payment dates and
other payment dates for the Capital Securities will correspond to the interest
rate and interest payment dates and other payment dates on the Subordinated Debt
Securities, which are the sole assets of the Trust.
The Company has the right, subject to the conditions set forth
herein, to defer payments of interest on the Subordinated Debt Securities by
extending the interest payment period on the Subordinated Debt Securities at any
time and from time to time for up to 10 consecutive semiannual periods (each
such extended interest payment period, an "Extension Period"), provided that no
Extension Period may extend beyond the maturity of the Subordinated Debt
Securities. If interest payments are so deferred, distributions on the Capital
Securities and the Common Securities will also be deferred and the Company
(subject to certain exceptions set forth herein) will not be permitted to
declare or pay any such distributions with respect to the Company's capital
stock (which currently consists of common shares) or to make any payment with
respect to debt securities of the Company that rank pari passu with or junior to
the Subordinated Debt Securities. During any such Extension Period, interest
will continue to accrue on the Subordinated Debt Securities for United States
federal income tax purposes in respect of such deferred interest. As a result,
during any Extension Period, holders of the Capital
(iii)
<PAGE>
(continued from cover page)
Securities will be required to include deferred income in their gross income for
United States federal income tax purposes on the deferred amounts in advance of
receipt of cash distributions with respect to such deferred interest payments.
There could be multiple Extension Periods of varying lengths, each up to 10
consecutive semiannual periods, throughout the term of the Subordinated Debt
Securities. See "Description of the Subordinated Debt Securities -- Option to
Extend Interest Payment Period," "Risk Factors -- Option to Extend Interest
Payment Period for Up to Five Years and Consequent Deferral of Distribution on
Capital Securities" and "Certain Federal Income Tax Consequences -- US Holders
- -- Original Issue Discount."
The Subordinated Debt Securities are redeemable by the Company
at the Call Price (as defined herein), plus accrued and unpaid interest to the
date of redemption, in whole or in part, at any time and from time to time, on
or after January 15, 2007 (the "Optional Redemptions"). In certain limited
circumstances described herein, upon the occurrence of a Tax Event (as defined
herein), the Subordinated Debt Securities also are redeemable by the Company, in
whole or in part at any time, at par, together with accrued and unpaid interest
thereon to the date of the redemption. Upon redemption by the Company or at
maturity of the Subordinated Debt Securities, the Trust must redeem on a pro
rata basis its Trust Securities having an aggregate liquidation amount equal to
the aggregate principal amount of the Subordinated Debt Securities so redeemed
or matured at a redemption price (the "Redemption Price") equal to (i) $1,000
per Trust Security, if redeemed either upon the maturity of the Subordinated
Debt Securities or upon the occurrence and continuation of a Tax Event under
certain limited circumstances described herein, or (ii) in the case of Optional
Redemptions of the Subordinated Debt Securities, an amount per Trust Security
equal to the product of $1,000 and the applicable percentage used to determine
the Call Price for the Subordinated Debt Securities being redeemed, plus in all
cases, accrued and unpaid distributions on such Trust Securities to the date
fixed for redemption. See "Description of the Capital Securities -- Redemption."
The Capital Securities will be redeemed upon maturity of the Subordinated Debt
Securities, whereupon the Trust will be dissolved. See "Description of the
Capital Securities -- Tax Event Redemption" and "Description of the Subordinated
Debt Securities."
The Company, as the holder of all of the outstanding Common
Securities, has the right at any time to dissolve the Trust (including, without
limitation, upon the occurrence of a Tax Event) and, after satisfaction of
liabilities to creditors of the Trust (to the extent not satisfied by the
Company), the Subordinated Debt Securities must be distributed to the holders of
the Trust Securities, on a pro rata basis, in accordance with the aggregate
stated liquidation amount thereof, in liquidation of the Trust.
In the event of the involuntary or voluntary dissolution of
the Trust, other than in connection with a redemption or maturity of
Subordinated Debt Securities as described above, after satisfaction of
liabilities to creditors of the Trust (to the extent not satisfied by the
Company), the holders of the Capital Securities generally will be entitled to
receive the stated liquidation amount thereof plus accrued and unpaid
distributions thereon to the date of payment, unless, in connection with such
dissolution, the Subordinated Debt Securities held by the Trust are distributed
to the holders of the Trust Securities issued by the Trust as would be required
in certain circumstances. See "Description of the Capital Securities --
Liquidation Distribution Upon Dissolution."
The Old Capital Securities have been issued and may be
transferred only in blocks having a stated liquidation amount or an aggregate
principal amount, as the case may be, of not less than $100,000 (100 Old Capital
Securities). See "Description of the Capital Securities -- Restrictions on
Transfer." The New Capital Securities will not be so restricted.
Based on interpretations by the staff of the Securities and
Exchange Commission (the "Commission"), as set forth in no-action letters issued
to third parties, the Company and the Trust believe that the New Securities
issued pursuant to the Exchange Offer may be offered for resale, resold or
otherwise transferred by holders thereof (other than any holder that is an
"affiliate" of the Company or the Trust as
(iv)
<PAGE>
(continued from cover page)
defined under Rule 405 of the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act; provided
that such New Securities are acquired in the ordinary course of such holders'
business and such holders are not engaged in, and do not intend to engage in, a
distribution of such New Securities and have no arrangement or understanding
with any person to participate in the distribution of such New Securities.
However, the staff of the Commission has not considered the Exchange Offer in
the context of a no-action letter, and there can be no assurance that the staff
of the Commission would make a similar determination with respect to the
Exchange Offer as in such other circumstances. By tendering the Old Capital
Securities in exchange for New Capital Securities, each holder, other than a
broker-dealer, will represent to the Company and the Trust that: (i) it is not
an affiliate of the Company or the Trust (as defined under Rule 405 of the
Securities Act); (ii) any New Capital Securities to be received by it were
acquired in the course of its ordinary business; and (iii) it is not engaged in,
and does not intend to engage in, a distribution of the New Capital Securities
and has no arrangement or understanding with any person to participate in a
distribution (within the meaning of the Securities Act) of the New Capital
Securities.
Each broker-dealer that receives New Capital Securities for
its own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Capital Securities received in
exchange for Old Capital Securities where such Old Capital Securities were
acquired by such broker-dealer as a result of market-making activities or other
trading activities. The Company and the Trust have agreed that, starting on the
date on which the Exchange Offer is consummated and ending on the close of
business one year after such date, they will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution."
In that regard, each Exchanging Dealer (as defined herein) who
surrenders Old Capital Securities pursuant to the Exchange Offer will be deemed
to have agreed, by execution of the Letter of Transmittal or by delivery of an
Agent's Message (as defined herein), that, upon receipt of notice from the
Company or the Trust of the occurrence of any event or the discovery of any fact
which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or which causes this Prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in the light of the circumstances
under which they were made, not misleading, or of the occurrence of certain
other events specified in the Registration Rights Agreement, such Exchanging
Dealer will suspend the sale of New Securities pursuant to this Prospectus until
the Company or the Trust has amended or supplemented this Prospectus to correct
such misstatement or omission and has furnished copies of the amended or
supplemented Prospectus to such Exchanging Dealer, or the Company or the Trust
has given notice that the sale of the New Securities may be resumed, as the case
may be.
Prior to the Exchange Offer, there has been only a limited
secondary market and no public market for the Old Capital Securities. The New
Capital Securities will be a new issue of securities for which there currently
is no market. Although Salomon Brothers Inc, Jefferies & Company, Inc. and
Credit Suisse First Boston Corporation, the initial purchasers of the Old
Capital Securities (the "Initial Purchasers") informed the Company and the Trust
in connection with the offering of the Old Capital Securities that they each
intended to make a market in the Old Capital Securities, they are not obligated
to make a market in the Old Capital Securities or the New Capital Securities,
and any such market-making may be discontinued at any time without notice in the
sole discretion of the Initial Purchasers. Accordingly, there can be no
assurance as to the development or liquidity of any market for the New Capital
Securities. The Company and the Trust currently intend to apply for listing of
the New Capital Securities as debt securities on the New York Stock Exchange.
(v)
<PAGE>
(continued from cover page)
Any Old Capital Securities not tendered and accepted in the
Exchange Offer will remain outstanding and will be entitled to all the same
rights and will be subject to the same limitations applicable thereto under the
Declaration (except for those rights which terminate upon consummation of the
Exchange Offer). Following consummation of the Exchange Offer, the holders of
Old Capital Securities will continue to be subject to all of the existing
restrictions upon transfer thereof and neither the Company nor the Trust
will have any further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the Securities Act of
the Old Capital Securities held by them. To the extent that Old Capital
Securities are tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Old Capital Securities could be adversely affected. See "Risk
Factors -- Consequences of a Failure to Exchange Old Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION. HOLDERS OF OLD CAPITAL SECURITIES ARE URGED TO READ THIS
PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING
WHETHER TO TENDER THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Old Capital Securities may be tendered for exchange on or
prior to 5:00 p.m., New York City time, on ___________, 1997 (such time on such
date being hereinafter called the "Expiration Date"), unless the Exchange Offer
is extended by the Company and the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange Offer is
extended). Tenders of Old Capital Securities may be withdrawn at any time on or
prior to the Expiration Date. The Exchange Offer is not conditioned upon any
minimum liquidation amount of Old Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain events and
conditions which may be waived by the Company or the Trust and to the terms and
provisions of the Registration Rights Agreement. Old Capital Securities may be
tendered in whole or in part having a liquidation amount of not less than
$100,000 (100 Old Capital Securities) or any integral multiple of $1,000
liquidation amount (1 Old Capital Security) in excess thereof. The Company has
agreed to pay all expenses of the Exchange Offer, except as otherwise specified
herein. See "The Exchange Offer -- Fees and Expenses." Each New Capital Security
will pay cumulative distributions from the most recent Distribution Payment Date
(as defined herein) on the Old Capital Securities surrendered in exchange for
such New Capital Securities or, if no distributions have been paid on such Old
Capital Securities, from January 21, 1997. Holders of the Old Capital Securities
whose Old Capital Securities are accepted for exchange will not receive
accumulated distributions on such Old Capital Securities for any period from and
after the last Distribution Payment Date on such Old Capital Securities prior to
the original issue date of the New Capital Securities or, if no such
distributions have been paid, will not receive any accumulated distributions on
such Old Capital Securities, and will be deemed to have waived the right to
receive any distributions on such Old Capital Securities accumulated from and
after such Distribution Payment Date or, if no such distribution has been paid
or duly provided for, from and after January 21, 1997. This Prospectus, together
with the Letter of Transmittal, is being sent to all registered holders of Old
Capital Securities as of ________ __, 1997.
Neither the Company nor the Trust will receive any cash
proceeds from the issuance of the New Capital Securities offered hereby. No
dealer-manager is being used in connection with the Exchange Offer. See "Use of
Proceeds" and "Plan of Distribution."
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA
HAS NOT APPROVED OR DISAPPROVED THIS OFFERING, NOR HAS THE COMMISSIONER PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
(vi)
<PAGE>
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" OF ANY SUCH PLAN BY REASON
OF SUCH PLAN'S INVESTMENT IN THE ENTITY (COLLECTIVELY, "PLANS"), AND NO PERSON
INVESTING "PLAN ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES
OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH
PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY
INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
THEREOF THAT IT EITHER (A) IS NOT A PLAN AND IS NOT PURCHASING SUCH SECURITIES
ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN OR (B) IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH
RESPECT TO SUCH PURCHASE OR HOLDING.
(vii)
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, file reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's regional offices in Chicago, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661, and in New York, Seven
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such information may also be accessed electronically by
means of the Commission's home page on the Internet (http://www.sec.gov). In
addition, such reports, proxy statements and other information can be inspected
at The New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005
and The Pacific Stock Exchange, Incorporated, 301 Pine Street, San Francisco,
California 94104 on which certain securities of the Company are listed.
The Company and the Trust have filed with the Commission a
Registration Statement on Form S-4 (together with all amendments and exhibits
thereto, the "Registration Statement") under the Securities Act with respect to
the securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement. Such additional information
may be obtained from the Commission's principal office in Washington, D.C.
No separate financial statements of the Trust have been
included herein. The Company and the Trust do not consider that such financial
statements would be material to holders of the Capital Securities because the
Trust is a newly formed special purpose entity, has no operating history or
independent operations, is not engaged in and does not propose to engage in any
activity other than holding as trust assets the Subordinated Debt Securities and
issuing the Trust Securities. All of the Common Securities of the Trust are
owned by the Company and the Company's obligations described herein under the
Indenture, the Declaration (including its obligations to pay costs, expenses,
debts and other obligations of the Trust, other than with respect to the Trust
Securities), the Subordinated Debt Securities and the Guarantee, taken together,
constitute a full and unconditional guarantee on a subordinated basis by the
Company of amounts due on the Capital Securities. See "The Trust," "Description
of the Capital Securities," "Description of the Subordinated Debt Securities"
and "Description of the Guarantee." In addition, the Company does not expect
that the Trust will file reports under the Exchange Act with the Commission.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 1-5721)
with the Commission are incorporated by reference into this Prospectus:
(i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "Annual Report");
(ii) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996, and September 30, 1996;
and
(iii) the Company's Current Report on Form 8-K dated January 14, 1997.
All documents filed by the Company pursuant to Sections 13(a),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for all purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document that is also incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed to be incorporated
herein by reference, as the same may be amended, supplemented or otherwise
modified from time to time. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein do not purport to
be complete, and where reference is made to the particular provisions of such
contract or other document, such provisions are qualified in all respects by
reference to all of the provisions of such contract or other document.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM
A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF
SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE THAT HAVE
BEEN OR MAY BE INCORPORATED BY REFERENCE HEREIN, OTHER THAN EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE
THEREIN. REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO THE COMPANY AT 315 PARK
AVENUE SOUTH, NEW YORK, NY 10010 (TELEPHONE NUMBER (212) 460-1900), ATTENTION:
CORPORATE SECRETARY. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST SHOULD BE MADE BY __________, 1997.
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SUMMARY
The following summary is qualified in its entirety by the more
detailed information and the financial statements, including the notes thereto,
appearing elsewhere or incorporated by reference herein. Prospective investors
should consider carefully the factors set forth herein under "Risk Factors." As
used in this Prospectus, the "Company" means Leucadia National Corporation and
its subsidiaries, except as the context otherwise may require.
LEUCADIA CAPITAL TRUST I
The Trust is a statutory business trust created under Delaware
law pursuant to (i) a declaration of trust, dated as of January 10, 1997 (the
"Initial Declaration"), and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on January 10, 1997. The Trust's business and
affairs are conducted by its trustees: initially, The Chase Manhattan Bank, as
Institutional Trustee (as defined herein), and Chase Manhattan Bank Delaware, as
Delaware Trustee (as defined herein). The Trust exists for the exclusive
purposes of (i) issuing the Trust Securities, (ii) investing the gross proceeds
from the sale of the Common Securities and Capital Securities to acquire the
Subordinated Debt Securities, and (iii) engaging in only those other activities
necessary or incidental thereto, including engaging in the Exchange Offer.
Accordingly, the Subordinated Debt Securities are the sole asset of the Trust,
and payments under the Subordinated Debt Securities will be the sole revenue of
the Trust. All of the Common Securities are owned by the Company. The principal
place of business of the Trust is c/o Leucadia National Corporation, 315 Park
Avenue South, New York, New York 10010 (telephone number (212) 460-1900).
LEUCADIA NATIONAL CORPORATION
The Company is a diversified financial services holding
company principally engaged in personal and commercial lines of property and
casualty insurance, life and health insurance, banking and lending and
manufacturing. The Company concentrates on return on investment and cash flow to
build long-term shareholder value, rather than emphasizing volume or market
share. Additionally, the Company continuously evaluates the retention and
disposition of its existing operations and investigates possible acquisitions of
new businesses in order to maximize shareholder value.
The principal executive offices of the Company are located at
315 Park Avenue South, New York, New York 10010 (telephone number (212)
460-1900).
THE EXCHANGE OFFER
The Exchange Offer.................... Up to $150,000,000 aggregate
liquidation amount of New Capital
Securities are being offered in
exchange for a like aggregate
liquidation amount of Old Capital
Securities. Old Capital Securities may
be tendered for exchange in whole or in
part in a liquidation amount of
$100,000 (100 Old Capital Securities)
or any integral multiple of $1,000 in
excess thereof provided that if any Old
Capital Securities are tendered in
exchange for part, the untendered
liquidation amount must be $100,000 or
any integral multiple of $1,000 in
excess thereof. The Company and the
Trust are making the Exchange Offer in
order to satisfy their obligations
under the Registration Rights
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Agreement relating to the Old Capital
Securities. For a description of the
procedures for tendering Old Capital
Securities, see "The Exchange Offer --
Procedures for Tendering Old Capital
Securities."
Expiration Date....................... The Expiration Date of the Exchange
Offer will be 5:00 p.m., New York City
time, on ___________, 1997, unless the
Exchange Offer is extended by the
Company and the Trust. See "The
Exchange Offer -- Expiration Date;
Extensions; Amendments."
Conditions to
Exchange Offer........................ The Exchange Offer is subject to
certain conditions, which may be waived
by the Company and the Trust in their
sole discretion. The Exchange Offer is
not conditioned upon any minimum
liquidation amount of Old Capital
Securities being tendered. See "The
Exchange Offer -- Conditions to
Exchange Offer."
The Company and the Trust reserve the
right in their sole discretion, subject
to applicable law, at any time and from
time to time, (i) to delay the
acceptance of the Old Capital
Securities for exchange, (ii) to
terminate the Exchange Offer if certain
specified conditions have not been
satisfied, (iii) to extend the
Expiration Date of the Exchange Offer
and retain all Old Capital Securities
tendered pursuant to the Exchange
Offer, subject, however, to the right
of holders of Old Capital Securities to
withdraw their tendered Old Capital
Securities, or (iv) to waive any
condition or otherwise amend the terms
of the Exchange Offer in any respect.
See "The Exchange Offer -- Expiration
Date; Extensions; Amendments."
Withdrawal Rights..................... Tenders of Old Capital Securities may
be withdrawn at any time on or prior to
the Expiration Date by delivering a
written notice of such withdrawal to
The Chase Manhattan Bank, as Exchange
Agent (the "Exchange Agent"), in
conformity with certain procedures set
forth below under "The Exchange Offer
-- Withdrawal Rights."
Procedures for Tendering
Old Capital Securities................ Tendering holders of Old Capital
Securities must complete and sign a
Letter of Transmittal in accordance
with the instructions contained therein
and forward the same by mail, facsimile
or hand delivery, together with any
other required documents, to the
Exchange Agent, either with the Old
Capital Securities to be tendered or in
compliance with the specified
procedures for guaranteed delivery of
Old Capital Securities. Certain
brokers, dealers, commercial banks,
trust companies and other nominees
5
<PAGE>
may also effect tenders by book-entry
transfer, including an Agent's Message
in lieu of the Letter of Transmittal.
Holders of Old Capital Securities
registered in the name of a broker,
dealer, commercial bank, trust company
or other nominee are urged to contact
such person promptly if they wish to
tender Old Capital Securities pursuant
to the Exchange Offer. See "The
Exchange Offer -- Procedures for
Tendering Old Capital Securities."
Letters of Transmittal and certificates
representing Old Capital Securities
should not be sent to the Company or
the Trust. Such documents should only
be sent to the Exchange Agent.
Questions regarding how to tender and
requests for information should be
directed to the Exchange Agent. See
"The Exchange Offer -- Exchange Agent."
Resales of New
Capital Securities.................... Based on interpretations by the staff
of the Commission as set forth in
no-action letters issued to third
parties, the Company and the Trust
believe that the New Securities issued
pursuant to the Exchange Offer may be
offered for resale, resold or otherwise
transferred by holders thereof (other
than any holder that is an "affiliate"
of the Company or the Trust as defined
under Rule 405 of the Securities Act)
without compliance with the
registration and prospectus delivery
provisions of the Securities Act;
provided that such New Securities are
acquired in the ordinary course of such
holders' business and such holders are
not engaged in, and do not intend to
engage in, a distribution of such New
Securities and have no arrangement or
understanding with any person to
participate in the distribution of such
New Securities. However, the staff of
the Commission has not considered the
Exchange Offer in the context of a no-
action letter, and there can be no
assurance that the staff of the
Commission would make a similar
determination with respect to the
Exchange Offer as in such other
circumstances. By tendering the Old
Capital Securities in exchange for New
Capital Securities, each holder, other
than a broker-dealer, will represent to
the Company and the Trust that: (i) it
is not an affiliate of the Company or
the Trust (as defined under Rule 405 of
the Securities Act); (ii) any New
Capital Securities to be received by it
were acquired in the course of its
ordinary business; and (iii) it is not
engaged in, and does not intend to
engage in, a distribution of the New
Capital Securities and has no
arrangement or understanding with any
person to participate in a distribution
(within the meaning of the Securities
Act) of the New Capital Securities.
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<PAGE>
Each broker-dealer that receives New
Capital Securities for its own account
pursuant to the Exchange Offer must
acknowledge that it will deliver a
prospectus in connection with any
resale of such New Capital Securities.
The Letter of Transmittal states that
by so acknowledging and by delivering a
prospectus, a broker-dealer will not be
deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. This Prospectus, as it
may be amended or supplemented from
time to time, may be used by a
broker-dealer in connection with
resales of New Capital Securities
received in exchange for Old Capital
Securities where such Old Capital
Securities were acquired by such
broker-dealer as a result of
market-making activities or other
trading activities. The Company and the
Trust have agreed that, starting on the
date on which the Exchange Offer is
consummated and ending on the close of
business one year after such date, they
will make this Prospectus available to
any broker-dealer for use in connection
with any such resale. See "Plan of
Distribution."
In that regard, each Exchanging Dealer
who surrenders Old Capital Securities
pursuant to the Exchange Offer will be
deemed to have agreed, by execution of
the Letter of Transmittal or delivery
of an Agent's Message, that, upon
receipt of notice from the Company or
the Trust of the occurrence of any
event or the discovery of any fact
which makes any statement contained or
incorporated by reference in this
Prospectus untrue in any material
respect or which causes this Prospectus
to omit to state a material fact
necessary in order to make the
statements contained or incorporated by
reference herein, in the light of the
circumstances under which they were
made, not misleading, or of the
occurrence of certain other events
specified in the Registration Rights
Agreement, such Exchanging Dealer will
suspend the sale of New Securities
pursuant to this Prospectus until the
Company or the Trust has amended or
supplemented this Prospectus to correct
such misstatement or omission and has
furnished copies of the amended or
supplemented Prospectus to such
Exchanging Dealer, or the Company or
the Trust has given notice that the
sale of the New Securities may be
resumed, as the case may be.
Exchange Agent........................ The Exchange Agent is The Chase
Manhattan Bank. The address and
telephone and facsimile numbers of the
Exchange Agent are set forth under "The
Exchange Offer -- Exchange Agent" and
in the Letter of Transmittal.
Use of Proceeds....................... Neither the Company nor the Trust will
receive any cash proceeds from the
issuance of the New Capital Securities
offered hereby. See "Use of Proceeds."
7
<PAGE>
Certain Federal Income
Tax Consequences; ERISA
Considerations........................ Holders of Old Capital Securities
should review the information set forth
under "Certain Fderal Income Tax
Consequences" and "Certain ERISA
Considerations" prior to tendering Old
Capital Securities in the Echange
Offer.
THE CAPITAL SECURITIES
The Exchange Offer applies to the Old Securities. The terms of the New
Securities are identical in all material respects to the respective terms of the
Old Securities, except that (i) the New Securities have been registered under
the Securities Act and therefore will not be subject to certain restrictions on
transfer applicable to the Old Securities, (ii) the New Capital Securities will
not provide for any increase in the distribution rate thereon, and (iii) the New
Subordinated Debt Securities will not provide for any increase in the interest
rate thereon. In the event that the Exchange Offer is consummated, any Old
Capital Securities which remain outstanding after consummation of the Exchange
Offer and the New Capital Securities issued in the Exchange Offer will vote
together as a single class for purposes of determining whether holders of the
requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the Declaration.
Securities Offered................... $150,000,000 aggregate liquidation
amount of the Capital Securities
(liquidation amount $1,000 per Capital
Security).
General.............................. The Capital Securities represent
undivided beneficial interests in the
Trust's assets, which consist solely of
the Subordinated Debt Securities. The
Subordinated Debt Securities, in which
the proceeds of the Trust Securities
are invested, mature on January 15,
2027, unless the Subordinated Debt
Securities are redeemed by the Company
prior to such maturity as described
under "Description of the Capital
Securities-Redemption" and "Description
of the Capital Securities-Tax Event
Redemption."
Distributions........................ The distributions payable on the
Capital Securities are fixed at a rate
per annum of 8.65% of the stated
liquidation amount of $1,000 per
Capital Security and will be
cumulative, will accrue from January
21, 1997, the date of original issuance
of the Old Capital Securities, and
(subject to the extensions of
distribution payment periods described
below) are payable semiannually, in
arrears, on January 15 and July 15 of
each year, commencing July 15, 1997.
See "Description of the Capital
Securities-Distributions."
Option to Extend Interest
Payment Period....................... The Company has the right, at any time,
subject to certain conditions, to defer
payments of interest on the
Subordinated Debt Securities for
Extension Periods, each not exceeding
10 consecutive semiannual periods;
provided that no Extension Period may
extend beyond the maturity date of the
Subordinated Debt Securities. As a
consequence of the Company's extension
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<PAGE>
of the interest payment period on the
Subordinated Debt Securities,
distributions on the Capital Securities
would be deferred (though such
distributions would continue to accrue
interest at a rate of 8.65% per annum
compounded semiannually (to the extent
permitted by law)). In the event the
Company exercises its right to extend
an interest payment period, then during
any Extension Period, subject to
certain exceptions, (i) the Company
shall not declare or pay any dividend
on, make any distributions with respect
to, or redeem, purchase, acquire or
make a liquidation payment with respect
to, any of its capital stock or rights
to acquire such capital stock or make
any guarantee payments with respect to
any guarantee by the Company of the
debt securities of any subsidiary of
the Company if such guarantee ranks
pari passu with or junior in interest
to the Subordinated Debt Securities
(other than payments on the Guarantee
and the Common Securities Guarantee (as
defined herein)) and (ii) the Company
shall not make any payment of interest
on or principal of (or premium, if any,
on), or repay, repurchase or redeem,
any debt securities issued by the
Company which rank pari passu with or
junior to the Subordinated Debt
Securities. Upon the termination of any
Extension Period and the payment of all
amounts then due, the Company may
commence a new Extension Period,
subject to certain requirements. See
"Description of the Subordinated Debt
Securities -- Option to Extend Interest
Payment Period." Should an Extension
Period occur with respect to the
Capital Securities, holders of the
Capital Securities will continue to
recognize interest income for United
States federal income tax purposes,
notwithstanding the deferred receipt of
payments which accrue during the
Extension Period. As a result, such
holders will be required to include
such income in gross income for United
States federal income tax purposes in
advance of the receipt of cash, and
such holders will not receive the cash
from the Trust related to such income
if such holders dispose of the Capital
Securities prior to the record date for
payment of distributions. See "Certain
Federal Income Tax Consequences -- US
Holders -- Original Issue Discount."
Liquidation.......................... The Company, as the holder of all of
the Common Securities, has the right at
any time to dissolve and liquidate the
Trust (including, without limitation,
upon the occurrence of a Tax Event)
with the result that, after
satisfaction of liabilities to
creditors of the Trust (to the extent
not satisfied by the Company), the
Subordinated Debt Securities would be
distributed to the holders of the Trust
Securities on a pro rata basis in
accordance with the respective stated
liquidation amounts thereof, in
liquidation of the Trust. In addition,
the Trust will be dissolved and
liquidated under certain other
9
<PAGE>
circumstances. See "Description of the
Capital Securities -- Liquidation
Distribution upon Dissolution."
Liquidation Amount.................... In the event of the dissolution of the
Trust, after satisfaction of
liabilities to creditors of the Trust
(to the extent not satisfied by the
Company) holders of the Capital
Securities issued by the Trust will be
entitled to receive $1,000 per Capital
Security plus an amount equal to
accrued and unpaid distributions
thereon to the date of payment, unless
the Subordinated Debt Securities are
distributed to holders of Trust
Securities in exchange therefor. If
such liquidation distribution can be
paid only in part because the Trust has
insufficient assets available to pay in
full the aggregate liquidation
distribution, then the amounts payable
directly by the Trust on the Capital
Securities shall be paid on a pro rata
basis. The holders of the Common
Securities will be entitled to receive
distributions upon any such liquidation
pro rata with the holders of the
Capital Securities, except that if a
Declaration Event of Default has
occurred and is continuing, the Capital
Securities shall have a priority over
the Common Securities. See "Description
of the Capital Securities --
Liquidation Distribution Upon
Dissolution."
Maturity.............................. Upon the repayment of the Subordinated
Debt Securities at maturity, the
proceeds from such repayment will be
applied by the Institutional Trustee to
redeem a like amount of Trust
Securities, upon the terms and
conditions described herein. See
"Description of the Capital Securities
-- Redemption."
Optional Redemption................... The Company has the right to redeem the
Subordinated Debt Securities on or
after January 15, 2007, in whole or in
part, at any time from time to time,
subject to the conditions described in
"Description of the Subordinated Debt
Securities -- Redemption," at the Call
Prices described herein, together with
accrued and unpaid interest to the date
of redemption. Upon the redemption of
the Subordinated Debt Securities, the
proceeds of such redemption will be
applied by the Institutional Trustee to
redeem a like amount of the Trust
Securities pro rata at the applicable
Redemption Price, upon the terms and
conditions described herein. See
"Description of the Capital Securities
-- Redemption."
Tax Event Redemption.................. If at any time a Tax Event should occur
and would continue despite dissolution
of the Trust and distribution of the
Subordinated Debt Securities to the
holders of the Trust Securities, the
Company may, within 90 days of the
occurrence of such Tax Event, redeem
the Subordinated Debt Securities in
whole or in part in certain limited
circumstances at a redemption price
equal to the aggregate of the principal
amount
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<PAGE>
to be redeemed plus any accrued and
unpaid interest to the redemption date.
See "Description of the Capital
Securities --Tax Event Redemption."
Upon the redemption of the Subordinated
Debt Securities, the proceeds of such
redemption will be applied by the
Institutional Trustee to redeem a like
amount of the Trust Securities pro rata
at the applicable Redemption Price,
upon the terms and conditions described
herein. See "Description of the Capital
Securities --Redemption."
The Guarantee......................... The payment of distributions out of
moneys held by the Trust, payments on
liquidation of the Trust and payment
upon the redemption of Capital
Securities, in each case, if required
under the Declaration, are guaranteed
by the Company as described herein
under "Description of the Guarantee."
The Guarantee covers payments of
distributions and other payments on the
Capital Securities only if and to the
extent that the Trust has funds
available therefor, which funds will
not be available except to the extent
the Company has made payments of
interest or principal (or premium, if
any) or other payments on the
Subordinated Debt Securities. The
Guarantee, when taken together with the
Company's obligations under the
Subordinated Debt Securities, the
Declaration and the Indenture
(including its obligations to pay
costs, expenses, debts and other
obligations of the Trust (other than
with respect to the Trust Securities)),
provides a full and unconditional
guarantee on a subordinated basis by
the Company of amounts due on the
Capital Securities. The Company has
also agreed separately to guarantee the
obligations of the Trust with respect
to the Common Securities as described
herein under "Description of the
Guarantee -- General."
Ranking............................... The Common Securities rank pari passu
with, and payments thereon will be made
pro rata with, the Capital Securities,
except that upon the occurrence and
during the continuance of a Declaration
Event of Default, the rights of the
holders of the Common Securities to
receive payment of periodic
distributions and payments upon
liquidation, redemption or otherwise
will be subordinated to the rights of
the holders of the Capital Securities.
See "Description of the Capital
Securities -- General." The
Subordinated Debt Securities are
unsecured and subordinate and junior in
right of payment to the extent and in
the manner set forth in the Indenture
to all Senior Indebtedness of the
Company. See "Description of the
Subordinated Debt Securities." The
Guarantee constitutes an unsecured
obligation of the Company and ranks
subordinate and junior in right of
payment to the extent and in the manner
set forth in the Guarantee to all
Senior Indebtedness of the Company. The
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<PAGE>
Company's obligations under the
Guarantee and the Subordinated Debt
Securities are also effectively
subordinate to claims of creditors of
the Company's subsidiaries. See
"Description of the Guarantee."
Voting Rights......................... Holders of the Capital Securities will
have limited voting rights relating
generally to the modification of the
Capital Securities and the Guarantee
and the exercise of the Trust's rights
as the holder of the Subordinated Debt
Securities. Holders of the Capital
Securities will not be entitled to
appoint, remove or replace the
Institutional Trustee or the Delaware
Trustee except upon the occurrence of
certain events described herein. See
"Description of the Capital Securities
-- Voting Rights" and " -- Removal of
Trustees; Appointment of Successors."
Absence of Market
for the New Capital
Securities............................ The New Capital Securities will be a
new issue of securities for which there
is currently no market. Although the
Initial Purchasers informed the Company
and the Trust in connection with the
offering of the Old Capital Securities
that they each intended to make a
market in the Old Capital Securities,
they are not obligated to make a market
in the Old Capital Securities or the
New Capital Securities, and any such
market-making may be discontinued at
any time without notice. Accordingly,
there can be no assurance as to the
development or liquidity of any market
for the New Capital Securities. The
Company and the Trust intend to apply
for listing of the New Capital
Securities as debt securities on the
New York Stock Exchange.
Trading Price......................... The Capital Securities are expected to
trade in the secondary market at a
price per Capital Security plus accrued
and unpaid distributions, if any, to
the date of settlement. Because the
Capital Securities pay distributions at
a fixed rate based on the fixed
interest rate payable on the
Subordinated Debt Securities, the
trading price on the Capital Securities
may decline if interest rates rise.
Transfer.............................. The Old Capital Securities have been
issued, and may be transferred, only in
blocks having a Liquidation Amount of
not less than $100,000 (100 Old Capital
Securities). Any transfer, sale or
other disposition of Old Capital
Securities resulting in a block having
a Liquidation Amount of less than
$100,000 shall be deemed to be void and
of no legal effect whatsoever. The New
Capital Securities will not be so
restricted.
For additional information with respect to the Capital Securities,
see "Description of the Capital Securities," "Description of the Subordinated
Debt Securities," "Description of the Guarantee" and "Certain Federal Income
Tax Consequences."
12
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the matters set
forth under "Risk Factors."
13
<PAGE>
RISK FACTORS
Holders of the Old Capital Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters prior to tendering Old Capital Securities in the
Exchange Offer.
ABSENCE OF PUBLIC TRADING MARKET; TRANSFER RESTRICTIONS
There is no existing trading market for the Capital Securities
and there can be no assurance as to the liquidity of any such market that may
develop, the ability of the holders of the Capital Securities to sell such
securities or whether a trading market, if it develops, will continue to exist.
If such a market were to exist, the Capital Securities could trade at prices
higher or lower than their liquidation amounts, depending on many factors,
including prevailing interest rates, the market for similar securities and the
operating results of the Company. In the event that the Subordinated Debt
Securities are distributed by the Trust to the holders of the Capital
Securities, the preceding considerations would be equally applicable to the
Subordinated Debt Securities. The Company and the Trust were advised by the
Initial Purchasers in connection with the offering of the Old Capital Securities
that they intended to make a market in the Old Capital Securities. However, the
Initial Purchasers are not obligated to make a market in the Old Capital
Securities or the New Capital Securities and any such market-making activity may
be discontinued at any time without notice in the sole discretion of the Initial
Purchasers. In addition, such market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. The Old Capital Securities have not been registered
under the Securities Act, and are subject to significant restrictions on resale
(including a prohibition on transfers resulting in blocks having a stated
liquidation amount of less than $100,000 (100 Old Capital Securities)).
Notwithstanding the registration of the New Capital Securities in the Exchange
Offer, holders who are "affiliates" of the Company or the Trust as defined under
Rule 405 of the Securities Act may publicly offer for sale or resell the New
Capital Securities only in compliance with the provisions of Rule 144 under the
Securities Act. Each tendering holder of the Old Capital Securities will be
deemed to have made certain acknowledgments, representations and agreements. In
addition, each broker-dealer that receives New Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Capital Securities. See
"Plan of Distribution."
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE
AND THE SUBORDINATED DEBT SECURITIES
The obligations of the Company under the Guarantee and the
Subordinated Debt Securities are subordinate and junior in right of payment to
all present and future Senior Indebtedness of the Company. No payment of
principal of (including redemption payments, if any) or premium, if any, or
interest on the Subordinated Debt Securities may be made if (i) any Senior
Indebtedness of the Company is not paid when due and any applicable grace period
with respect to such default has ended with such default not having been cured
or waived or ceasing to exist or (ii) the maturity of any Senior Indebtedness of
the Company has been accelerated because of a default. The Subordinated Debt
Securities and the Guarantee also are effectively subordinated to all existing
and future indebtedness, liabilities and obligations, including trade payables
and Deposits, of the Company's subsidiaries, except to the extent that the
Company is a creditor of the subsidiaries and is recognized as such. At
September 30, 1996, the aggregate amount of Senior Indebtedness and liabilities
and obligations of the Company's subsidiaries that would be effectively ranked
senior to the Guarantee and the Subordinated Debt Securities was approximately
$3,805,301,000, exclusive of Deposits. At September 30, 1996, after giving
effect to the issuance in October 1996 of the Company's 7 7/8% Notes and the
related repurchase of certain of the Company's 10 3/8% Notes, the aggregate
amount of the Senior Indebtedness and liabilities and obligations of the
Company's subsidiaries that would be effectively ranked senior to the Guarantee
and the Subordinated Debt Securities was approximately $3,837,391,000, exclusive
of Deposits. See
14
<PAGE>
"Capitalization." There are no terms in the Capital Securities, the Subordinated
Debt Securities or the Guarantee that limit the ability of the Company or its
subsidiaries to incur additional indebtedness, liabilities and obligations
including such indebtedness that ranks senior to the Subordinated Debt
Securities and the Guarantee. See "Description of the Guarantee -- Status of the
Guarantee" and "Description of the Subordinated Debt Securities."
GUARANTEE COVERS DISTRIBUTIONS AND OTHER PAYMENTS ONLY TO THE EXTENT
THE TRUST HAS AVAILABLE FUNDS; RELATED REMEDIES
The terms of the Guarantee are those set forth in the Guarantee
and those made part of the Guarantee by the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), under which The Chase Manhattan Bank is
acting as trustee (the "Guarantee Trustee"). The New Guarantee has been
qualified under the Trust Indenture Act. The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Capital Securities.
The Guarantee guarantees to the holders of the Capital Securities
the following payments, to the extent not paid by the Trust: (i) any accrued and
unpaid distributions required to be paid on the Capital Securities, to the
extent the Trust has funds available therefor, (ii) the Redemption Price, to the
extent the Trust has funds available therefor, with respect to the Capital
Securities called for redemption by the Trust, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Trust (other than in
connection with the distribution of Subordinated Debt Securities to the holders
of the Capital Securities in exchange therefor), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on the
Capital Securities to the date of the payment, to the extent the Trust has funds
available therefor and (b) the amount of assets of the Trust remaining available
for distribution to holders of the Capital Securities in liquidation of the
Trust. The Guarantee is subordinated as described under "-- Ranking of
Subordinate Obligations Under the Guarantee and the Subordinated Debt
Securities." The holders of a majority in liquidation amount of the Capital
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under the
Guarantee. A holder of record of the Capital Securities may institute a legal
proceeding directly against the Company to enforce the Guarantee Trustee's
rights without first instituting any legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity. If the Company were to default
on its obligation to pay amounts payable on the Subordinated Debt Securities,
the Trust would lack available funds for the payment of distributions or amounts
payable on redemption of the Capital Securities or otherwise, and, in such
event, holders of the Capital Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, each holder of the Capital
Securities would rely on the enforcement (i) by the Institutional Trustee of its
rights as registered holder of the Subordinated Debt Securities against the
Company pursuant to the terms of the Subordinated Debt Securities or (ii) by
such holder of the Capital Securities of its right against the Company to
enforce payments of principal (and premium, if any) and interest on the
Subordinated Debt Securities having an aggregate principal amount equal to the
aggregate liquidation amount of the Capital Securities of such holder as
described below under "-- Enforcement of Certain Rights By Holders of Capital
Securities." See "Description of the Capital Securities," "Description of the
Guarantee" and "Description of the Subordinated Debt Securities." The
Declaration provides that each holder of the Capital Securities, by acceptance
thereof, agrees to the provisions of the Guarantee, including the subordination
provisions thereof, and the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If a Declaration Event of Default with respect to the Trust
occurs and is continuing, then the holders of the Capital Securities would,
except as provided below, rely on the enforcement by the Institutional
15
<PAGE>
Trustee of its rights as holder of the Subordinated Debt Securities against the
Company. The holders of a majority in liquidation amount of the Capital
Securities will have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee
with respect to the Capital Securities or to direct the exercise of any trust or
power conferred upon the Institutional Trustee under the Declaration, including
the right to direct the Institutional Trustee to exercise the remedies available
to it as holder of the Subordinated Debt Securities. If the Institutional
Trustee fails to enforce its rights under the Subordinated Debt Securities after
the holders of a majority in liquidation amount of the Capital Securities have
so directed such Institutional Trustee, a holder of record of the Capital
Securities may, to the fullest extent permitted by law, institute a legal
proceeding directly against the Company to enforce the rights of the
Institutional Trustee under the Subordinated Debt Securities, without first
instituting any legal proceeding against such Institutional Trustee or any other
person.
Notwithstanding the foregoing, if a Declaration Event of Default
has occurred and is continuing and such event is attributable to the failure of
the Company to pay interest or principal (or premium, if any) on the
Subordinated Debt Securities on the respective dates such interest or principal
(or premium, if any) is payable, after giving effect to any Extension Period (or
in the case of redemption, on the redemption date), then a holder of record of
the Capital Securities may institute directly against the Company a proceeding
for enforcement of payment, on or after the respective due dates specified in
the Subordinated Debt Securities, to such holder directly of the principal of
(or premium, if any) or interest on the Subordinated Debt Securities having an
aggregate principal amount equal to the aggregate liquidation amount of the
Capital Securities of such holder (a "Direct Action"). In connection with such
Direct Action, the Company will be subrogated to the rights of such holder of
the Capital Securities under the Declaration to the extent of any payment made
by the Company to such holder of the Capital Securities in such Direct Action;
provided, however, that no such subrogation right may be exercised so long as a
Declaration Event of Default has occurred and is continuing. The holders of the
Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debt Securities. See "Description
of the Capital Securities -- Declaration Events of Default."
OPTION TO EXTEND INTEREST PAYMENT PERIOD FOR UP TO FIVE YEARS AND CONSEQUENT
DEFERRAL OF DISTRIBUTIONS ON CAPITAL SECURITIES
The Company has the right under the Indenture to defer payments
of interest on the Subordinated Debt Securities by extending the interest
payment period, at any time and from time to time, subject to certain
conditions, for Extension Periods, each not exceeding 10 consecutive semiannual
periods, provided that no Extension Period may extend beyond the stated maturity
of the Subordinated Debt Securities. During each such Extension Period,
semiannual distributions on the Capital Securities would also be deferred (but
would continue to accrue, despite such deferral, with interest thereon
compounded semiannually (to the fullest extent permitted by law)) by the Trust.
In the event that the Company exercises this right to defer interest payments on
the Subordinated Debt Securities, and such deferral is continuing, or if there
shall have occurred and be continuing any event of default under the Indenture
or if the Company shall be in default with respect to the payment of its
obligations under the Guarantee, (a) the Company shall not declare or pay
dividends on, or make a distribution with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock or rights to acquire such capital stock (other than (i) purchases
or acquisitions of shares of any such capital stock or rights to acquire such
capital stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or any other contractual
obligations of the Company (other than a contractual obligation ranking pari
passu with or junior to the Subordinated Debt Securities), (ii) as a result of a
reclassification of the Company's capital stock or rights to acquire such
capital stock or the exchange or conversion of one class or series of capital
stock of the Company or rights to acquire such capital stock for another class
or series of the Company's capital stock or
16
<PAGE>
rights to acquire such capital stock, (iii) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) dividends and distributions made on the Company's capital stock or rights
to acquire such capital stock with the Company's capital stock or rights to
acquire such capital stock or (v) any declaration of a dividend in connection
with the implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto), or make guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu with or junior to the Subordinated Debt
Securities (other than payments under the Guarantee and the Common Securities
Guarantee) and (b) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company that rank pari passu with or junior to the Subordinated Debt
Securities. Prior to the termination of any such Extension Period, the Company
may further extend the interest payment period, provided that each such
Extension Period, together with all such previous and further extensions
thereof, may not exceed 10 consecutive semiannual periods or extend beyond the
maturity of the Subordinated Debt Securities. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the terms set forth herein. See
"Description of the Capital Securities" and "Description of the Subordinated
Debt Securities."
During each Extension Period, if any, each holder of Capital
Securities will continue to accrue income (as original issue discount ("OID"))
in respect of the deferred interest allocable to its Capital Securities for
United States federal income tax purposes. In such event, each holder of the
Capital Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash, and will not receive cash related to
such income from the Trust if such holder disposes of its Capital Securities
prior to the record date for payment of such deferred interest. See "Certain
Federal Income Tax Consequences."
The Company has no current intention of exercising its right to
defer payments of interest on the Subordinated Debt Securities. However, should
the Company determine to exercise such right in the future, the market price of
the Capital Securities is likely to be affected. A holder that disposes of its
Capital Securities during an Extension Period, therefore, might not receive the
same return on its investment as a holder that continues to hold its Capital
Securities. In addition, as a result of the existence of the Company's right to
defer interest payments, the market price of the Capital Securities (which
represent undivided beneficial interests in the Subordinated Debt Securities)
may be more volatile than the market price of other similar securities where the
issuer does not have such right to defer interest payments.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed certain tax law
changes that would, among other things, generally characterize as stock, and
deny corporate issuers a deduction for interest in respect of, certain debt
obligations issued on or after December 7, 1995 (the "Proposed Legislation") if
such debt obligations have a maximum term in excess of twenty years and are not
shown as indebtedness on the issuer's applicable consolidated balance sheet. On
March 29, 1996, Senate Finance Committee Chairman William V. Roth, Jr. and House
Ways and Means Committee Chairman Bill Archer issued a joint statement (the
"Joint Statement") indicating their intent that certain legislative proposals
initiated by the Clinton administration, including the Proposed Legislation,
that may be adopted by either of the tax-writing committees of Congress would
have an effective date that is no earlier than the date of "appropriate
Congressional action." In addition, subsequent to the publication of the Joint
Statement, Senator Daniel Patrick Moynihan and Representatives Sam M. Gibbons
and Charles B. Rangel wrote letters to Treasury Department officials concurring
with the views expressed in the Joint Statement. Under current law, the Company
will be able to deduct interest on the Subordinated Debt Securities and, based
upon the Joint Statement, it is expected that if the Proposed Legislation were
to be enacted, such legislation
17
<PAGE>
would not apply retroactively to the Subordinated Debt Securities. However, if
the Proposed Legislation is enacted with retroactive effect with respect to the
Subordinated Debt Securities, the Company would not be entitled to an interest
deduction with respect to the Subordinated Debt Securities. There can be no
assurance, however, that the effective date guidance contained in the Joint
Statement will be incorporated into the Proposed Legislation, if enacted, or
that other legislation enacted after the date hereof will not otherwise
adversely affect the ability of the Company to deduct the interest payable on
the Subordinated Debt Securities. Accordingly, there can be no assurance that a
Tax Event will not occur. See "-- Redemption; Distribution" and "Description of
the Subordinated Debt Securities -- Proposed Tax Legislation."
REDEMPTION; DISTRIBUTION
The Company, as the holder of all of the outstanding Common
Securities, has the right at any time (including, without limitation, upon the
occurrence of a Tax Event) to dissolve the Trust, and, after satisfaction of
liabilities to creditors of the Trust (to the extent not paid by the Company),
cause the Subordinated Debt Securities to be distributed to the holders of the
Trust Securities on a pro rata basis in accordance with the respective
liquidation amounts thereof, in liquidation of the Trust. See "Description of
the Capital Securities -- Liquidation Distribution Upon Dissolution." Upon the
occurrence of a Tax Event, in certain circumstances described herein, the
Company will have the right to redeem the Subordinated Debt Securities, in whole
or in part, in which event the Trust will redeem the Trust Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debt Securities redeemed by the Company on a pro rata basis. See
"Description of the Capital Securities -- Tax Event Redemption" and
"--Liquidation Distribution Upon Dissolution."
Under current United States federal income tax law, a
distribution of the Subordinated Debt Securities upon the dissolution of the
Trust generally would not be a taxable event to holders of the Capital
Securities. However, a dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders. See "Certain
Federal Income Tax Consequences -- US Holders -- Receipt of Subordinated Debt
Securities or Cash Upon Liquidation of the Trust."
There can be no assurance as to the market prices for the Capital
Securities or the Subordinated Debt Securities that may be distributed in
exchange for the Capital Securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the Capital Securities that an investor may
purchase, whether in the secondary market or otherwise, or the Subordinated Debt
Securities that a holder of the Capital Securities may receive on dissolution
and liquidation of the Trust, may trade at a discount to the price paid to
purchase the Capital Securities. Because the ability of the Trust to pay amounts
due on the Capital Securities is wholly dependent upon the Company's making
payments on the Subordinated Debt Securities as and when required, and because
holders of the Capital Securities may receive the Subordinated Debt Securities
upon dissolution and liquidation of the Trust, purchasers of the Capital
Securities are also making an investment decision with regard to the
Subordinated Debt Securities and should carefully review all the information
regarding the Subordinated Debt Securities contained herein and evaluate the
credit risk of the Company. See "Description of the Capital Securities" and
"Description of the Subordinated Debt Securities."
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Indenture does not contain any provisions that afford holders
of the Subordinated Debt Securities protection in the event of a highly
leveraged transaction, including a change of control, or other similar
transactions involving the Company that may adversely affect such holders. See
"Description of the Subordinated Debt Securities."
18
<PAGE>
LIMITED VOTING RIGHTS
Holders of the Capital Securities will have limited voting
rights relating generally to the modification of the Capital Securities and the
Guarantee and the exercise of the Trust's rights as the holder of the
Subordinated Debt Securities. Holders of the Capital Securities will not be
entitled to appoint, remove or replace the Institutional Trustee or the Delaware
Trustee except upon the occurrence of certain events described herein. The
Institutional Trustee and the holders of a majority of the Common Securities may
amend the Declaration without the consent of the holders of the Capital
Securities to ensure that the Trust will be classified for United States federal
income tax purposes as a grantor trust and will not be required to register as
an "investment company" under the 1940 Act (as defined herein) even if such
action adversely affects the interests of such holders. See "Description of the
Capital Securities -- Voting Rights" and "-- Removal of Trustees; Appointment of
Successors."
TRADING PRICE
Because the Capital Securities pay distributions at a fixed rate
based upon the fixed interest rate payable on the Subordinated Debt Securities,
the trading price of the Capital Securities may decline if interest rates rise.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD CAPITAL SECURITIES
The Old Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions. Old
Capital Securities which remain outstanding after consummation of the Exchange
Offer will continue to bear a legend reflecting such restrictions on transfer.
In addition, upon consummation of the Exchange Offer, holders of Old Capital
Securities which remain outstanding will not be entitled to any rights to have
such Old Capital Securities registered under the Securities Act or to any
similar rights under the Registration Rights Agreement (subject to certain
limited exceptions). The Company and the Trust do not intend to register
under the Securities Act any Old Capital Securities which remain outstanding
after consummation of the Exchange Offer (subject to such limited exceptions, if
applicable).
To the extent that Old Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Old
Capital Securities could be adversely affected. In addition, any trading market
for Old Capital Securities which remain outstanding after the Exchange Offer
could be adversely affected.
The New Capital Securities and any Old Capital Securities which
remain outstanding after consummation of the Exchange Offer will constitute a
single series of Capital Securities under the Declaration and, accordingly, will
vote together as a single class for purposes of determining whether holders of
the requisite percentage in outstanding liquidation amount thereof have taken
certain actions or exercised certain rights under the Declaration. See
"Description of New Securities -- Description of Capital Securities --General."
The Old Capital Securities provide that, if the Exchange Offer is
not consummated by August 19, 1997 (subject to extension in certain
circumstances), the distribution rate borne by the Old Capital Securities will
increase by 0.25% per annum until the Exchange Offer is consummated. See
"Description of Old Capital Securities." Following consummation of the Exchange
Offer, the Old Capital Securities will not be entitled to
19
<PAGE>
any increase in the distribution rate thereon. The New Capital Securities will
not be entitled to any such increase in the distribution rate thereon.
EXCHANGE OFFER PROCEDURES
Issuance of the New Capital Securities in exchange for Old
Capital Securities pursuant to the Exchange Offer will be made only after a
timely receipt by the Exchange Agent of such Old Capital Securities, a properly
completed and duly executed Letter of Transmittal or Agent's Message in lieu
thereof and all other required documents. Therefore, holders of the Old Capital
Securities desiring to tender such Old Capital Securities in exchange for New
Capital Securities should allow sufficient time to ensure timely delivery.
Neither the Company, the Trust, nor the Exchange Agent is under any duty to give
notification of defects or irregularities with respect to the tenders of Old
Capital Securities for exchange.
LEUCADIA NATIONAL CORPORATION
The Company is a diversified financial services holding company
principally engaged in personal and commercial lines of property and casualty
insurance, life and health insurance, banking and lending and manufacturing. The
Company concentrates on return on investment and cash flow to build long-term
shareholder value, rather than emphasizing volume or market share. Additionally,
the Company continuously evaluates the retention and disposition of its existing
operations and investigates possible acquisitions of new businesses in order to
maximize shareholder value.
Shareholders' equity has grown to $1,120,353,000 at September 30,
1996 from a deficit of $7,657,000 at December 31, 1978 (prior to the acquisition
of a controlling interest in the Company by the Company's Chairman and
President), and book value per common share has grown to $18.57 at September 30,
1996 from negative $.11 at December 31, 1978. The Company's Chairman and
President and their families beneficially own in the aggregate approximately 35%
of the Company's outstanding Common Shares.
The Company's principal operations are its insurance businesses,
where it is a specialty markets provider of property and casualty and life
insurance products to niche markets. The Company's principal personal lines
insurance products are automobile insurance, homeowners insurance, graded
benefit life insurance marketed primarily to the age 50-and-over population and
variable annuity products. The Company's principal commercial lines are property
and casualty products provided for multi-family residential real estate, retail
establishments and taxicabs and other livery vehicles in the New York
metropolitan area. For the year ended December 31, 1995, the Company's insurance
segments contributed 78% of total revenues and, at December 31, 1995,
constituted 77% of consolidated assets.
The property and casualty insurance industry, which is highly
regulated and competitive, has historically been cyclical in nature, with
periods of less intense price competition and high underwriting standards
generating significant profits, followed by periods of increased price
competition and lower underwriting standards resulting in reduced profitability
or loss. The current cycle of intense price competition has continued for a
longer period than in the past, suggesting that the significant infusion of
capital into the industry in recent years, coupled with larger investment
returns has been, and may continue to be, a depressing influence on policy
rates. As indicated in the Selected Financial Data included herein, the
statutory combined ratios for the Company's property and casualty business have
been better than the industry averages for each of the past five years. This has
been due, in part, to the Company's low expense ratio.
The Company's insurance subsidiaries have a diversified
investment portfolio of securities, substantially all of which are issued or
guaranteed by the U.S. Treasury or by U.S. governmental agencies or
20
<PAGE>
are rated "investment grade" by Moody's Investors Service, Inc. and/or
Standard & Poor's Ratings Service. Investments in mortgage loans, real
estate and non-investment grade securities represented 5.0% of the insurance
subsidiaries' portfolio at September 30, 1996.
The Company's banking and lending operations principally consist
of making instalment loans to niche markets primarily funded by Deposits insured
by the Federal Deposit Insurance Company. One of the Company's principal lending
activities is providing automobile loans to individuals with poor credit
histories. The Company's manufacturing operations primarily manufacture products
for the "do-it-yourself" home improvement market and for industrial markets.
At December 31, 1995, the Company had minimum tax loss
carryforwards of approximately $141,600,000. The amount and availability of the
tax loss carryforwards are subject to certain qualifications, limitations and
uncertainties as more fully discussed in Note 14 of Notes to Consolidated
Financial Statements contained in the Annual Report, incorporated by reference
herein.
LEUCADIA NATIONAL CORPORATION
SELECTED FINANCIAL DATA
The selected financial data set forth below has been derived from
and should be read in conjunction with the audited financial statements and
other financial information contained in the Annual Report and with the
unaudited financial statements contained in the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996, which are incorporated by
reference herein. The selected historical financial information set forth below
for the nine months ended September 30, 1996 and 1995 is unaudited; however, in
the opinion of the Company's management, such financial information contains all
adjustments, consisting only of normal recurring items, necessary to present
fairly the financial information for such periods. The results of operations for
the nine months ended September 30, 1996 may not be indicative of annual results
of operations.
21
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- ---------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED INCOME STATEMENT DATA: (a)
Revenues.................................$1,140,935 $1,128,432 $1,558,314 $1,384,385 $1,408,058 $1,573,015 $1,086,748
Net securities gains (losses)............ 34,658 11,559 20,027 (12,004) 51,923 51,778 50,391
Interest expense (b)..................... 40,638 38,723 52,871 44,003 39,465 38,507 36,925
Insurance losses, policy benefits and
amortization of deferred acquisition
costs.................................... 718,655 692,851 942,803 819,010 789,752 896,673 558,127
Income before income taxes and
cumulative effects of changes in
accounting principles.................... 69,469 76,706 132,182 100,318 176,868 143,553 95,030
Income before cumulative effects of
changes in accounting principles (c)..... 47,959 55,458 107,503 70,836 116,259 130,607 94,830
Cumulative effects of changes in
accounting principles.................... -- -- -- -- 129,195 -- --
Net income............................... 47,959 55,458 107,503 70,836 245,454 130,607 94,830
Ratio of earnings to fixed charges:
(d)
Excluding interest on Deposits...... 3.51x 3.25x 3.84x 3.49x 5.80x 5.24x 4.54x
Including interest on Deposits...... 2.99x 2.79x 3.26x 3.08x 4.86x 4.14x 3.27x
Per share:
Primary earnings per common and
dilutive common equivalent share:
Income before cumulative
effects of changes in
accounting principles......... $.79 $.94 $1.81 $1.22 $1.98 $2.67 $2.00
Cumulative effects of changes
in accounting principles...... -- -- -- -- 2.21 -- --
---- ---- ----- ----- ----- ----- -----
Net income.................. $.79 $.94 $1.81 $1.22 $4.19 $2.67 $2.00
==== ==== ===== ===== ===== ===== =====
Fully diluted earnings per common
share:
Income before cumulative
effects of changes in
accounting principles......... $.79 $.93 $1.77 $1.21 $1.94 $2.66 $1.98
Cumulative effects of changes
in accounting principles...... -- -- -- -- 2.10 -- --
---- ---- ----- ----- ----- ----- -----
Net income.................. $.79 $.93 $1.77 $1.21 $4.04 $2.66 $1.98
==== ==== ===== ===== ===== ===== =====
Number of shares used in calculation
Primary......................... 60,556 58,927 59,271 58,202 58,539 48,870 47,409
Fully diluted................... 64,037 62,481 62,807 61,715 61,486 49,032 47,835
</TABLE>
<TABLE>
<CAPTION>
AT
SEPTEMBER 30, AT DECEMBER 31,
----------------- ---------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA: (a)
Cash and investments............... $3,146,002 $3,146,639 $2,764,890 $2,989,384 $3,371,624 $3,627,542
Total assets ...................... 5,168,070 5,107,874 4,674,046 4,689,272 4,330,580 4,590,096
Debt, including current maturities. 494,332 520,862 425,848 401,335 225,588 220,728
Customer banking deposits.......... 210,731 203,061 179,888 173,365 186,339 194,862
Common shareholders' equity........ 1,120,353 1,111,491 881,815 907,856 618,161 365,495
Book value per Common Share........ $18.57 $18.47 $15.72 $16.27 $11.06 $7.95
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED INFORMATION ON PROPERTY
AND CASUALTY INSURANCE
OPERATIONS (Unaudited): (a)(e)(f)
GAAP Combined Ratio................. 104.9% 103.3% 103.5% 99.1% 96.9% 101.7% 102.1%
SAP Combined Ratio.................. 101.6% 99.9% 101.2% 98.8% 93.7% 102.8% 103.3%
Industry SAP Combined Ratio (g)..... 106.0% 105.6% 106.4% 108.4% 106.9% 115.7% 108.8%
Premium to Surplus Ratio (h)........ N/A N/A 1.8x 1.9x 1.6x 2.0x 2.2x
<FN>
(a) Data includes acquired companies from date of acquisition.
(b) Includes interest on Deposits of $12,034,000, $8,304,000, $9,001,000,
$11,954,000 and $15,138,000 for the years ended December 31, 1995, 1994,
1993, 1992 and 1991, respectively, and $9,461,000 and $8,838,000 for the
nine month periods ended September 30, 1996 and 1995, respectively.
(c) The provision for income taxes for the years ended December 31, 1995, 1994
and 1993 and for the nine month periods ended September 30, 1996 and 1995
were calculated under Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," which does not reflect the benefit from
utilization of tax loss carryforwards. The provision for income taxes for
the years ended December 31, 1992 and 1991 have been reduced for the
benefit from utilization of tax loss carryforwards.
(d) For purposes of computing these ratios, earnings represent consolidated
pre-tax income before cumulative effects of changes in accounting
principles and equity in undistributed earnings or loss of less than 50%
owned companies, plus "fixed charges." Fixed charges excluding interest on
Deposits include interest expense (other than on Deposits), the portion of
net rental expense representative of the interest factor and amortization
of debt expense. Fixed charges including interest on Deposits include all
interest expense, the portion of net rental expense representative of the
interest factor and amortization of debt expense.
(e) Combined Ratios and the Premium to Surplus Ratios include both Colonial
Penn Group, Inc. and its subsidiaries for the relevant periods since
August 16, 1991 and Empire Insurance Company.
(f) The Combined Ratio is the sum of the Loss Ratio and the Underwriting
Expense Ratio determined in accordance with generally accepted accounting
principles ("GAAP") or statutory accounting principles ("SAP"), as the
case may be. The Loss Ratio is the ratio of incurred losses and loss
adjustment expenses to net premiums earned. The Expense Ratio is the ratio
of underwriting expenses (policy acquisition costs, commissions and a
portion of administrative, general and other expenses attributable to
underwriting operations) to net premiums written, if determined in
accordance with SAP, or to net premiums earned, if determined in
accordance with GAAP. A Combined Ratio under 100% indicates an
underwriting profit and a Combined Ratio above 100% indicates an
underwriting loss. The Combined Ratio does not include the effect of
investment income. Certain accident and health insurance business, which
is included in the statutory results of operations of the property and
casualty insurance segment and is reflected in the SAP Combined Ratio, is
reported in the life insurance segment for financial reporting purposes
and therefore is not included in the GAAP Combined Ratios reflected
herein. For the nine month periods ended September 30, 1996 and 1995, the
difference between the GAAP Combined Ratio and the SAP Combined Ratio
principally reflects adjustments to SAP reinsurance reserves and, in 1996,
the accounting for certain expenses which are treated differently under
SAP and GAAP. For 1995, a change in the statutory
23
<PAGE>
accounting treatment for retrospectively rated reinsurance agreements was
the principal reason for the difference between the GAAP Combined Ratio
and the SAP Combined Ratio. For 1993, the difference in the treatment of
costs for GAAP and SAP purposes was a principal reason for the difference
between the GAAP Combined Ratio and the SAP Combined Ratio. For 1992, the
results of certain accident and health insurance business had a
non-recurring income item which reduced the SAP Combined Ratio. In
addition, in 1992, certain income credits were recognized only for GAAP
purposes.
(g) Source: Best's Aggregate & Averages, Property/Casualty, 1996 edition, with
respect to annual information for 1991 through 1995, and Best Week P/C
Supplement, December 23, 1996 Release 13, with respect to interim
information for 1996 and 1995. Industry Combined Ratios may not be fully
comparable as a result of, among other things, differences in geographical
concentration and in the mix of property and casualty insurance products.
(h) The Premium to Surplus Ratio was calculated by dividing statutory property
and casualty insurance premiums written by statutory capital at the end of
the year.
</FN>
</TABLE>
24
<PAGE>
CAPITALIZATION
The following table sets forth the September 30, 1996
unaudited consolidated capitalization of the Company and its subsidiaries (a) as
reported, (b) as adjusted before the offering of the Old Capital Securities (the
"Offering") to reflect the issuance of $135,000,000 principal amount of the
7 7/8% Notes and the use of proceeds therefrom for the purchase of $102,656,000
aggregate principal amount of the 10 3/8% Notes and (c) as adjusted for the
Offering. This table should be read in conjunction with the Company's
consolidated financial statements and the notes thereto incorporated by
reference herein. See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 (UNAUDITED)
------------------------------
AS
ADJUSTED AS
BEFORE ADJUSTED
AS THE FOR THE
REPORTED OFFERING OFFERING
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Long-term debt (a):
Revolving bank credit agreement
borrowings................................. $ -- $ -- $ --
Term loans with banks, due in 1999............ 50,000 50,000 50,000
7 3/4% Senior Notes due 2013, less
debt discount of $844...................... 99,156 99,156 99,156
Industrial revenue bonds...................... 4,900 4,900 4,900
Other senior debt............................. 15,811 15,811 15,811
7 7/8% Senior Subordinated Notes
due 2006, less debt discount of $693....... -- 134,307 134,307
8 1/4% Senior Subordinated Notes
due 2005................................... 100,000 100,000 100,000
10 3/8% Senior Subordinated Notes
due 2002.................................. 124,465(b) 22,248(c) 22,248(c)
5 1/4% Convertible Subordinated
Debentures due 2003........................ 100,000 100,000 100,000
---------- ---------- ----------
Total long-term debt, including
current maturities....................... 494,332 526,422 526,422
---------- ---------- ----------
Company-obligated mandatorily
redeemable preferred securities of
subsidiary trust (d).......................... -- -- 150,000
---------- ---------- ----------
Shareholders' Equity (e):
Common shares, par value $1 per
share, authorized 150,000,000
shares; 60,345,525 shares issued
and outstanding, after deducting
shares held in treasury.................... 60,346 60,346 60,346
Additional paid-in capital................. 160,681 160,681 160,681
Net unrealized (loss) on
investments............................... (9,960) (9,960) (9,960)
Retained earnings.......................... 909,286 902,386(f) 902,386(f)
---------- ---------- ----------
Total shareholders' equity............... 1,120,353 1,113,453 1,113,453
---------- ---------- ----------
Total................................. $1,614,685 $1,639,875 $1,789,875
========== ========== ==========
25
<PAGE>
<FN>
(a)Excludes Deposits of approximately $210,731,000. For information with respect
to interest rates, maturities, priorities and restrictions related to
outstanding long-term debt, see Note 10 of Notes to Consolidate Financial
Statements contained in the Annual Report.
(b)Less debt discount of $535,000.
(c)Less debt discount of $96,000.
(d)The assets of the Trust consist solely of approximately $154,640,000 in
aggregate principal amount of the Subordinated Debt Securities with an
interest rate of 8.65% and a maturity date of January 15, 2027.
(e)For information with respect to stock options and contingent obligations, see
Notes 11 and 17 of Notes to Consolidated Financial Statements contained in
the Annual Report.
(f)Reflects a $6,900,000 extraordinary loss, net of taxes, related to the early
extinguishment of the 10 3/8% Notes.
</FN>
</TABLE>
26
<PAGE>
ACCOUNTING TREATMENT
The financial statements of the Trust will be reflected in the
Company's consolidated financial statements, with the Capital Securities shown
as Company-obligated mandatorily redeemable preferred securities of a subsidiary
trust. In a footmote to the Company's audited financial statements there will be
included a statement that the sole asset of the Trust is the Subordinated
Debt Securities (indicating the principal amount, interest rate and maturity
date thereof). See "Capitalization."
USE OF PROCEEDS
Neither the Company nor the Trust will receive any cash
proceeds from the issuance of the New Capital Securities offered hereby. In
consideration for issuing the New Capital Securities in exchange for Old Capital
Securities as described in this Prospectus, the Trust will receive Old Capital
Securities in like liquidation amount. The Old Capital Securities surrendered in
exchange for the New Capital Securities will be retired and cancelled.
All of the proceeds from the sale of the Old Capital
Securities and the Common Securities were invested by the Trust in Subordinated
Debt Securities of the Company issued pursuant to the Indenture. The Company
applied the net proceeds from the sale of the Old Subordinated Debt Securities
(approximately $148 million) to its general funds to be used for general
corporate purposes, which may include, from time to time, the redemption or the
purchase, in the open market or in privately negotiated transactions or
otherwise, of outstanding indebtedness of the Company, or for working capital,
acquisitions or investment opportunities. Although the Company from time to time
evaluates potential acquisitions and investment opportunities, it currently has
no understandings, commitments or agreements with respect thereto. Pending such
application, the net proceeds have been invested in domestic and foreign,
short/intermediate-term obligations which are primarily investment grade.
THE TRUST
The Trust is a statutory business trust created under Delaware
law pursuant to (i) the Initial Declaration (as such Initial Declaration has
been amended and restated, the "Declaration") and (ii) the filing of a
certificate of trust for the Trust with the Delaware Secretary of State on
January 10, 1997. The Trust"s business and affairs are conducted by its
trustees, each appointed by the Company as the holder of the Common Securities.
At least one trustee of the Trust is required to be an entity that maintains its
principal place of business in the State of Delaware (the "Delaware Trustee")
and at least one trustee is required to be a financial institution that is
unaffiliated with the Company and is eligible to act as property trustee and as
indenture trustee pursuant to the terms set forth therein (the "Institutional
Trustee" and together with the Delaware Trustee, the "Trustees").
The Chase Manhattan Bank initially is serving as Institutional
Trustee and Chase Manhattan Bank Delaware initially is serving as Delaware
Trustee. In addition, three individuals who are employees or officers of or
affiliated with the holder of the majority of the Common Securities are acting
as administrators with respect to the Trust (the "Administrators"). The
Administrators have been selected by the holders of a majority of the Common
Securities. See "Description of the Capital Securities -- Miscellaneous." The
Trust exists for the exclusive purposes of (i) issuing the Trust Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of such Trust Securities in the Subordinated Debt
Securities, and (iii) engaging in only those other activities necessary or
incidental thereto, including engaging in the Exchange Offer. All of the Common
Securities of the Trust are directly owned by the Company. The
27
<PAGE>
Common Securities of the Trust rank pari passu, and payments are made thereon
pro rata, with the Capital Securities of the Trust except that upon the
occurrence and continuation of a Declaration Event of Default, the rights of the
holders of the Common Securities to payment from the Trust in respect of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Capital Securities. The Company
has acquired Common Securities in an aggregate liquidation amount equal to
approximately 3% of the total capital of the Trust. The Trust has a term of
approximately 55 years, but may earlier dissolve as provided in the Declaration.
The Company, as the holder of all of the outstanding Common Securities, has the
right at any time to dissolve the Trust (including, without limitation, upon the
occurrence of a Tax Event) and, after satisfaction of liabilities to creditors
of the Trust, cause the Subordinated Debt Securities to be distributed to the
holders of the Trust Securities on a pro rata basis in accordance with the
respective liquidation amounts thereof, in liquidation of the Trust.
The Institutional Trustee holds title to the Subordinated Debt
Securities for the benefit of the holders of the Trust Securities and has the
power to exercise all rights, powers and privileges under the Indenture as the
holder of the Subordinated Debt Securities. In addition, the Institutional
Trustee maintains exclusive control of a separate, segregated, non-interest
bearing trust account (the "Property Account") to hold all payments made in
respect of the Subordinated Debt Securities for the benefit of the holders of
the Trust Securities issued by the Trust. The Institutional Trustee will make
payments of distributions and payments on liquidation, redemption and otherwise
to the holders of record of the Trust Securities out of funds from the Property
Account. Holders of Capital Securities are not and will not be entitled to
appoint, remove or replace the Institutional Trustee or the Delaware Trustee
except upon the occurrence of certain events described herein. See "Description
of the Capital Securities -- Voting Rights" and "-- Removal of Trustees;
Appointment of Successors." The Company, as borrower under the Indenture, has
covenanted to pay all costs, expenses, debts and other obligations related to
the Trust (other than in respect of the Trust Securities) and the offering and
sale of the Trust Securities. See "Description of the Subordinated Debt
Securities -- Miscellaneous." The rights of the holders of the Capital
Securities of the Trust, including economic rights, rights to information and
voting rights, are set forth in the Declaration with respect to the Trust, the
Delaware Business Trust Act, as amended (the "Trust Act"), and the Trust
Indenture Act. See "Description of the Capital Securities."
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<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF EXCHANGE OFFER
In connection with the sale of the Old Capital Securities, the
Company and the Trust entered into the Registration Rights Agreement with the
Initial Purchasers, pursuant to which the Company and the Trust agreed to file
and to use their reasonable best efforts to cause to be declared effective by
the Commission a registration statement with respect to the exchange of the Old
Capital Securities for capital securities with terms identical in all material
respects to the terms of the Old Capital Securities (except as described below).
A copy of the Registration Rights Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual
obligations of the Company and the Trust under the Registration Rights
Agreement. The form and terms of the New Capital Securities are the same as the
form and terms of the Old Capital Securities, except that the New Capital
Securities (i) have been registered under the Securities Act and therefore will
not be subject to certain restrictions on transfer applicable to the Old Capital
Securities and (ii) will not provide for any increase in the distribution rate
thereon. In that regard, the Old Capital Securities provide, among other things,
that, if the Exchange Offer is not consummated by August 19, 1997 (subject to
extension in certain circumstances), the distribution rate borne by the Old
Capital Securities will increase by 0.25% per annum until the Exchange Offer is
consummated. Upon consummation of the Exchange Offer, holders of Old Capital
Securities will not be entitled to any increase in the distribution rate thereon
or any further registration rights under the Registration Rights Agreement,
except under limited circumstances. See "Risk Factors -- Consequences of a
Failure to Exchange Old Capital Securities" and "Description of the Capital
Securities."
The Exchange Offer is not being made to, nor will the Trust or
the Company accept tenders for exchange from, holders of Old Capital Securities
in any jurisdiction in which the Exchange Offer or the acceptance thereof would
not be in compliance with the securities or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with
respect to the Exchange Offer means any person in whose name the Old Capital
Securities are registered on the books of the Trust or any other person who has
obtained a properly completed bond power from the registered holder, or any
person whose Old Capital Securities are held of record by The Depository Trust
Company ("DTC") who desires to deliver such Old Capital Securities by book entry
transfer at DTC.
Pursuant to the Exchange Offer, the Company will exchange as
soon as practicable after the date hereof, the Old Guarantee for the New
Guarantee and all of the Old Subordinated Debt Securities, of which $154,640,000
aggregate principal amount is outstanding, for a like aggregate principal amount
of the New Subordinated Debt Securities. The New Guarantee has been registered,
and New Subordinated Debt Securities have been registered to the extent required
to be registered, under the Securities Act.
TERMS OF EXCHANGE
The Trust hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus and in the accompanying Letter of
Transmittal, to exchange up to $150,000,000 aggregate liquidation amount of New
Capital Securities for a like aggregate liquidation amount of Old Capital
Securities properly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the Expiration Date, an aggregate liquidation amount of up
to $150,000,000 of New Capital Securities in exchange for a like aggregate
liquidation amount of outstanding Old Capital Securities tendered and accepted
in connection with the Exchange Offer. Holders may
29
<PAGE>
tender their Old Capital Securities in whole or in part in a liquidation amount
of not less than $100,000 or any integral multiple of $1,000 in excess thereof
provided that if any Old Capital Securities are tendered in exchange for part,
the untendered Liquidation Amount must be $100,000 or any integral multiple of
$l,000 in excess thereof.
The Exchange Offer is not conditioned upon any minimum
liquidation amount of Old Capital Securities being tendered. As of the date of
this Prospectus, $150,000,000 aggregate liquidation amount of the Old Capital
Securities is outstanding.
Holders of Old Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Old Capital Securities
which are not tendered for or are tendered but not accepted in connection with
the Exchange Offer will remain outstanding and be entitled to the benefits of
the Declaration, but will not be entitled to any further registration rights
under the Registration Rights Agreement, except under limited circumstances. See
"Risk Factors -- Consequences of a Failure to Exchange Old Capital Securities"
and "Description of the Capital Securities."
If any tendered Old Capital Securities are not accepted for
exchange because of an invalid tender, the occurrence of certain other events
set forth herein or otherwise, certificates for any such unaccepted Old Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.
Holders who tender Old Capital Securities in connection with
the Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Old Capital Securities in connection with the
Exchange Offer. The Company will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "-- Fees and Expenses."
NEITHER THE BOARD OF DIRECTORS OF THE COMPANY NOR ANY
ADMINISTRATOR OR ANY TRUSTEE OF THE TRUST MAKES ANY RECOMMENDATION TO HOLDERS OF
OLD CAPITAL SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR
ANY PORTION OF THEIR OLD CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER. IN
ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF
OLD CAPITAL SECURITIES MUST MAKE THEIR OWN DECISION WHETHER TO TENDER PURSUANT
TO THE EXCHANGE OFFER AND, IF SO, THE AGGREGATE AMOUNT OF OLD CAPITAL SECURITIES
TO TENDER AFTER READING THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL AND
CONSULTING WITH THEIR ADVISERS, IF ANY, BASED ON THEIR OWN FINANCIAL POSITION
AND REQUIREMENTS.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" means 5:00 p.m., New York City
time, on ___________, 1997, unless the Exchange Offer is extended by the Company
and the Trust (in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended).
The Company and the Trust expressly reserve the right in their
sole discretion, subject to applicable law, at any time and from time to time,
(i) to delay the acceptance of the Old Capital Securities for exchange, (ii) to
terminate the Exchange Offer (whether or not any Old Capital Securities have
theretofore been accepted for exchange) if the Company and the Trust determine,
in their sole discretion, that any of the events or conditions referred to under
"-- Conditions to the Exchange Offer" have occurred or exist or have not been
30
<PAGE>
satisfied, (iii) to extend the Expiration Date of the Exchange Offer and retain
all Old Capital Securities tendered pursuant to the Exchange Offer, subject,
however, to the right of holders of Old Capital Securities to withdraw their
tendered Old Capital Securities as described under "-- Withdrawal Rights," and
(iv) to waive any condition or otherwise amend the terms of the Exchange Offer
in any respect. If the Exchange Offer is amended in a manner determined by the
Company and the Trust to constitute a material change, or if the Company and the
Trust waive a material condition of the Exchange Offer, the Company and the
Trust will promptly disclose such amendment by means of an amended or
supplemented Prospectus that will be distributed to the registered holders of
the Old Capital Securities, and the Company and the Trust will extend the
Exchange Offer to the extent required by Rule 14e-l under the Exchange Act.
Any such delay in acceptance, extension, termination or
amendment will be followed promptly by oral or written notice thereof to the
Exchange Agent and by making a public announcement thereof, and such
announcement in the case of an extension will be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which the Company and the Trust
may choose to make any public announcement and subject to applicable law, the
Company and the Trust shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by issuing a
release to an appropriate news agency.
ACCEPTANCE FOR EXCHANGE AND ISSUANCE
OF NEW CAPITAL SECURITIES
Upon the terms and subject to the conditions of the Exchange
Offer, the Trust will exchange, and will issue to the Exchange Agent, New
Capital Securities for Old Capital Securities validly tendered and not withdrawn
(pursuant to the withdrawal rights described under "-- Withdrawal Rights")
promptly after the Expiration Date.
In all cases, delivery of New Capital Securities in exchange
for Old Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent of
(i) Old Capital Securities or a book-entry confirmation of a book-entry transfer
of Old Capital Securities into the Exchange Agent's account at DTC, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, (ii) the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees or (in the
case of a book-entry transfer) an Agent's Message in lieu of the Letter of
Transmittal and (iii) any other documents required by the Letter of Transmittal.
The term "book-entry confirmation" means a timely confirmation
of a book-entry transfer of Old Capital Securities into the Exchange Agent's
account at DTC. The term "Agent's Message" means a message, transmitted by DTC
to and received by the Exchange Agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgement from
the tendering Participant (as defined herein), which acknowledgement states that
such Participant has received and agrees to be bound by the Letter of
Transmittal and that the Trust and the Company may enforce such Letter of
Transmittal against such Participant.
Subject to the terms and conditions of the Exchange Offer, the
Company and the Trust will be deemed to have accepted for exchange, and thereby
exchanged, Old Capital Securities validly tendered and not withdrawn as, if and
when the Trust gives oral or written notice to the Exchange Agent of the
Company's and the Trust's acceptance of such Old Capital Securities for exchange
pursuant to the Exchange Offer. The Exchange Agent will act as agent for the
Company and the Trust for the purpose of receiving tenders of Old Capital
Securities, Letters of Transmittal and related documents, and as agent for
tendering holders for the
31
<PAGE>
purpose of receiving Old Capital Securities, Letters of Transmittal and related
documents and transmitting New Capital Securities to validly tendering holders.
Such exchange will be made promptly after the Expiration Date. If for any reason
whatsoever, acceptance for exchange or the exchange of any Old Capital
Securities tendered pursuant to the Exchange Offer is delayed (whether before or
after the Company's and the Trust's acceptance for exchange of Old Capital
Securities) or the Company and the Trust extend the Exchange Offer or are unable
to accept for exchange or exchange Old Capital Securities tendered pursuant to
the Exchange Offer, then, without prejudice to the Company's and the Trust's
rights set forth herein, the Exchange Agent may, nevertheless, on behalf of the
Company and the Trust and subject to Rule 14e-1(c) under the Exchange Act,
retain tendered Old Capital Securities and such Old Capital Securities may not
be withdrawn except to the extent tendering holders are entitled to withdrawal
rights as described under "-- Withdrawal Rights."
Pursuant to the Letter of Transmittal or Agent's Message in
lieu thereof, a holder of Old Capital Securities will warrant and agree in the
Letter of Transmittal that it has full power and authority to tender, exchange,
sell, assign and transfer Old Capital Securities, that the Trust will acquire
good, marketable and unencumbered title to the tendered Old Capital Securities,
free and clear of all liens, restrictions, charges and encumbrances, and the Old
Capital Securities tendered for exchange are not subject to any adverse claims
or proxies. The holder also will warrant and agree that it will, upon request,
execute and deliver any additional documents deemed by the Company, the Trust or
the Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment, and transfer of the Old Capital Securities tendered pursuant to the
Exchange Offer.
PROCEDURES FOR TENDERING OLD CAPITAL SECURITIES
Valid Tender. Except as set forth below, in order for Old
Capital Securities to be validly tendered pursuant to the Exchange Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees or (in the case of a book-entry
tender) an Agent's Message in lieu of the Letter of Transmittal and any other
required documents, must be received by the Exchange Agent at its address set
forth under "--Exchange Agent," on or prior to the Expiration Date and (i)
tendered Old Capital Securities must be received by the Exchange Agent, or (ii)
such Old Capital Securities must be tendered pursuant to the procedures for
book-entry transfer set forth below and a book-entry confirmation, including an
Agent's Message if the tendering holder has not delivered a Letter of
Transmittal, must be received by the Exchange Agent, in each case on or prior to
the Expiration Date, or (iii) the guaranteed delivery procedures set forth below
must be complied with.
If less than all of the Old Capital Securities are tendered, a
tendering holder should fill in the amount of Old Capital Securities being
tendered in the appropriate box on the Letter of Transmittal or so indicate in
an Agent's Message in lieu of the Letter of Transmittal. The entire amount of
Old Capital Securities delivered to the Exchange Agent will be deemed to have
been tendered unless otherwise indicated.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF
THE TENDERING HOLDER, AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL, RETURN
RECEIPT REQUESTED, PROPERLY INSURED, OR AN OVERNIGHT DELIVERY SERVICE IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book Entry Transfer. The Exchange Agent will establish an
account with respect to the Old Capital Securities at DTC for purposes of the
Exchange Offer within two business days after the date of this
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<PAGE>
Prospectus. Any financial institution that is a participant in DTC's book-entry
transfer facility system may make a book entry delivery of the Old Capital
Securities by causing DTC to transfer such Old Capital Securities into the
Exchange Agent's account at DTC in accordance with DTC's procedures for
transfers. However, although delivery of Old Capital Securities may be effected
through book entry transfer into the Exchange Agent's account at DTC, the Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or an Agent's Message in lieu of a
Letter of Transmittal, and any other required documents, must in any case be
delivered to and received by the Exchange Agent at its address set forth under
"-- Exchange Agent" on or prior to the Expiration Date, or the guaranteed
delivery procedure set forth below must be complied with.
DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH DTC'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
Signature Guarantees. Certificates for the Old Capital
Securities need not be endorsed and signature guarantees on the Letter of
Transmittal are unnecessary unless (i) a certificate for the Old Capital
Securities is registered in a name other than that of the person surrendering
the certificate or (ii) such registered holder completes the box entitled
"Special Issuance Instructions" or "Special Delivery Instructions" in the Letter
of Transmittal. In the case of (i) or (ii) above, such certificates for Old
Capital Securities must be duly endorsed or accompanied by a properly executed
bond power, with the endorsement or signature on the bond power and on the
Letter of Transmittal guaranteed by a firm or other entity identified in Rule
l7Ad-15 under the Exchange Act as an "eligible guarantor institution," including
(as such terms are defined therein): (i) a bank; (ii) a broker, dealer,
municipal securities broker or dealer or government securities broker or dealer;
(iii) a credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association (an "Eligible Institution"),
unless surrendered on behalf of such Eligible Institution. See Instruction 1 to
the Letter of Transmittal.
Guaranteed Delivery. If a holder desires to tender Old Capital
Securities pursuant to the Exchange Offer and the certificates for such Old
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or before the Expiration Date,
or the procedures for book-entry transfer cannot be completed on a timely basis,
such Old Capital Securities may nevertheless be tendered, provided that all of
the following guaranteed delivery procedures are complied with:
(i) such tenders are made by or through an Eligible
Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form accompanying the Letter
of Transmittal, is received by the Exchange Agent, as provided below,
on or prior to Expiration Date; and
(iii) the certificates (or a book-entry confirmation)
representing all tendered Old Capital Securities, in proper form for
transfer, together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof or Agent's Message in lieu
thereof), with any required signature guarantees and any other
documents required by the Letter of Transmittal are received by the
Exchange Agent within three New York Stock Exchange trading days after
the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or
transmitted by facsimile or mail to the Exchange Agent and must include a
guarantee by an Eligible Institution in the form set forth in such notice.
33
<PAGE>
Notwithstanding any other provision hereof, the delivery of
New Capital Securities in exchange for Old Capital Securities tendered and
accepted for exchange pursuant to the Exchange Offer will in all cases be made
only after timely receipt by the Exchange Agent of Old Capital Securities, or of
a book-entry confirmation with respect to such Old Capital Securities, and a
properly completed and duly executed Letter of Transmittal (or facsimile thereof
or an Agent's Message in lieu thereof), together with any required signature
guarantees and any other documents required by the Letter of Transmittal.
Accordingly, the delivery of New Capital Securities might not be made to all
tendering holders at the same time, and will depend upon when Old Capital
Securities, book-entry confirmations or an Agent's Message in lieu thereof with
respect to Old Capital Securities and other required documents are received by
the Exchange Agent.
The Company and the Trust's acceptance for exchange of Old
Capital Securities tendered pursuant to any of the procedures described above
will constitute a binding agreement among the tendering holder, the Company and
the Trust upon the terms and subject to the conditions of the Exchange Offer.
Determination Of Validity. All questions as to the form of
documents, validity, eligibility (including time of receipt) and acceptance for
exchange of any tendered Old Capital Securities will be determined by the
Company and the Trust, in their sole discretion, whose determination shall be
final and binding on all parties. The Company and the Trust reserve the absolute
right, in their sole discretion, to reject any and all tenders determined by
them not to be in proper form or the acceptance of which, or exchange for, may,
in the view of counsel to the Company or the Trust, be unlawful. The Company and
the Trust also reserve the absolute right, subject to applicable law, to waive
any of the conditions of the Exchange Offer as set forth under "-- Conditions to
the Exchange Offer" or any condition or irregularity in any tender of Old
Capital Securities of any particular holder whether or not similar conditions or
irregularities are waived in the case of other holders.
The Company's and the Trust's interpretation of the terms and
conditions of the Exchange Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. No tender of Old Capital
Securities will be deemed to have been validly made until all irregularities
with respect to such tender have been cured or waived. Neither the Company, the
Trust, any affiliates or assigns of the Company or the Trust, the Exchange Agent
nor any other person shall be under any duty to give any notification of any
irregularities in tenders or incur any liability for failure to give any such
notification.
If any Letter of Transmittal, endorsement, bond power, power
of attorney, or any other document required by the Letter of Transmittal is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and unless waived by the
Trust, proper evidence satisfactory to the Company and the Trust, in their sole
discretion, of such person's authority to so act must be submitted.
A beneficial owner of Old Capital Securities that are held by
or registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial holder wishes to participate in the Exchange Offer.
RESALES OF NEW CAPITAL SECURITIES
Based on existing interpretations by the staff of the
Commission set forth in several no-action letters to third parties, and subject
to the immediately following sentence, the Company and the Trust believe that
New Securities issued pursuant to the Exchange Offer in exchange for Old
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such New Securities
are acquired in the
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ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such New Securities. However, any holder of Old Capital Securities who is an
"affiliate" of either the Company or the Trust, a broker-dealer that acquires
the Old Capital Securities in a transaction other than a part of its
market-making or other trading activities or other holder who intends to
participate in the Exchange Offer for the purpose of distributing New Capital
Securities (i) will not be able to rely on the interpretations by the staff of
the Commission set forth in the above-mentioned interpretive letters, (ii) will
not be able to tender such Old Capital Securities in the Exchange Offer, and
(iii) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or other transfer of such Old
Capital Securities unless such sale is made pursuant to an exemption from such
requirements. Neither the Company nor the Trust sought its own no-action letter
and there can be no assurance that the staff of the Commission would make a
similar determination with respect to the Exchange Offer as it has in such
no-action letters to third parties.
Each holder of Old Capital Securities (other than a
broker-dealer) who wishes to exchange Old Capital Securities for New Capital
Securities in the Exchange Offer will be required to represent that (i) it is
not an "affiliate" of the Company or the Trust, (ii) any New Capital Securities
to be received by it are being acquired in the ordinary course of its business
and (iii) it has no arrangement or understanding with any person to participate
in a distribution (within the meaning of the Securities Act) of such New Capital
Securities. The Letter of Transmittal contains the foregoing representations. In
addition, the Company and the Trust may require such holder, as a condition to
such holder's eligibility to participate in the Exchange Offer, to furnish to
the Company and the Trust (or an agent thereof) in writing information as to the
number of "beneficial owners" (within the meaning of Rule 13d-3 under the
Exchange Act) on behalf of whom such holder holds the Old Capital Securities to
be exchanged in the Exchange Offer. Each Exchanging Dealer will be deemed to
have acknowledged by execution of the Letter of Transmittal or delivery of an
Agent's Message that it acquired the Old Capital Securities for its own account
as the result of market-making activities or other trading activities and must
agree that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Capital Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, an Exchanging Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. Based on the position
taken by the staff of the Commission in the no-action letters referred to above,
the Company and the Trust believe that Exchanging Dealers may fulfill their
prospectus delivery requirements with respect to the New Capital Securities
received upon exchange of such Old Capital Securities (other than Old Capital
Securities which represent an unsold allotment from the original sale of the Old
Capital Securities) with a prospectus meeting the requirements of the Securities
Act, which may be the prospectus prepared for an exchange offer so long as it
contains a description of the plan of distribution with respect to the resale of
such New Capital Securities. Subject to certain provisions set forth in the
Registration Rights Agreement and to the limitations set out herein, the Company
and the Trust have agreed that this Prospectus, as it may be amended or
supplemented from time to time, may be used by an Exchanging Dealer in
connection with resales of such New Capital Securities for a period ending one
year after the Expiration Date (or longer, if required by the Registration
Rights Agreement). See "Plan of Distribution." Any person, including any
Exchanging Dealer, who is an "affiliate" of the Company or the Trust may not
rely on such no-action letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction.
In that regard, each Exchanging Dealer who surrenders Old
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal or delivery of an Agent's Message in
lieu thereof, that, upon receipt of notice from the Company or the Trust of the
occurrence of any event or the discovery of any fact which makes any statement
contained or incorporated by reference in this Prospectus untrue in any material
respect or which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or incorporated by reference
herein, in light of the
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circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the Registration Rights Agreement, such
Exchanging Dealer will suspend the sale of New Securities pursuant to this
Prospectus until the Company or the Trust has amended or supplemented this
Prospectus to correct such misstatement or omission and has furnished copies of
the amended or supplemented Prospectus to such Exchanging Dealer or the Company
or the Trust has given notice that the sale of the New Securities may be
resumed, as the case may be.
WITHDRAWAL RIGHTS
Except as otherwise provided herein, tenders of Old Capital
Securities may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective a written,
telegraphic, telex or facsimile transmission of such notice of withdrawal must
be timely received by the Exchange Agent at its address set forth under
"--Exchange Agent" on or prior to the Expiration Date. Any such notice of
withdrawal must specify the name of the person who tendered the Old Capital
Securities to be withdrawn, the aggregate principal amount of Old Capital
Securities to be withdrawn, and (if certificates for such Old Capital Securities
have been tendered) the name of the registered holder of the Old Capital
Securities as set forth on the Old Capital Securities, if different from that of
the person who tendered such Old Capital Securities. If Old Capital Securities
have been delivered or otherwise identified to the Exchange Agent, then prior to
the physical release of such Old Capital Securities, the tendering holder must
submit the certificate numbers shown on the particular Old Capital Securities to
be withdrawn and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution, except in the case of Old Capital Securities tendered
for the account of an Eligible Institution. If Old Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set forth in "--
Procedures for Tendering Old Capital Securities," the notice of withdrawal must
specify the name and number of the account at DTC to be credited with the
withdrawal of Old Capital Securities, in which case a notice of withdrawal will
be effective if delivered to the Exchange Agent by written, telegraphic, telex
or facsimile transmission. Withdrawals of tenders of Old Capital Securities may
not be rescinded. Old Capital Securities properly withdrawn will not be deemed
validly tendered for purposes of the Exchange Offer, but may be retendered at
any subsequent time on or prior to the Expiration Date by following any of the
procedures described above under "-- Procedures for Tendering Old Capital
Securities."
All questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices will be determined by the
Company and the Trust, in their sole discretion, whose determination shall be
final and binding on all parties. Neither the Company, the Trust, any affiliates
or assigns of the Company or the Trust, the Exchange Agent nor any other person
shall be under any duty to give any notification of any irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification. Any Old Capital Securities which have been tendered but which are
withdrawn will be returned to the holder thereof promptly after withdrawal.
DISTRIBUTIONS ON NEW CAPITAL SECURITIES
Holders of Old Capital Securities whose Old Capital Securities
are accepted for exchange will not receive accumulated distributions on such Old
Capital Securities for any period from and after the last Distribution Payment
Date with respect to such Old Capital Securities prior to the original issue
date of the New Capital Securities or, if no such distributions have been made,
will not receive any accumulated distributions on such Old Capital Securities,
and will be deemed to have waived the right to receive any distributions on such
Old Capital Securities accumulated from and after such Distribution Payment Date
or, if no such distributions have been made, from and after January 21, 1997.
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CONDITIONS TO EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or
any extension of the Exchange Offer, the Company and the Trust will not be
required to accept for exchange, or to exchange, any Old Capital Securities for
any New Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Old Capital Securities have theretofore been accepted
for exchange) or may waive any conditions to or amend the Exchange Offer, if any
of the following conditions have occurred or exists or have not been satisfied:
(a) there shall occur a change in the current interpretation
by the staff of the Commission which permits the New Capital Securities
issued pursuant to the Exchange Offer in exchange for Old Capital
Securities to be offered for resale, resold and otherwise transferred
by holders thereof (other than broker-dealers and any such holder which
is an "affiliate" of the Company or the Trust within the meaning of
Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that such New Capital Securities are acquired in the ordinary
course of such holders' business and such holders have no arrangement
or understanding with any person to participate in the distribution of
such New Capital Securities;
(b) any action or proceeding shall have been instituted or
threatened in any court or by or before any governmental agency or body
with respect to the Exchange Offer which, in the Company's and the
Trust's judgment, would reasonably be expected to impair the ability of
the Trust or the Company to proceed with the Exchange Offer;
(c) any law, statute, rule or regulation shall have been
adopted or enacted which, in the Company's and the Trust's judgment,
would reasonably be expected to impair the ability of the Trust or the
Company to proceed with the Exchange Offer;
(d) a banking moratorium shall have been declared by United
States federal or New York State authorities which, in the Company's
and the Trust's judgment, would reasonably be expected to impair the
ability of the Trust or the Company to proceed with the Exchange Offer;
(e) trading on the New York Stock Exchange or generally in the
United States over-the-counter market shall have been suspended by
order of the Commission or any other governmental authority which, in
the Company's and the Trust's judgment, would reasonably be expected to
impair the ability of the Trust or the Company to proceed with the
Exchange Offer;
(f) a stop order shall have been issued by the Commission or
any state securities authority suspending the effectiveness of the
Registration Statement or proceedings shall have been initiated or, to
the knowledge of the Company or the Trust, threatened for that purpose
or that any governmental approval has not been obtained, which approval
the Company and the Trust shall, in their sole discretion, deem
necessary for the consummation of the Exchange Offer as contemplated
hereby; or
(g) any change, or any development involving a prospective
change, in the business or financial affairs of the Trust or the
Company or any of its subsidiaries has occurred which, in the sole
judgment of the Company and the Trust, might materially impair the
ability of the Trust or the Company to proceed with the Exchange Offer.
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If the Company and the Trust determine in their sole
discretion that any of the foregoing events or conditions has occurred or exists
or has not been satisfied, the Company and the Trust may, subject to applicable
law, terminate the Exchange Offer (whether or not any Old Capital Securities
have theretofore been accepted for exchange) or may waive any such condition or
otherwise amend the terms of the Exchange Offer in any respect. If such waiver
or amendment constitutes a material change to the Exchange Offer, the Company
and the Trust will promptly disclose such waiver by means of an amended or
supplemented Prospectus that will be distributed to the registered holders of
the Old Capital Securities, and the Company and the Trust will extend the
Exchange Offer to the extent required by Rule 14e-1 under the Exchange Act.
EXCHANGE AGENT
The Chase Manhattan Bank has been appointed as Exchange Agent
for the Exchange Offer. Delivery of the Letters of Transmittal and any other
required documents, questions, requests for assistance, and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent as follows:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Corporate Trust Department
Telephone: (212) ___________________
Facsimile: (212) ___________________
Delivery to other than the above address or facsimile number
will not constitute a valid delivery.
FEES AND EXPENSES
The Company has agreed to pay the Exchange Agent reasonable
and customary fees for its services and will reimburse it for its reasonable
out-of-pocket expenses in connection therewith. The Company will also pay
brokerage houses and other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of this Prospectus
and related documents to the beneficial owners of Old Capital Securities, and in
handling or tendering for their customers.
Holders who tender their Old Capital Securities for exchange
will not be obligated to pay any transfer taxes in connection therewith. If,
however, New Capital Securities are to be delivered to, or are to be issued in
the name of, any person other than the registered holder of the Old Capital
Securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of Old Capital Securities in connection with the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
Neither the Company nor the Trust will make any payment to
brokers, dealers or others soliciting acceptances of the Exchange Offer.
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DESCRIPTION OF THE CAPITAL SECURITIES
The Old Capital Securities have been issued and the New
Capital Securities will be issued pursuant to the terms of the Declaration. The
Institutional Trustee, The Chase Manhattan Bank, is acting as trustee for the
Capital Securities under the Declaration. The Declaration has been qualified
under the Trust Indenture Act. The following summary of the material terms and
provisions of the Capital Securities does not purport to be complete and is
subject to, and qualified in its entirety by reference to the Declaration (a
copy of which has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part), the Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorizes the Administrators to issue, on
behalf of the Trust, the Trust Securities, which represent undivided beneficial
interests in the assets of the Trust. All of the Common Securities are owned by
the Company. The Common Securities have equivalent terms to and rank pari passu,
and payments will be made thereon on a pro rata basis, with the Capital
Securities, except that upon the occurrence and during the continuance of a
Declaration Event of Default, the rights of the holders of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Capital Securities. The Declaration does not permit the issuance by the
Trust of any securities other than the Trust Securities or the incurrence of any
indebtedness by the Trust. Pursuant to the Declaration, the Institutional
Trustee holds legal title to the Subordinated Debt Securities for the benefit of
the holders of the Trust Securities. The payment of distributions out of money
held by the Trust, and payments upon redemption of the Capital Securities upon
liquidation of the Trust, are guaranteed by the Company as described under
"Description of the Guarantee." The Guarantee is held by The Chase Manhattan
Bank, the Guarantee Trustee, for the benefit of the holders of the Capital
Securities. The Guarantee does not cover payment of distributions in respect of
the Capital Securities to the extent the Trust does not have available funds to
pay distributions. In such event, the remedy of holders of the Capital
Securities would be, through the vote of holders of a majority in liquidation
amount of the Capital Securities, to direct the Institutional Trustee to enforce
the Institutional Trustee's rights under the Subordinated Debt Securities except
in the circumstances in which a holder of such Capital Securities may take
Direct Action. See "-- Voting Rights" and "-- Declaration Events of Default."
DISTRIBUTIONS
Distributions on the Capital Securities are fixed at a rate
per annum of 8.65% of the stated liquidation amount of $1,000 per Capital
Security, compounded semiannually (to the extent permitted by law). The term
"distribution" as used herein includes cash distributions and any such
compounded distributions payable unless otherwise stated. The amount of
distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months and the actual number of days elapsed per 30-day
month.
Distributions on the Capital Securities are cumulative from
January 21, 1997, the date of original issuance of the Old Capital Securities,
and will be payable (subject to extensions of distribution payment periods as
described herein) semiannually in arrears on January 15 and July 15 of each year
(each, a "Distribution Payment Date"), commencing July 15, 1997, when, as and if
available for payment. Distributions will be made by the Institutional Trustee,
except as otherwise described below.
The Company has the right under the Indenture to defer
payments of interest on the Subordinated Debt Securities by extending the
interest payment period at any time and from time to time, subject to the
conditions described below, although such interest will continue to accrue on
the Subordinated Debt Securities at a rate of 8.65% per annum, compounded
semiannually (to the extent permitted by law) during
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any Extension Period. If such right is exercised, semiannual distributions on
the Capital Securities will also be deferred (though such distributions will
continue to accrue at the distribution rate of 8.65% per annum compounded
semiannually (to the extent permitted by law)), during any Extension Period.
Such right to extend any interest payment period for the Subordinated Debt
Securities is limited to Extension Periods, each not exceeding 10 consecutive
semiannual periods, and no Extension Period may be initiated while accrued
interest from a prior, completed Extension Period is unpaid or while the Company
is in default on the payment of interest that has become due and payable on the
Subordinated Debt Securities, and no Extension Period may extend beyond the
maturity of the Subordinated Debt Securities. In the event that the Company
exercises this right, then during any Extension Period (a) the Company shall not
declare or pay dividends on, make a distribution with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock or rights to acquire such capital stock (other than (i) purchases
or acquisitions of shares of any such capital stock or rights to acquire such
capital stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or any other contractual
obligations of the Company (other than a contractual obligation ranking pari
passu with or junior to the Subordinated Debt Securities), (ii) as a result of a
reclassification of the Company's capital stock or rights to acquire such
capital stock or the exchange or conversion of one class or series of the
Company's capital stock or rights to acquire such capital stock for another
class or series of the Company's capital stock or rights to acquire such capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) dividends and
distributions made on the Company's capital stock or rights to acquire such
capital stock with the Company's capital stock or rights to acquire the capital
stock, or (v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto), or make any guarantee payments with respect to any guarantee
by the Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior to the Subordinated Debt Securities
(other than payments under the Guarantee and the Common Securities Guarantee)
and (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company that rank pari passu with or junior to the Subordinated Debt
Securities. Prior to the termination of any such Extension Period in respect of
the Subordinated Debt Securities, the Company may further extend the interest
payment period; provided that each such Extension Period in respect of the
Subordinated Debt Securities, together with all such previous and further
extensions thereof, may not exceed 10 consecutive semiannual periods or extend
beyond the maturity of the Subordinated Debt Securities. Upon the termination of
any Extension Period in respect of the Subordinated Debt Securities and the
payment of all amounts then due, the Company may commence a new Extension
Period, subject to the above requirements. See "Description of the Subordinated
Debt Securities -- Interest," "-- Option to Extend Interest Payment Period" and
"-- Certain Covenants." If distributions are deferred, the distributions due on
such Capital Securities shall be paid on the date that the related Extension
Period terminates, or, if such date is not a Distribution Payment Date, on the
immediately following Distribution Payment Date, to holders of applicable
Capital Securities as they appear on the books and records of the Trust on the
record date immediately preceding such date.
Distributions on the Capital Securities must be paid on the
dates payable (after giving effect to any Extension Period) to the extent that
the Trust has funds available for the payment of such distributions in the
Property Account. The Trust's funds available for distribution to the holders of
the Capital Securities will be limited to payments received from the Company on
the Subordinated Debt Securities. See "Description of the Subordinated Debt
Securities." The payment of distributions out of moneys held by the Trust is
guaranteed by the Company to the extent set forth under "Description of the
Guarantee."
Distributions on the Capital Securities will be payable to the
holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which, as long as the Capital Securities are held
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solely in book-entry only form, will be one Business Day (as defined below)
prior to the relevant payment dates. Such distributions will be paid through the
Institutional Trustee who will hold amounts received in respect of the
Subordinated Debt Securities in the Property Account for the benefit of the
holders of the Trust Securities. Subject to any applicable laws and regulations
and the provisions of the Declaration, each such payment will be made as
described under "-- Book-Entry Only Issuance -- The Depository Trust Company."
At any time when the Capital Securities are not held solely in book-entry only
form, the Administrators shall select record dates, which shall be 15 days prior
to the relevant payment date. In the event that any date on which distributions
are to be made on the Capital Securities is not a Business Day, then payment of
the distributions payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay) with the same force and effect as if made on such payment date.
A "Business Day" shall mean any day other than Saturday, Sunday or any other day
on which banking institutions in New York City (in the State of New York) are
permitted or required by any applicable law to close.
REDEMPTION
The Subordinated Debt Securities will mature on January 15,
2027 and may be redeemed by the Company at par, together with accrued and unpaid
interest thereon to the date of redemption, in whole or in part, at any time in
certain circumstances upon the occurrence of a Tax Event. In addition, the
Subordinated Debt Securities may be redeemed by the Company, in whole or in
part, at anytime and from time to time on or after January 15, 2007, other than
upon the occurrence of a Tax Event, at the call prices (expressed as a
percentage of the principal amount) specified below:
If redeemed during the
12-month period beginning
January 15, Call Price
----------- ----------
2007................................................. 104.2790%
2008................................................. 103.8511
2009................................................. 103.4232
2010................................................. 102.9953
2011................................................. 102.5674
2012................................................. 102.1395
2013................................................. 101.7116
2014................................................. 101.2837
2015................................................. 100.8558
2016................................................. 100.4279
and thereafter at 100% of the principal amount (each a "Call Price"), together,
in each case, with accrued and unpaid interest thereon to the date of
redemption.
Upon the repayment in full at maturity or redemption in whole
or in part of the Subordinated Debt Securities (other than following the
distribution of the Subordinated Debt Securities to the holders of the Trust
Securities), the proceeds from such repayment or payment shall concurrently be
applied to redeem on a pro rata basis (i) at $1,000 per Trust Security, plus
accrued and unpaid distributions to the date of repayment (in the case of
repayment at maturity) or (ii) at the applicable Redemption Price (in the case
of payment on redemption), Trust Securities having an aggregate liquidation
amount equal to the aggregate principal amount of the Subordinated Debt
Securities so repaid or redeemed; provided, however, that holders of such Trust
Securities shall be given not less than 30 nor more than 60 days' notice of such
redemption (other than at the scheduled maturity of the Subordinated Debt
Securities). See "Description of the Subordinated Debt Securities
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- -- Redemption." In the event that fewer than all of the outstanding Capital
Securities are to be redeemed, Capital Securities held in book-entry form will
be redeemed in accordance with the procedures of DTC as described under " --
Book-Entry Only Issuance -- The Depository Trust Company."
TAX EVENT REDEMPTION
"Tax Event" means the receipt by the Trustees of an opinion of
a nationally recognized independent tax counsel to the Company experienced in
such matters to the effect that, as a result of (a) any amendment to
clarification of or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) any judicial decision or
official administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (c) any amendment
to, clarification of or change in the administrative position or interpretation
of any Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental agency or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification or change is effective or such Administrative Action or decision
is announced, in each case, on or after the date of this Prospectus, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90 days
of the date thereof, subject to United States federal income tax with respect to
interest accrued or received on the Subordinated Debt Securities or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges, (ii) any portion of interest payable by the Company to the Trust on the
Subordinated Debt Securities is not, or within 90 days of the date thereof will
not be, deductible by the Company for United States federal income tax purposes,
or (iii) the Company could become liable to pay, on the next date on which any
amount would be payable with respect to the Subordinated Debt Securities, any
Additional Interest (as defined herein).
If, at any time, a Tax Event should occur and be continuing,
and the Company receives an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a result
of such Tax Event, there is more than an insubstantial risk that the Company
would be precluded from deducting the interest on the Subordinated Debt
Securities for United States federal income tax purposes, even if the
Subordinated Debt Securities were distributed to the holders of Trust Securities
in liquidation of such holders' interests in the Trust as described in "--
Liquidation Distribution Upon Dissolution," the Company shall have the right at
any time, within 90 days following the occurrence of such Tax Event, upon not
less than 30 nor more than 60 days' notice, to redeem the Subordinated Debt
Securities, in whole or in part, for cash so long as such Tax Event is
continuing, at par plus any accrued and unpaid interest thereon to the date of
redemption (the "Tax Event Redemption") and, following such redemption, Trust
Securities with an aggregate liquidation amount equal to the aggregate principal
amount of the Subordinated Debt Securities so redeemed shall be redeemed by the
Trust at the applicable Redemption Price; provided, however, that if at the time
there is available to the Company or the Trust the opportunity to eliminate,
within such 90-day period and before any such notice is given, the adverse
effects of the Tax Event by taking some ministerial action, such as filing a
form or making an election or pursuing some other similar reasonable measure
that will have no adverse effect on the Trust, the Company or the holders of the
Trust Securities, the Company or the Trust will pursue such measure in lieu of
redemption.
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REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding
Capital Securities unless all accrued and unpaid distributions have been paid on
all such Capital Securities for all semiannual distribution periods terminating
on or prior to the date of redemption.
If the Trust gives a notice of redemption in respect of
Capital Securities (which notice will be irrevocable), then on the redemption
date, provided that the Institutional Trustee has a sufficient amount of cash in
connection with the related redemption or maturity of the Subordinated Debt
Securities, the Institutional Trustee will irrevocably deposit with the
Depositary or its nominee funds sufficient to pay the applicable Redemption
Price and will give the Depositary irrevocable instructions and authority to pay
such Redemption Price to the holders of such Capital Securities. See "--
Book-Entry Only Issuance -- The Depository Trust Company." With respect to
Capital Securities that are certificated securities, provided that the Company
has paid to the Institutional Trustee a sufficient amount of cash in connection
with the related redemption or maturity of the Subordinated Debt Securities, the
Institutional Trustee will pay the applicable Redemption Price to the holders of
such Capital Securities by check mailed to the address of each such holder
appearing on the books and records of the Trust on the redemption date. If
notice of redemption shall have been given and funds deposited as required,
then, immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue on the Capital Securities and all rights of
holders of such Capital Securities will cease, except the right of the holders
of such Capital Securities to receive the applicable Redemption Price but
without interest on such Redemption Price. In the event that any date fixed for
redemption of Capital Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of Capital Securities is
improperly withheld or refused and not paid either by the Institutional Trustee
or by the Company pursuant to the Guarantee, distributions on such Capital
Securities will continue to accrue at the then applicable rate from the original
redemption date to the actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
In the event that fewer than all of the outstanding Trust
Securities are to be redeemed, Trust Securities will be redeemed on a pro rata
basis in accordance with the procedures of DTC as described under "-- Book-Entry
Only Issuance -- The Depository Trust Company."
In the event of any redemption of Capital Securities in part,
the Trust shall not be required to (i) issue, register the transfer of or
exchange any certificated security during a period beginning at the opening of
business 15 days before any selection for redemption of Capital Securities and
ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all holders of Capital
Securities to be so redeemed or (ii) register the transfer of or exchange any
certificated securities so selected for redemption, in whole or in part, except
for the unredeemed portion of any certificated securities being redeemed in
part.
Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided that the
acquiror is not the holder of the Common Securities or the obligor under the
Subordinated Debt Securities, the Company or its subsidiaries may at any time,
and from time to time, purchase outstanding Capital Securities by tender, in the
open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of the voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust (each a "Liquidation") other
than in connection with a redemption of the Subordinated Debt Securities as
previously described, the holders of the Capital Securities will be entitled to
receive out of the assets of the Trust, after satisfaction of liabilities to
creditors of the Trust (to the extent not satisfied by the Company),
distributions in an amount equal to the aggregate of the stated liquidation
amount of $1,000 per Capital Security plus accrued and unpaid distributions
thereon to the date of payment (the "Liquidation Distribution"), unless, in
connection with such Liquidation, Subordinated Debt Securities in an aggregate
stated principal amount equal to the aggregate stated liquidation amount of the
Trust Securities have been distributed on a pro rata basis to the holders of the
Trust Securities in exchange for the Trust Securities. Upon any Liquidation in
which the Subordinated Debt Securities are distributed, if at the time of such
Liquidation the Capital Securities are rated by at least one nationally
recognized statistical rating organization, the Company will
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use its best efforts to obtain from at least one nationally recognized
statistical rating organization a rating for the Subordinated Debt Securities.
The Company, as the holder of all of the Common Securities,
has the right at any time to dissolve the Trust (including, without limitation,
upon the occurrence of a Tax Event) and, after satisfaction of liabilities to
creditors of the Trust (to the extent not satisfied by the Company), cause the
Subordinated Debt Securities to be distributed to the holders of the Trust
Securities on a pro rata basis in accordance with the aggregate stated
liquidation amount thereof, in liquidation of the Trust.
Pursuant to the Declaration, the Trust shall dissolve on the
first to occur of (i) January 15, 2052, the expiration of the term of the Trust,
(ii) the bankruptcy of the Company, (iii) (other than in connection with a
merger, consolidation or similar transaction not prohibited by the Indenture,
the Declaration or the Guarantee, as the case may be) the filing of a
certificate of dissolution or its equivalent with respect to the Company, upon
the consent of the holders of at least a majority in liquidation amount of the
Trust Securities voting together as a single class to file a certificate of
cancellation with respect to the Trust, or upon the revocation of the charter of
the Company and the expiration of 90 days after the date of revocation without a
reinstatement thereof, (iv) the distribution of the Subordinated Debt Securities
to the holders of the Trust Securities upon exercise of the right of the holder
of all of the outstanding Common Securities of the Trust to dissolve the Trust
as described above, (v) the entry of a decree of judicial dissolution of the
Company or the Trust, or (vi) upon the redemption of all of the Trust
Securities. Pursuant to the Declaration, as soon as practicable after the
dissolution of the Trust and upon completion of the winding up of the Trust, the
Trust shall terminate upon the filing of a certificate of cancellation.
If a Liquidation occurs as described in clause (i), (ii),
(iii) or (v) of the preceding paragraph, the Trust shall be liquidated by the
Trustees as expeditiously as such Trustees determine to be possible by
distributing to the holders of the Trust Securities, after satisfaction of
liabilities to creditors of the Trust, to the extent not satisfied by the
Company, the Subordinated Debt Securities, unless such distribution is
determined by the Institutional Trustee not to be practical, in which event such
holders will be entitled to receive out of the assets of the Trust available for
distribution to holders, after satisfaction of liabilities to creditors of the
Trust, to the extent not satisfied by the Company, an amount equal to the
Liquidation Distribution. An early Liquidation of the Trust pursuant to clause
(iv) above shall occur only if the Institutional Trustee determines that such
Liquidation is possible by distributing the Subordinated Debt Securities to the
holders of the Trust Securities, after satisfaction of liabilities of creditors
of the Trust, to the extent not satisfied by the Company.
If, upon any such Liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on such Capital Securities shall be paid to the holders of
the Trust Securities on a pro rata basis. The holders of the Common Securities
issued by the Trust will be entitled to receive distributions upon any such
Liquidation pro rata with the holders of such Capital Securities, except that if
a Declaration Event of Default has occurred and is continuing in respect of the
Trust, the Capital Securities shall have a preference over the Common Securities
with regard to such distributions.
After the date for any distribution of Subordinated Debt
Securities upon dissolution of the Trust, (i) the Trust Securities will be
deemed to be no longer outstanding, (ii) the Depositary (as defined herein) or
its nominee, as the record holder of the Capital Securities issued in book-entry
form, will receive a registered Global Certificate (as defined herein) or
Certificates representing the Subordinated Debt Securities to be delivered upon
such distribution, and (iii) any certificates representing Capital Securities
not held by the Depositary or its nominee will be deemed to represent undivided
beneficial interests in Subordinated Debt
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Securities having an aggregate principal amount equal to the aggregate stated
liquidation amount of such Capital Securities until such certificates are
presented to the Company or its agent for transfer or reissuance.
There can be no assurance as to the market prices for either
the Capital Securities or the Subordinated Debt Securities that may be
distributed in exchange for the Capital Securities if a dissolution and
liquidation of the Trust were to occur. Accordingly, the Capital Securities that
an investor may purchase, whether in the secondary market or otherwise, or the
Subordinated Debt Securities that an investor may receive if a dissolution and
liquidation of the Trust were to occur, may trade at a discount to the price
paid to purchase the Capital Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture in respect of the
Subordinated Debt Securities (an "Indenture Event of Default") constitutes an
event of default under the Declaration with respect to the Trust Securities
(each a "Declaration Event of Default"); provided that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to such Common Securities until
all Declaration Events of Default with respect to the Capital Securities have
been cured, waived or otherwise eliminated. Until such Declaration Events of
Default have been so cured, waived, or otherwise eliminated, the Institutional
Trustee will be deemed to be acting solely on behalf of the holders of the
Capital Securities and only the holders of such Capital Securities will have the
right to direct the Institutional Trustee with respect to certain matters under
the Declaration, and therefore the Indenture. The holders of a majority in
liquidation amount of the Capital Securities will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Institutional Trustee or to direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee to exercise the remedies available to
it as holder of the Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under the Subordinated Debt Securities after the
holders of a majority in liquidation amount of such Capital Securities have so
directed the Institutional Trustee, a holder of record of such Capital
Securities may, to the fullest extent permitted by law, institute a legal
proceeding against the Company to enforce the Institutional Trustee's rights
under the Subordinated Debt Securities without first instituting any legal
proceeding against the Institutional Trustee or any other person or entity.
Notwithstanding the foregoing, if a Declaration Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal (or premium, if any) on the Subordinated Debt
Securities on the respective dates such interest or principal (or premium, if
any) is payable (or in the case of redemption, the redemption date), then a
holder of record of such Capital Securities may institute a Direct Action
against the Company for payment, on or after the respective due dates specified
in the Subordinated Debt Securities, to such holder directly of the principal of
(or premium, if any) or interest on Subordinated Debt Securities having an
aggregate principal amount equal to the aggregate liquidation amount of the
Capital Securities of such holder. In connection with such Direct Action, the
Company will be subrogated to the rights of such holder of Capital Securities
under the Declaration to the extent of any payment made by the Company to such
holder of Capital Securities in such Direct Action; provided, however, that no
such subrogation right may be exercised so long as a Declaration Event of
Default has occurred and is continuing. The holders of Capital Securities will
not be able to exercise directly any other remedy available to the holders of
the Subordinated Debt Securities.
Upon the occurrence of a Declaration Event of Default, the
Institutional Trustee, so long as it is the sole holder of the Subordinated Debt
Securities, will have the right under the Indenture to declare the principal of
(or premium, if any) and interest on the Subordinated Debt Securities to be
immediately due and payable. The Company and the Trust are each required to file
annually with the Institutional Trustee an officer's certificate as to its
compliance with all conditions and covenants under the Declaration.
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VOTING RIGHTS
Except as described below, under the Trust Act and under " --
Removal of Trustees; Appointment of Successors" and "Description of the
Guarantee -- Modification of the Guarantee; Assignment," and as otherwise
required by law and the Declaration, the holders of the Capital Securities will
have no voting rights.
Subject to the requirements set forth in this paragraph, the
holders of a majority in aggregate liquidation amount of the Capital Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Institutional Trustee, or exercising any trust
or power conferred upon such Institutional Trustee under the Declaration,
including the right to direct such Institutional Trustee, as holder of the
Subordinated Debt Securities, to (i) exercise the remedies available to it under
the Indenture as a holder of the Subordinated Debt Securities, (ii) waive any
past default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Subordinated Debt
Securities shall be due and payable or (iv) consent on behalf of all the holders
of the Capital Securities of the Trust to any amendment, modification or
termination of the Indenture or the Subordinated Debt Securities where such
consent shall be required; provided, however, that where a consent or action
under the Indenture would require the consent or act of holders of more than a
majority in principal amount of the Subordinated Debt Securities (a
"Super-Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the holders of at least
the proportion in aggregate liquidation amount of the Capital Securities
outstanding which the relevant Super-Majority represents of the aggregate
principal amount of the Subordinated Debt Securities outstanding. If the
Institutional Trustee fails to enforce its rights under the Subordinated Debt
Securities after the holders of a majority in liquidation amount of such Capital
Securities have so directed the Institutional Trustee, a holder of record of the
Capital Securities may, to the fullest extent permitted by law, institute a
legal proceeding directly against the Company to enforce the Institutional
Trustee's rights under the Subordinated Debt Securities without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity. Notwithstanding the foregoing, if a Declaration Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal (or premium, if any) on the
Subordinated Debt Securities on the respective dates such interest or principal
(or premium, if any) is payable (or in the case of redemption, the redemption
date), then a holder of record of Capital Securities may institute a Direct
Action against the Company for payment, on or after the respective due dates
specified in the Subordinated Debt Securities, to such holder directly of the
principal of (or premium, if any) or interest on the Subordinated Debt
Securities having an aggregate principal amount equal to the aggregate
liquidation amount of the Capital Securities of such holder. The Institutional
Trustee shall notify all holders of the Capital Securities of any default
actually known to the Institutional Trustee with respect to the Subordinated
Debt Securities unless (x) such default has been cured prior to the giving of
such notice or (y) the Institutional Trustee determines in good faith that the
withholding of such notice is in the interest of the holders of such Capital
Securities, except where the default relates to the payment of interest or
principal of (or premium, if any) on any of the Subordinated Debt Securities.
Such notice shall state that such Indenture Event of Default also constitutes a
Declaration Event of Default. Except with respect to directing the time, method
and place of conducting a proceeding for a remedy, the Institutional Trustee
shall not take any of the actions described in clauses (i), (ii) or (iii) above
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that, as a result of such action, the Trust will not be classified as
other than a grantor trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the
holder of the Subordinated Debt Securities, is required under the Indenture with
respect to any amendment, modification or termination of the Indenture, such
Institutional Trustee shall request the direction of the holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or
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termination as directed by a majority in liquidation amount of such Trust
Securities voting together as a single class; provided, however, that where a
consent under the Indenture would require the consent of a Super-Majority, the
Institutional Trustee may only give such consent at the direction of the holders
of at least the proportion in liquidation amount of such Trust Securities
outstanding which the relevant Super-Majority represents of the aggregate
principal amount of the Subordinated Debt Securities outstanding. The
Institutional Trustee shall not take any such action in accordance with the
directions of the holders of such Trust Securities unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action, the Trust will not be classified as other than a grant or trust
for United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a
waiver of the corresponding Declaration Event of Default.
Any required approval or direction of holders of Capital
Securities may be given at a separate meeting of such holders convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Institutional Trustee will cause a notice of any meeting at
which holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be mailed to
each holder of record of the Capital Securities. Each such notice will include a
statement setting forth the following information: (i) the date of such meeting
or the date by which such action is to be taken; (ii) a description of any
resolution proposed for adoption at such meeting on which such holders are
entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Capital Securities will be required for the Trust to redeem
and cancel the Capital Securities or distribute the Subordinated Debt Securities
in accordance with the Declaration.
Notwithstanding that holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned at such time by the Company or any
entity directly or indirectly controlling or controlled by, or under direct or
indirect common control with, the Company, shall not entitle the holders thereof
to vote or consent and shall, for purposes of such vote or consent, be treated
as if such Capital Securities were not outstanding.
The procedures by which holders of Capital Securities issued
in book-entry form may exercise their voting rights are described below. See "--
Book-Entry Only Issuance -- The Depository Trust Company" below.
REMOVAL OF TRUSTEES; APPOINTMENT OF SUCCESSORS
Unless an Indenture Event of Default shall have occurred and
be continuing, any Trustee may be removed at any time and its successor
appointed by the holder of a majority of the Common Securities. If an Indenture
Event of Default has occurred and is continuing, a Trustee may be removed and
its successor appointed by the holders of at least a majority in liquidation
amount of Capital Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrators, which voting rights are vested exclusively in the Company as the
holder of the Common Securities. No resignation or removal of a Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
Declaration.
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CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust's property may at the time be located, the Company, as the holder
of a majority of the Common Securities, and the Administrators shall have power
to appoint one or more persons either to act as a co-trustee, jointly with the
Institutional Trustee, of all or any part of such Trust's property, or to act as
a separate trustee of any such property, in either case with such powers as may
be provided in the instrument of appointment, and to vest in such person or
persons in such capacity any property, title, right or power deemed necessary or
desirable, subject to the provisions of the Declaration. In case an Indenture
Event of Default has occurred and is continuing, the Institutional Trustee alone
shall have power to make such appointment.
MODIFICATION OF THE DECLARATION
The Declaration may be amended from time to time by the
Institutional Trustee and the holders of a majority of the Common Securities
without the consent of the holders of the Capital Securities to: (i) cure any
ambiguity; (ii) correct or supplement any provision in such Declaration that may
be defective or inconsistent with any other provision of such Declaration; (iii)
add to the covenants, restrictions or obligations of the Company; (iv) modify,
eliminate or add to any provision of the Declaration to such an extent as may be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes at all times as a grantor trust and will not be required to
register as an "investment company" under the Investment Company Act of 1940, as
amended (the "1940 Act"); and (v) modify, eliminate and add to any provision of
such Declaration, provided that no such modification, elimination or addition
referred to in clauses (i), (ii) and (iii) hereof shall adversely affect the
powers, preferences or special rights of the holders of such Capital Securities
so long as they remain outstanding.
In addition, the Declaration may be modified and amended if
approved by the Institutional Trustee and the holders of a majority of the
Common Securities (and in certain circumstances the Delaware Trustee), provided
that, if any proposed amendment provides for, or the Institutional Trustee
otherwise proposes to effect, (i) any action that would materially adversely
affect the powers, preferences or special rights of the Trust Securities,
whether by way of amendment to the Declaration or otherwise or (ii) the
Liquidation of the Trust other than pursuant to the terms of the Declaration,
then the holders of the Trust Securities voting together as a single class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of the holders of at least a
majority in liquidation amount of the Trust Securities affected thereby;
provided that if any amendment or proposal referred to in clause (i) above would
materially adversely affect only the Capital Securities or only the Common
Securities,then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a majority in liquidation amount of such class of
Trust Securities.
Notwithstanding the foregoing, no amendment or modification
may be made to the Declaration if such amendment or modification would (i) cause
the Trust to be classified for purposes of United States federal income taxation
as other than a grantor trust or (ii) cause the Trust to be deemed an
"investment company" which is required to be registered under the 1940 Act.
Notwithstanding any provision of the Declaration, the
provisions of Section 316(b) of the Trust Indenture Act incorporated by
reference into the Declaration provides that the right of any holder of Capital
Securities to receive payments of distributions and other payments upon
redemption or otherwise on or after their respective due dates, or to institute
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such holder.
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MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below or as otherwise described in "-- Liquidation Distribution upon
Dissolution." The Trust may, at the request of the holders of a majority of the
Common Securities without the consent of the holders of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by, a trust
organized as such under the laws of any State of the United States; provided
that (i) if the Trust is not the survivor, such successor entity either (x)
expressly assumes all of the obligations of the Trust under the Trust Securities
or (y) substitutes for the Trust Securities other securities having
substantially the same terms as the Trust Securities (the "Successor
Securities"), so that the Successor Securities rank the same as the Trust
Securities rank with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) a trustee of such successor entity possessing the
same powers and duties as the Institutional Trustee is appointed as the holder
of the Subordinated Debt Securities, (iii) the Capital Securities or any
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with another
organization on which such Capital Securities are then listed or quoted, if any,
(iv) such merger, consolidation, amalgamation or replacement does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of such Trust Securities (including
any Successor Securities) in any material respect (other than with respect to
any dilution of the holders' interest in such successor entity), (vi) such
successor entity has a purpose substantially identical to that of the Trust,
(vii) prior to such merger, consolidation, amalgamation or replacement, the
Trust has received an opinion of a nationally recognized independent counsel to
the Trust experienced in such matters to the effect that (A) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in such successor entity), (B) following such
merger, consolidation, amalgamation or replacement, neither the Trust nor such
successor entity will be required to register as an investment company under the
1940 Act and (C) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor such successor entity will be classified as
other than a grantor trust for United States federal income tax purposes, and
(viii) the Company guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in liquidation amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by, any other entity or permit
any other entity to consolidate, amalgamate, merge with or into, or replace it,
if such consolidation, amalgamation, merger or replacement would cause the Trust
or the successor entity to be classified as other than a grantor trust for
United States federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The description of book-entry procedures in this Prospectus
includes summaries of certain rules and operating procedures of DTC that affect
transfers of interests in the global certificate or certificates issued in
connection with sales of Capital Securities. Except as described in the next
paragraph, the Capital Securities will be issued only as fully registered
securities registered in the name of Cede & Co. (as nominee for DTC). One or
more fully registered global Capital Security certificates (the "Global
Certificates") will be issued, representing, in the aggregate, the New Capital
Securities, and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Capital
Securities as represented by a Global Certificate.
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DTC has advised the Company and the Trust that it is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Exchange Act. DTC holds securities that
its participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants" accounts, thereby eliminating the need for physical
movement of securities certificates. Participants in DTC include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others, such as securities brokers and
dealers, banks and trust companies that clear transactions through or maintain a
direct or indirect custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Participants are on file with the Commission.
Purchases of Capital Securities within the DTC system must be
made by or through Direct Participants, which will receive a credit for the
Capital Securities on DTC's records. The ownership interest of each actual
purchaser of each Capital Security ("Beneficial Owner") is in turn to be
recorded on the Direct Participants' and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their
purchases, but Beneficial Owners are expected to receive written confirmations
providing details of the transactions, as well as periodic statements of their
holdings, from the Director Indirect Participants through which the Beneficial
Owners purchased Capital Securities. Transfers of ownership interests in the
Capital Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in the Capital
Securities, except in the event that use of the book-entry system for the
Capital Securities is discontinued.
To facilitate subsequent transfers, all the Capital Securities
deposited by Participants with DTC will be registered in the name of DTC's
nominee, Cede & Co. The deposit of Capital Securities with DTC and their
registration in the name of Cede & Co. will effect no change in beneficial
ownership. DTC will have no knowledge of the actual Beneficial Owners of the
Capital Securities. DTC's records will reflect only the identity of the Direct
Participants to whose accounts such Capital Securities are credited, which may
or may not be the Beneficial Owners. The Direct Participants and Indirect
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
So long as DTC, or its nominee, is the registered owner or
holder of a Global Certificate in respect of the Capital Securities, DTC or such
nominee, as the case may be, will be considered the sole owner or holder of the
Capital Securities represented thereby for all purposes under the Declaration
and such Capital Securities. No Beneficial Owner of an interest in a Global
Certificate will be able to transfer that interest except in accordance with
DTC's applicable procedures.
DTC has advised the Company that it will take any action
permitted to be taken by a holder of Capital Securities (including the
presentation of Capital Securities for exchange as described below) only at the
direction of one or more Participants to whose accounts the DTC interests in the
Global Certificates are credited and only in respect of such portion of the
aggregate liquidation amount of Capital Securities as to which such Participant
or Participants has or have given such direction. However, if there is a
Declaration Event of Default with respect to the Capital Securities, DTC will,
upon notice, exchange the Global Certificates in respect of such Capital
Securities for certificated securities, which it will distribute to its
Participants.
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Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices in respect of the Capital Securities held
in book-entry form will be sent to Cede & Co. If less than all of the Capital
Securities are being redeemed, the Capital Securities will be redeemed on a pro
rata basis.
Although voting with respect to the Capital Securities is
limited, in those cases where a vote is required, neither DTC nor Cede & Co.
will itself consent or vote with respect to the Capital Securities. Under its
usual procedures, DTC would mail an omnibus proxy to the Trust as soon as
possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts the
Capital Securities are credited on the record date (identified in a listing
attached to the omnibus proxy).
Distributions on the Capital Securities held in book-entry
form will be made to DTC in immediately available funds. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Direct Participants and Indirect Participants and not of
DTC, the Trust or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of distributions to
DTC is the responsibility of the Trust, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct Participants and Indirect
Participants.
Except as provided herein, a Beneficial Owner of an interest
in a Global Certificate will not be entitled to receive physical delivery of
Capital Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC, the Direct Participants and the Indirect Participants to
exercise any rights under the Capital Securities.
Although DTC has agreed to the foregoing procedures in order
to facilitate transfers of interests in the Global Certificates among
Participants of DTC, DTC is under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued at any time.
None of the Company, the Trust or the Trustees will have any responsibility for
the performance by DTC or its Direct Participants or Indirect Participants under
the rules and procedures governing DTC. DTC may discontinue providing its
services as a securities depositary with respect to the Capital Securities at
any time by giving notice to the Trust. Under such circumstances, in the event
that a successor securities depositary is not obtained, Capital Security
certificates will be required to be printed and delivered. Additionally, the
Trust (with the consent of the Company) may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary) with
respect to the Capital Securities of the Trust. In that event, certificates for
such Capital Securities will be printed and delivered.
The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company and the Trust
believes to be reliable, but neither the Company nor the Trust takes
responsibility for the accuracy thereof.
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RESTRICTIONS ON TRANSFER
The Old Capital Securities have been issued and may be
transferred only in blocks having a stated liquidation amount of not less than
$100,000 (100 Old Capital Securities). Any such transfer of Old Capital
Securities in a block having a stated liquidation amount of less than $100,000
shall be deemed to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Old Capital Securities
for any purpose, including but not limited to the receipt of distributions on
such Old Capital Securities, and such transferee shall be deemed to have no
interest whatsoever in such Old Capital Securities. The New Capital Securities
will not be so restricted.
PAYMENT AND PAYING AGENCY
Payments in respect of the Capital Securities represented by
the Global Certificates shall be made to DTC, which shall credit the relevant
accounts at DTC on the applicable distribution payment dates or, in the case of
certificated securities in non-book entry form, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address shall
appear on books and records of the Trust. The paying agent for the Trust
Securities (the "Paying Agent") shall initially be The Chase Manhattan Bank. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Institutional Trustee, the Administrators and the Company. In the
event that The Chase Manhattan Bank shall no longer be the Paying Agent, the
Administrators shall appoint a successor to act as Paying Agent (which shall be
a bank or trust company acceptable to the Company).
REGISTRAR AND TRANSFER AGENT
The Institutional Trustee will act as registrar and transfer
agent for the Capital Securities of the Trust.
Registration of transfers or exchanges of Capital Securities
will be effected without charge by or on behalf of the Trust, but upon payment
(with the giving of such indemnity as the Trust or the Company may require) in
respect of any tax or other government charges which may be imposed in relation
to it.
The Trust will not be required to register or cause to be
registered the transfer or exchange of Capital Securities after such Capital
Securities have been called for redemption.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a
default with respect to the Trust Securities and after the curing of any
defaults that may have occurred, undertakes to perform only such duties as are
specifically set forth in the Declaration and, after default, shall exercise
such of the rights and powers vested in it by such Declaration, and use the same
degree of care and skill in their exercise, as a prudent individual would
exercise or use in the conduct of his or her own affairs. Subject to such
provisions, the Institutional Trustee is under no obligation to exercise any of
the powers vested in it by the Declaration at the request of any holder of
Capital Securities, unless offered reasonable indemnity by such holder against
the costs, expenses and liabilities which might be incurred thereby. The holders
of Capital Securities will not be required to offer such indemnity in the event
such holders, by exercising their voting rights, direct the Institutional
Trustee to take any action it is empowered to take under the Declaration
following a Declaration Event of Default. The Institutional Trustee also serves
as trustee under the Guarantee and the Indenture.
Whenever in the exercise of its rights or powers or the
performance of its duties under the Declaration the Institutional Trustee shall
deem it desirable to receive instructions with respect to enforcing any
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remedy or right or taking any other action thereunder, the Institutional Trustee
(i) may request instructions from the holders of the Capital Securities, which
instructions may only be given by the holders of a majority, or such other
proportion, in liquidation amount of the Capital Securities as would be entitled
to direct the Institutional Trustee under the terms of such Capital 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 on
or in accordance with such instructions.
The Company and certain of its affiliates maintain a banking
relationship with the Institutional Trustee and its affiliates.
GOVERNING LAW
The Declaration and the Capital Securities are governed by,
and construed in accordance with, the laws of the State of Delaware, without
regard to principles of conflict of laws.
MISCELLANEOUS
The Administrators, the holders of a majority of the Common
Securities and the Institutional Trustee are authorized and directed to operate
the Trust in such a way so that the Trust will not be required to register as an
"investment company" under the 1940 Act nor be characterized as other than a
grantor trust for United States federal income tax purposes. The Company has
agreed to conduct its affairs so that the Subordinated Debt Securities will be
treated as indebtedness of the Company for United States federal income tax
purposes. In this connection, the Institutional Trustee and the holders of a
majority of the Common Securities are authorized to take any action, not
inconsistent with applicable law or the Declaration, that the Institutional
Trustee and such holders of Common Securities determine in their discretion to
be necessary or desirable to achieve such end, even if such action adversely
affects the interests of the holders of the Capital Securities.
Holders of the Capital Securities have no preemptive or
similar rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the
Guarantee which has been executed and delivered for the benefit of the holders
from time to time of the Capital Securities. The Chase Manhattan Bank is acting
as Guarantee Trustee under the Guarantee. The New Guarantee has been qualified
under the Trust Indenture Act. This summary of the material terms of the
Guarantee does not purport to be complete and is subject in all respects to the
provisions of, and is qualified in its entirety by reference to, the Guarantee
(a copy of which has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part). The Guarantee will be held by the Guarantee
Trustee for the benefit of the holders of the Capital Securities of the Trust.
GENERAL
Pursuant to the Guarantee, the Company has irrevocably and
unconditionally agreed, to the extent set forth therein, to pay in full, to the
holders of the Capital Securities, the Guarantee Payments (as defined herein)
(except to the extent paid by the Trust), as and when due, regardless of any
defense, right of set-off or counterclaim which the Trust may have or assert.
The following payments with respect to Capital Securities, to the extent not
paid by the Trust (the "Guarantee Payments"), are subject to the Guarantee
(without duplication): (i) any accrued and unpaid distributions which are
required to be paid on Capital Securities, to the extent the Trust shall have
funds available therefor; (ii) the Redemption Price, to the extent the Trust has
funds
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available therefor, with respect to any Capital Securities called for redemption
by the Trust and (iii) upon Liquidation of the Trust (other than in connection
with the distribution of Subordinated Debt Securities to the holders of the
Capital Securities in exchange therefor), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on such Capital
Securities to the date of payment, to the extent the Trust has funds available
therefor, and (b) the amount of assets of the Trust remaining available for
distribution to holders of such Capital Securities in liquidation of the Trust.
The Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of Capital
Securities or by causing the Trust to pay such amounts to such holders.
The Guarantee does not apply to any payment of distributions
except to the extent the Trust shall have funds available therefor, which funds
will not be available except to the extent the Company has made payments of
interest (or premium, if any) or principal or other payments on the Subordinated
Debt Securities purchased by the Trust. See "Description of the Subordinated
Debt Securities -- Certain Covenants." The Guarantee, when taken together with
the Company's obligations under the Subordinated Debt Securities, the
Declaration and the Indenture, including its obligations to pay costs, expenses,
debts and other obligations of the Trust (other than with respect to the Trust
Securities), provides a full and unconditional guarantee on a subordinated basis
by the Company of payments due on the Capital Securities.
Because the Guarantee is a guarantee of payment and not of
collection, holders of the Capital Securities may proceed directly against the
Company, rather than having to proceed against the Trust before attempting to
collect from the Company, and the Company waives any right or remedy to require
that any action be brought against the Trust or any other person or entity
before proceeding against the Company. Such obligations will not be discharged
except by payment of the Guarantee Payments in full. The Guarantee has been
deposited with the Guarantee Trustee to be held for the benefit of the holders
of Capital Securities. Except as otherwise noted herein, the Guarantee Trustee
has the right to enforce the Guarantee on behalf of the holders of the Capital
Securities.
The Company has also agreed separately to irrevocably and
unconditionally guarantee the obligations of the Trust with respect to Common
Securities (the "Common Securities Guarantee") to the same extent as the
Guarantee, except that upon the occurrence and continuance of an event of
default under the Declaration, holders of Capital Securities shall have priority
over holders of Common Securities with respect to any payments made by the
Company on or in respect of the Trust Securities under the Guarantee and the
Common Securities Guarantee.
CERTAIN COVENANTS OF THE COMPANY UNDER THE GUARANTEE
In the Guarantee, the Company has covenanted that, so long as
any Capital Securities remain outstanding, if the Company shall be in default
under the Guarantee or there shall have occurred and be continuing any event
that would constitute an event of default under the Declaration, then (a) the
Company shall not declare or pay any dividend on, make a distribution with
respect to, or redeem, purchase or make a liquidation payment with respect to,
any of the Company's capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of the Company's capital
stock or rights to acquire such capital stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or any other contractual obligations of the Company (other than a contractual
obligation ranking pari passu with or junior to the Subordinated Debt
Securities), (ii) as a result of a reclassification of the Company's capital
stock or rights to acquire such capital stock or the exchange or conversion of
one class or series of the Company's capital stock or rights to acquire such
capital stock for another class or series of the Company's capital stock or
rights to acquire such capital stock, (iii) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security
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being converted or exchanged, (iv) dividends and distributions made on the
Company's capital stock or rights to acquire such capital stock with the
Company's capital stock or rights to acquire such capital stock, or (v) any
declaration of a dividend in connection with the implementation of a shareholder
rights plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto), or make guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu with or junior
to the Subordinated Debt Securities (other than payments under the Guarantee and
the Common Securities Guarantee) and (b) the Company shall not make any payment
of interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company that rank pari passu with or junior to the
Subordinated Debt Securities.
MODIFICATION OF THE GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely
affect the rights of holders of the Capital Securities in any material respect
(in which case no vote of such holders will be required), the Guarantee may be
amended only with the prior approval of the holders of not less than a majority
in liquidation amount of the outstanding Capital Securities. All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Capital Securities then outstanding.
TERMINATION
The Guarantee will terminate as to the Capital Securities (a)
upon full payment of the Redemption Price of all Capital Securities, (b) upon
distribution of the Subordinated Debt Securities to the holders of all of the
Capital Securities or (c) upon full payment of the amounts payable in accordance
with the Declaration upon dissolution of the Trust. The Guarantee will continue
to be effective or will be reinstated, as the case may be, if at any time any
holder of Capital Securities must restore payment of any sums paid under such
Capital Securities or Guarantee.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder; provided, however, that, other than with respect to a default on any
payment under the Guarantee, the Company shall have received notice of default
and shall not have cured such default within 90 days after receipt of such
notice.
The holders of a majority in liquidation amount of the Capital
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 the
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee. A holder of record of the Capital
Securities may institute a legal proceeding directly against the Company to
enforce the Guarantee Trustee's rights under the Guarantee, without first
instituting a legal proceeding against the Trust, the Guarantee Trustee or any
other person or entity. Pursuant to the Guarantee, the Company will waive any
right or remedy to require that any action be brought first against the Trust or
any other person or entity before proceeding directly against the Company.
STATUS OF THE GUARANTEE
The Company's obligations under the Guarantee are subordinate
and junior in right of payment to all present and future Senior Indebtedness of
the Company and are also effectively subordinated to claims of creditors of the
Company's subsidiaries. The terms of the Capital Securities provide that each
holder of Capital
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Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Guarantee relating thereto. The right of the Company to
participate in any distribution of assets of any of its subsidiaries upon such
subsidiary's liquidation or reorganization or otherwise is subject to the prior
claims of creditors of that subsidiary, except to the extent the Company may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Guarantee are effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, and claimants
should look only to the assets of the Company for payments thereunder. The
Guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, including Senior Indebtedness of the Company,
under any indenture that the Company may enter into in the future or otherwise.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default
with respect to the Guarantee, undertakes to perform only such duties as are
specifically set forth in such Guarantee and, after default, shall exercise such
of the rights and powers vested in it by such Guarantee, and use the same degree
of care and skill in their exercise, as a prudent individual would exercise or
use in the conduct of his or her own affairs. Subject to such provisions, the
Trustee is under no obligation to exercise any of the powers vested in it by the
Guarantee at the request of any holder of Capital Securities, unless offered
reasonable indemnity against the costs, expenses and liabilities which might be
incurred thereby.
The Company and certain of its affiliates maintain a banking
relationship with the Guarantee Trustee and its affiliates.
GOVERNING LAW
The Guarantee is governed by and construed in accordance with
the laws of the State of New York, without regard to conflict of laws
principles.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
The Old Subordinated Debt Securities were issued, and the New
Subordinated Debt Securities will be issued, as a separate series under the
Indenture. The Indenture has been qualified under the Trust Indenture Act. Set
forth below is a description of the principal terms of the Subordinated Debt
Securities. The following description does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the description in
the Indenture, dated as of January 21, 1997 (the "Base Indenture"), between the
Company and The Chase Manhattan Bank, as trustee (the "Debt Trustee"), as
supplemented by a First Supplemental Indenture dated as of January 21, 1997 (the
Base Indenture, as so supplemented, is herein referred to as the "Indenture").
Certain capitalized terms used herein are defined in the Indenture. This summary
of the material terms of the Indenture does not purport to be complete and is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to, the Indenture (a copy of which has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part) and those terms
made a part of the Indenture by the Trust Indenture Act.
In certain circumstances, Subordinated Debt Securities may be
distributed to the holders of the Trust Securities in liquidation of the Trust.
See "Description of the Capital Securities -- Liquidation Distribution Upon
Dissolution."
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GENERAL
Concurrently with the issuance of the Old Capital Securities,
the Trust invested the proceeds thereof, together with the consideration paid by
the Company for the Common Securities, in the Old Subordinated Debt Securities
issued by the Company. The old Subordinated Debt Securities were and the New
Subordinated Debt Securities exchanged for the Old Subordinated Debt Securities
under the Exchange Offer will be issued as unsecured debt under the Indenture.
Subordinated Debt Securities will be limited to an amount equal to the sum of
the aggregate stated liquidation amounts of the Trust Securities.
The Subordinated Debt Securities are not subject to a sinking
fund provision. The entire principal amount of the Subordinated Debt Securities
will mature and become due and payable, together with any accrued and unpaid
interest thereon including Compounded Interest (as defined herein) and
Additional Interest (as defined herein), if any, on January 15, 2027.
If the Subordinated Debt Securities are distributed to holders
of Capital Securities in liquidation of such holders' interests in the Trust,
the Subordinated Debt Securities will, with respect to Capital Securities held
in book-entry only form, initially be issued as a Global Security (as defined
herein) having an aggregate principal amount equal to the liquidation amount of
such Capital Securities and, with respect to such Capital Securities held in
certificated non-book entry form, will initially be deemed to be represented by
such certificates and to have an aggregate principal amount equal to the
liquidation amount of such Capital Securities. As described herein, under
certain limited circumstances, Subordinated Debt Securities may be issued in
certificated non-book entry form in exchange for a Global Security. See "--
Book-Entry Issuance and Settlement" below. Subordinated Debt Securities deemed
to be represented by a Capital Security certificate will be issued in
certificated form upon presentation for transfer or reissuance. Payments on
Subordinated Debt Securities issued as a Global Security will be made to DTC, a
successor depositary or, in the event that no depositary is used, to a paying
agent for the Subordinated Debt Securities. In the event Subordinated Debt
Securities are issued in certificated non-book entry form, interest and
principal (and premium, if any) will be payable, the transfer of the
Subordinated Debt Securities will be registrable and Subordinated Debt
Securities will be exchangeable for Subordinated Debt Securities of other
denominations of a like aggregate principal amount at the corporate trust office
of the Debt Trustee in New York, New York; provided that payment of interest may
be made, at the option of the Company, by check mailed to the address of the
holder entitled thereto or by wire transfer to an account appropriately
designated by the holder entitled thereto. Notwithstanding the foregoing, so
long as the holder of any Subordinated Debt Securities is the Institutional
Trustee, the payment of interest and principal (and premium, if any) on the
Subordinated Debt Securities held by the Institutional Trustee will be made at
such place and to such account as may be designated by the Institutional
Trustee.
The Indenture does not contain provisions that afford holders
of the Subordinated Debt Securities protection in the event of a highly
leveraged transaction or other similar transaction involving the Company that
may adversely affect such holders.
SUBORDINATION
The Indenture provides that the Subordinated Debt Securities
are subordinated and junior in right of payment to all present and future Senior
Indebtedness of the Company. No payment of principal (including redemption
payments), premium, if any, or interest on the Subordinated Debt Securities may
be made (in cash, property, securities, by set-off or otherwise) if (i) any
Senior Indebtedness of the Company is not paid
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when due and any applicable grace period with respect to a payment default under
such Senior Indebtedness has ended and such default has not been cured or waived
or ceased to exist or (ii) the maturity of any Senior Indebtedness of the
Company has been accelerated because of a default. Upon any distribution of
assets of the Company to creditors upon any dissolution, winding-up, liquidation
or reorganization, whether voluntary or involuntary, or in bankruptcy,
insolvency, receivership or other proceedings, all principal, premium, if any,
and interest due or to become due on all Senior Indebtedness of the Company must
be paid in full before the holders of Subordinated Debt Securities are entitled
to receive or retain any payment. Upon satisfaction of all claims of all Senior
Indebtedness then outstanding, the rights of the holders of the Subordinated
Debt Securities will be subrogated to the rights of the holders of Senior
Indebtedness of the Company to receive payments or distributions applicable to
Senior Indebtedness until all amounts owing on the Subordinated Debt Securities
are paid in full.
The term "Senior Indebtedness" means, with respect to the
Company (except any other obligations which rank pari passu with or junior to
the Subordinated Debt Securities), (i) the principal, premium, if any, and
interest in respect of (A) indebtedness of the Company for money borrowed, and
(B) indebtedness evidenced by securities, debentures, notes, bonds or other
similar instruments issued by the Company, including, without limitation, any
current of future indebtedness under any indenture (other than the Indenture) to
which the Company is party; (ii) all capital lease obligations of the Company,
(iii) all obligations of the Company issued or assumed as the deferred purchase
price of property, all conditional sale obligations of the Company and all
obligations of the Company under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business), (iv) all
obligations of the Company for the reimbursement on any letter of credit, any
banker's acceptance, any security purchase facility, any repurchase agreement or
similar arrangement, any interest rate swap, any other hedging arrangement, any
obligation under options or any similar credit or other transaction, (v) all
obligations of the type referred to in clauses (i) through (iv) above of other
persons for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise and (vi) all obligations of the type referred to
in clauses (i) through (v) above of other persons secured by any lien on any
property or asset of the Company (whether or not such obligation is assumed by
the Company), except for (1) any indebtedness between or among the Company or
any affiliate of the Company and (2) any other debt securities issued pursuant
to the Indenture and guarantees in respect of those debt securities. Senior
Indebtedness does not include Subordinated Debt Securities or any junior
subordinated debt securities issued in the future with subordination terms
substantially similar to the Subordinated Debt Securities. Senior Indebtedness
shall continue to be Senior Indebtedness and be entitled to the benefits of the
subordination provisions irrespective of any amendment, modification or waiver
of any term of such Senior Indebtedness.
The right of the Company to participate in any distribution of
assets of any subsidiary upon such subsidiary's liquidation or reorganization or
otherwise is subject to the prior claims of creditors of that subsidiary, except
to the extent the Company may itself be recognized as a creditor of that
subsidiary. Accordingly, the Company's obligations under the Subordinated Debt
Securities will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries, and claimants should look only to the
assets of the Company for payments thereunder.
The Indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued by the Company. The amount of Senior
Indebtedness and liabilities and obligations of the Company's subsidiaries that
would be effectively ranked senior to the Guarantee and the Subordinated Debt
Securities (exclusive of Deposits) was approximately $3,805,301,000 at September
30, 1996 and, after giving effect to the issuance of the 7 7/8% Notes in October
1996 and the related repurchase of the 10 3/8% Notes, was approximately
$3,837,391,000 (exclusive of Deposits) at September 30, 1996.
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REDEMPTION
The Company may redeem the Subordinated Debt Securities, in
whole or in part, at any time and from time to time, on or after January 15,
2007 upon not less than 30 nor more than 60 days' notice, at the Call Price
described under "Description of the Capital Securities -- Redemption," plus
accrued and unpaid interest to the redemption date.
In addition, Subordinated Debt Securities may be redeemed by
the Company at any time in certain circumstances upon the occurrence of a Tax
Event as described under "Description of the Capital Securities -- Tax Event
Redemption," upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest to the redemption date.
INTEREST
Subordinated Debt Securities bear interest at the rate of
8.65% per annum, from the original date of issuance of the Old Subordinated Debt
Securities, payable semiannually in arrears on January 15 and July 15 of each
year (each an "Interest Payment Date"), commencing July 15, 1997, to the person
in whose name such Subordinated Debt Security is registered, subject to certain
exceptions, at the close of business on the Business Day next preceding such
Interest Payment Date. The term "interest" as used herein, as such term relates
to the Subordinated Debt Securities, includes any Compounded Interest,
Additional Interest or any Special Payment payable, unless otherwise stated. In
the event the Subordinated Debt Securities are not held solely in book-entry
only form, the Company will select relevant record dates, which shall be 15 days
prior to the relevant Interest Payment Date.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any period shorter than a full semiannual period for which interest
is computed will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which interest is payable on the
Subordinated Debt Securities is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as the Company is not in default in the payment of
interest that has become due and payable on the Subordinated Debt Securities and
no accrued interest from a prior completed Extension Period is unpaid, the
Company shall have the right to defer payments of interest on the Subordinated
Debt Securities by extending the interest payment period, at any time and from
time to time, for Extension Periods, each not exceeding 10 consecutive
semiannual periods and none extending beyond the maturity date of the
Subordinated Debt Securities, provided, however, that on the date on which each
such Extension Period ends or, if such date is not an Interest Payment Date, on
the immediately following Interest Payment Date, the Company shall pay all
interest then accrued and unpaid, together with interest thereon at the rate of
8.65% per annum, compounded semiannually (to the extent permitted by applicable
law) ("Compounded Interest"). During any Extension Period (a) the Company shall
not declare or pay dividends on, make any distribution with respect to, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
its capital stock or rights to acquire such capital stock (other than (i)
purchases or acquisitions of shares of any such capital stock or rights to
acquire such capital stock in connection with the satisfaction by the Company of
its obligations under any employee benefit plans or any other contractual
obligations of the Company (other than a contractual obligation
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ranking pari passu with or junior to the Subordinated Debt Securities), (ii) as
a result of a reclassification of the Company's capital stock or rights to
acquire such capital stock or the exchange or conversion of one class or series
of the Company's capital stock or rights to acquire such capital stock for
another class or series of the Company's capital stock or rights to acquire such
capital stock, (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv) dividends
and distributions made on the Company's capital stock, or rights to acquire such
capital stock with the Company's capital stock or rights to acquire such capital
stock, or (v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto), or make guarantee payments with respect to any guarantee by
the Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior to the Subordinated Debt Securities
(other than payments under the Guarantee and the Common Securities Guarantee)
and (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company that rank pari passu with or junior to the Subordinated Debt
Securities. Prior to the termination of any such Extension Period, the Company
may further defer payments of interest by extending the interest payment period;
provided, however, that each such Extension Period, including all such previous
and further extensions thereof, may not exceed 10 consecutive semiannual periods
or extend beyond the maturity of the Subordinated Debt Securities. Upon the
termination of any Extension Period and the payment of all amounts then due, the
Company may commence a new Extension Period, subject to the terms set forth in
this section. No interest during an Extension Period, except on the date on
which such Extension Period terminates (or if such date is not an Interest
Payment Date, on the immediately following Interest Payment Date), shall be due
and payable. The Company has no present intention of exercising its right to
defer payments of interest on the Subordinated Debt Securities.
If the Institutional Trustee shall be the sole holder of the
Subordinated Debt Securities, the Company shall give the Administrators, the
Institutional Trustee and the Debt Trustee notice of its initiation of any
Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Capital Securities are payable or (ii) the date the
Administrators are required to give notice to holders of the Capital Securities
(or any national securities exchange or other organization on which the Capital
Securities are listed, if any) of the record date or the distribution payment
date, in each case with respect to distributions on the Trust Securities the
payment of which is being deferred. An Administrator shall give notice of the
Company's initiation of any Extension Period to the holders of such Capital
Securities. If the Institutional Trustee shall not be the sole holder of the
Subordinated Debt Securities, the Company shall give the holders of such
Subordinated Debt Securities notice of its initiation of such Extension Period
10 Business Days prior to the earlier of (i) the next succeeding Interest
Payment Date or (ii) the date upon which the Company is required to give notice
to holders of such Subordinated Debt Securities (or any national securities
exchange or other organization on which the corresponding Capital Securities are
listed, if any) of the record date or interest payment date, in each case with
respect to interest payments the payment of which is being deferred.
ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any such case, the Company will pay as additional interest ("Additional
Interest") on the Subordinated Debt Securities such additional amounts as shall
be required so that the net amounts received and retained by the Trust after
paying any such taxes, duties, assessments or other governmental charges will
equal the amounts the Trust and the Institutional Trustee would have received
had no such taxes, duties, assessments or other governmental charges been
imposed.
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PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed
Legislation that would among other things, generally characterize as stock, and
deny corporate issuers a deduction for interest in respect of, certain debt
obligations issued on or after December 7, 1995, if such debt obligations have a
maximum term in excess of twenty years and are not shown as indebtedness on the
issuer's applicable consolidated balance sheet. On March 29, 1996, Senate
Finance Committee Chairman William V. Roth, Jr. and House Ways and Means
Committee Chairman Bill Archer issued the Joint Statement indicating their
intent that certain legislative proposals initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress would have an effective date
that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the views expressed in
the Joint Statement. Under current law, the Company will be able to deduct
interest on the Subordinated Debt Securities and, based upon the Joint
Statement, it is expected that if the Proposed Legislation were to be enacted,
such legislation would not apply retroactively to the Subordinated Debt
Securities. However, if the proposed legislation is enacted with retroactive
effect with regard to the Subordinated Debt Securities, the Company will not be
entitled to an interest deduction with respect to the Subordinated Debt
Securities. There can be no assurance, however, that the effective date guidance
contained in the Joint Statement will be incorporated into the Proposed
Legislation, if enacted, or that other legislation enacted after the date hereof
will not otherwise adversely affect the ability of the Company to deduct the
interest payable on the Subordinated Debt Securities. Accordingly, there can be
no assurance that a Tax Event will not occur. See "Description of the Capital
Securities -- Tax Event Redemption" and "Risk Factors."
CERTAIN COVENANTS
If (i) there shall have occurred and be continuing any event
that would constitute an Event of Default (as defined herein) under the
Indenture, (ii) the Company shall be in default with respect to its payment of
any obligations under the Guarantee or Common Securities Guarantee, or (iii) the
Company shall have given notice of its election to defer payments of interest on
the Subordinated Debt Securities by extending the interest payment period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Company shall not declare or pay any dividend on, make
a distribution with respect to, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of its capital stock or rights to
acquire such capital stock (other than (i) purchases or acquisitions of shares
of any such capital stock or rights to acquire such capital stock in connection
with the satisfaction by the Company of its obligations under any employee
benefit plans or any other contractual obligations of the Company (other than a
contractual obligation ranking pari passu with or junior to the Subordinated
Debt Securities), (ii) as a result of a reclassification of the Company's
capital stock or rights to acquire such capital stock or the exchange or
conversion of one class or series of the Company's capital stock or rights to
acquire such capital stock for another class or series of the Company's capital
stock or rights to acquire such capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends and distributions made on the Company's capital stock
or rights to acquire such capital stock with the Company's capital stock or
rights to acquire such capital stock, or (v) any declaration of a dividend in
connection with the implementation of a shareholder rights plan, or the issuance
of stock under any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto), or make guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks pari passu with or junior to the Subordinated
Debt Securities (other than payments under the Guarantee or the Common
Securities Guarantee) and (b) the Company
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shall not make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the Company that rank
pari passu with or junior to the Subordinated Debt Securities.
For so long as the Trust Securities remain outstanding, the
Company will covenant to maintain 100% ownership of the Common Securities;
provided, however, that any permitted successor of the Company under the
Indenture may succeed to the Company's ownership of such Common Securities. The
Administrators and the holder of a majority of the Common Securities each will
covenant to use their respective reasonable efforts to cause the Trust (a) to
remain a statutory business trust, except in connection with the distribution of
Subordinated Debt Securities to the holders of Trust Securities in liquidation
of the Trust, the redemption of all of the Trust Securities or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, (b) to
otherwise continue to be classified as a grantor trust for United States federal
income tax purposes and (c) to use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an undivided beneficial interest in
the Subordinated Debt Securities.
LIMITATION ON MERGERS AND SALES OF ASSETS
Nothing contained in the Indenture or in the Subordinated Debt
Securities shall prevent any consolidation or merger of the Company with or into
any other corporation (whether or not affiliated with the Company) or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party, or shall prevent any sale, conveyance, transfer or other
disposition of the property of the Company or its successor or successors as an
entirety, or substantially as an entirety, to any other entity (whether or not
affiliated with the Company or its successor or successors) authorized to
acquire and operate the same; provided, however, that the Company shall, upon
any such consolidation, merger, sale, conveyance, transfer or other disposition,
cause the obligations of the Company under the Subordinated Debt Securities and
under the Indenture, to be expressly assumed, by supplemental indenture
satisfactory in form to the Debt Trustee and executed and delivered to the Debt
Trustee, by the successor entity formed by such consolidation or into which the
Company shall have been merged, or which shall have acquired such property. Upon
execution and delivery of such supplemental indenture to the Debt Trustee, such
successor entity will be substituted under the Indenture and thereupon the
Company will be relieved of any further liability or obligation thereunder.
EVENTS OF DEFAULT, WAIVER AND NOTICE
The Indenture provides that any one or more of the following
described events which has occurred and is continuing with respect to the
Subordinated Debt Securities constitutes an "Event of Default" with respect to
the Subordinated Debt Securities:
(a) default for 30 days in payment of any interest on the
Subordinated Debt Securities, including any Compounded Interest or
Additional Interest in respect thereof or any Special Payment, when due
(subject to deferral of any due date in the case of an Extension
Period); or
(b) default in payment of principal and premium, if any, on
the Subordinated Debt Securities when due either at maturity, upon
redemption, by declaration or otherwise; or
(c) default resulting in acceleration of other indebtedness of
the Company for borrowed money where the aggregate principal amount so
accelerated exceeds $25 million and such acceleration is not rescinded
or annulled within 30 days after the written notice thereof to the
Company by the Debt Trustee or to the Company and the Debt Trustee by
the holders of 25% in aggregate principal amount of the Subordinated
Debt Securities then outstanding; or
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(d) default by the Company in the performance of any other of
the covenants or agreements in the Indenture which shall not have been
remedied for a period of 90 days after notice to the Company by the
Debt Trustee or to the Company and the Debt Trustee by the holders of
not less than 25% in aggregate principal amount of Subordinated Debt
Securities; or
(e) certain events of bankruptcy, insolvency or reorganization
of the Company; or
(f) the Liquidation of the Trust, except in connection with
the distribution of Subordinated Debt Securities to the holders of
Trust Securities in liquidation of the Trust, the redemption of all of
the Trust Securities, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration.
The Indenture provides that the Debt Trustee may, under
certain circumstances, withhold from the holders notice of default with respect
to the Subordinated Debt Securities (except for any default in payment of
principal of or interest or premium, if any, on the Subordinated Debt
Securities) if the Trustee considers it in the interest of such holders to do
so.
The Indenture provides that if an Event of Default in respect
of the Subordinated Debt Securities shall have occurred and be continuing,
either the Debt Trustee or the holders of not less than 25% in aggregate
principal amount of the Subordinated Debt Securities then outstanding may
declare the principal of and accrued interest on all Subordinated Debt
Securities to be due and payable immediately, but upon certain conditions such
declarations may be annulled and past defaults may be waived (except defaults in
payment of principal of or interest or premium on the Subordinated Debt
Securities, which must be cured or paid in full) by the holders of a majority in
aggregate principal amount of the Subordinated Debt Securities then outstanding.
No holder of any Subordinated Debt Security shall have any
right to institute any suit, action or proceeding for any remedy under the
Indenture, unless such holder previously shall have given to the Debt Trustee
written notice of a continuing Event of Default with respect to the Subordinated
Debt Securities and unless the holders of not less than 25% in aggregate
principal amount of the Subordinated Debt Securities then outstanding shall have
given the Debt Trustee a written request to institute such action, suit or
proceeding and shall have offered to the Debt Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
thereby, and the Debt Trustee for 60 days after its receipt of such notice,
request and offer of indemnity shall have failed to institute any such action,
suit or proceeding; provided that no holder of Subordinated Debt Securities
shall have any right to prejudice the rights of any other holder of Subordinated
Debt Securities, obtain priority or preference over any other such holder or
enforce any right under the Indenture except as provided in the Indenture and
for the equal, ratable and common benefit of all holders of Subordinated Debt
Securities. Notwithstanding the foregoing, the right of any holder of any
Subordinated Debt Security to receive payment of the principal of, premium, if
any, and interest, on such Subordinated Debt Security when due, or to institute
suit for the enforcement of any such payment, shall not be impaired or affected
without the consent of such holder.
The holders of a majority in aggregate principal amount of the
Subordinated Debt Securities then outstanding shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to,
or exercising any trust or power conferred on, the Debt Trustee under the
Indenture; provided, however, that, except under certain circumstances, the Debt
Trustee may decline to follow any such direction if the Debt Trustee determines
that the action so directed would be unjustly prejudicial to holders not taking
part in such direction or would be unlawful or would involve the Debt Trustee in
personal liability. The Indenture requires the annual filing by the Company with
the Debt Trustee of a certificate as to the absence of certain defaults under
the Indenture.
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An Event of Default under the Indenture also constitutes a
Declaration Event of Default. The holders of the Capital Securities of the
Trust, in certain circumstances, have the right to direct the Institutional
Trustee of the Trust to exercise its rights as the holder of the Subordinated
Debt Securities. See "Description of the Capital Securities -- Declaration
Events of Default" and " -- Voting Rights." Notwithstanding the foregoing, if an
Indenture Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal (or
premium, if any) on the Subordinated Debt Securities on the respective dates
such interest or principal (or premium, if any) is payable, after giving effect
to any Extension Period (or in the case of redemption, on the redemption date),
the Company acknowledges that a holder of record of Capital Securities may
institute a Direct Action for payment, on or after the respective due dates
specified in such Subordinated Debt Securities, to such holder directly of the
principal of (or premium, if any) or interest on Subordinated Debt Securities
having an aggregate principal amount equal to the aggregate liquidation amount
of the Capital Securities of such holder. Notwithstanding any payments made to
such holder of Capital Securities by the Company in connection with a Direct
Action, the Company shall remain obligated to pay the principal of (or premium,
if any) or interest on the Subordinated Debt Securities, and the Company shall
be subrogated to the rights of such holder of such Capital Securities under the
Declaration to the extent of any payments made by the Company to such holder in
any Direct Action; provided, however, that no such subrogation right may be
exercised so long as a Declaration Event of Default has occurred and is
continuing. Except to the extent described above under "Description of the
Capital Securities -- Declaration Events of Default" and " -- Voting Rights,"
the holders of Capital Securities will not be able to exercise directly any
other remedy available to the holders of the Subordinated Debt Securities.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and
the Debt Trustee, with the consent of the holders of not less than a majority in
principal amount of the Subordinated Debt Securities at the time outstanding, to
modify the Indenture or any supplemental indenture or the rights of the holders
of the Subordinated Debt Securities; provided, however, that no such
modification shall without the consent of the holder of each Subordinated Debt
Security so affected (i) extend the fixed maturity of any Subordinated Debt
Security, or reduce the principal amount thereof or any redemption premium
thereon, or reduce the rate or extend the time of payment of interest thereon,
or make the principal of, or interest or premium on, the Subordinated Debt
Securities payable in any coin or currency other than that provided in the
Subordinated Debt Securities, or impair or affect the right of any holder of
Subordinated Debt Securities to institute suit for the payment thereof or (ii)
reduce the aforesaid percentage of Subordinated Debt Securities the consent of
the holders of which is required for any such modification.
The Company and the Debt Trustee may enter into supplemental
indentures, without the consent of any holder of the Subordinated Debt
Securities: (i) to evidence the succession of another corporation to the Company
and the assumption by the successor corporation of the covenants, agreements and
obligations of the Company pursuant to the Indenture; (ii) to add to the
covenants of the Company such further covenants, restrictions or conditions for
the protection of the holders of the Subordinated Debt Securities and to make
the occurrence, or the occurrence and continuance (including any or no grace
periods), of a default in any of such additional covenants, restrictions or
conditions a default or an Event of Default permitting the enforcement of
remedies provided in the Indenture; (iii) to cure any ambiguity or to correct or
supplement any provision contained in the Indenture or in any supplemental
indenture which may be defective or inconsistent with any other provision
contained therein or in any supplemental indenture, or to make such other
provisions in regard to matters or questions arising under the Indenture;
provided that any such action shall not adversely affect the interests of the
holders of the Subordinated Debt Securities; (iv) to add to, delete from, or
revise the terms of the Subordinated Debt Securities to provide for transfer
procedures and restrictions substantially similar to those applicable to the
Capital Securities (for purposes of assuring that no registration of
Subordinated Debt Securities
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is required under the Securities Act); (v) to evidence and provide for the
acceptance of appointment under the Indenture by a successor Debt Trustee with
respect to the Subordinated Debt Securities and to add to or change any of the
provisions of the Indenture as shall be necessary to provide for or facilitate
the administration of the Trust under the Indenture by more than one Debt
Trustee, pursuant to the Indenture; (vi) to make any change that does not
adversely affect the rights of any holder of any Subordinated Debt Security in
any material respect; or (vii) to provide for the issuance, and establish the
form and terms and conditions, of the Subordinated Debt Securities, to establish
the form of any certifications required to be furnished pursuant to the terms of
the Indenture or the Subordinated Debt Securities or to add to the rights of the
holders of the Subordinated Debt Securities.
DISCHARGE
The Indenture provides that when, among other things, all
Subordinated Debt Securities not previously delivered to the Debt Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at the stated maturity within one year or are to be called for redemption within
one year under arrangements satisfactory to the Debt Trustee, and the Company
deposits or causes to be deposited with the Debt Trustee funds, in trust, for
the purpose and in an amount sufficient to pay and discharge the entire
indebtedness on the Subordinated Debt Securities not previously delivered to the
Debt Trustee for cancellation, for the principal (and premium, if any) and
interest to the date of the stated maturity or redemption date, as the case may
be, then the Indenture will cease to be of further effect (except as to the
Company's obligations to pay all other sums due pursuant to the Indenture and to
provide the officers' certificates and opinions of counsel described therein),
and the Company will be deemed to have satisfied and discharged the Indenture.
THE DEBT TRUSTEE
The Company and certain of its affiliates maintain a banking
relationship with the Debt Trustee and its affiliates.
BOOK-ENTRY ISSUANCE AND SETTLEMENT
If distributed to holders of Capital Securities of the Trust
in connection with the involuntary or voluntary dissolution, winding-up or
liquidation of the Trust, the Subordinated Debt Securities will, with respect to
such Capital Securities held in book-entry form, initially be issued in the form
of one or more global certificates (each a "Global Security") registered in the
name of the Depositary or its nominee. Except under the limited circumstances
described below, Subordinated Debt Securities represented by a Global Security
will not be exchangeable for, and will not otherwise be issuable as,
Subordinated Debt Securities in definitive form. The Global Securities described
above may not be transferred except 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 or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in a
Global Security will not be entitled to receive physical delivery of
Subordinated Debt Securities in definitive form and will not be considered the
holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Subordinated Debt Securities
shall be exchangeable, except for another Global Security of like denomination
and tenor to be registered in the name of the Depositary or its nominee or to a
successor
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Depositary or its nominee. Accordingly, each beneficial owner must rely on the
procedures of the Depositary or if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest to
exercise any rights of a holder under the Indenture.
THE DEPOSITARY
If Subordinated Debt Securities are distributed to holders of
Capital Securities in liquidation of such holders' interests in the Trust, DTC
will act as securities Depositary for the Subordinated Debt Securities issued by
the Trust with respect to Capital Securities held in book-entry form. For a
description of DTC and the specific terms of the depositary arrangements, see
"Description of the Capital Securities -- Book-Entry Only Issuance -- The
Depository Trust Company." As of the date of this Prospectus, the description
herein of DTC's book-entry system and DTC's practices as they relate to
purchases, transfers, notices and payments with respect to the Capital
Securities would apply in all material respects to any debt obligations
represented by one or more Global Securities held by DTC. The Company may
appoint a successor to DTC or any successor depositary in the event DTC or such
successor depositary is unable or unwilling to continue as the Depositary for
the Global Securities.
None of the Company, the Trust, the Institutional Trustee, the
Debt Trustee, any paying agent and any other agent of the Company, the Trust,
the Institutional Trustee or the Debt Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Security for the Subordinated Debt
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Debt
Securities registered in the names of persons other than the Depositary or its
nominee only if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as a depositary for such Global Security and no successor
depositary shall have been appointed, (ii) the Depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
Depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) the Company, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Indenture Event of Default. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Subordinated Debt Securities registered in such names as the
Depositary shall direct. It is expected that such instructions will be based
upon directions received by the Depositary from its Participants with respect to
ownership of beneficial interests in such Global Security.
GOVERNING LAW
The Indenture and the Subordinated Debt Securities are
governed by, and construed in accordance with, the laws of the State of New
York, without regard to conflict of laws principles.
MISCELLANEOUS
The Indenture provides that the Company will pay all fees and
expenses related to (i) the offering and sale of the Trust Securities and the
Subordinated Debt Securities, (ii) the organization, maintenance and dissolution
of the Trust, (iii) the retention of the Trustees and Administrators and (iv)
the enforcement by the Institutional Trustee of the rights of the holders of the
Capital Securities.
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The Company will have the right at all times to assign any of
its respective rights or obligations under the Indenture to a direct or indirect
wholly-owned subsidiary of the Company; provided that, in the event of any such
assignment, the Company will remain liable for all of its obligations. Subject
to the foregoing, the Indenture will be binding upon and inure to the benefit of
the parties thereto and their respective successors and assigns. Except as
otherwise provided in " -- Limitation on Mergers and Sales of Assets," the
Indenture provides that it may not otherwise be assigned by the parties thereto.
EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBT SECURITIES
AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust
is to issue and sell the Trust Securities evidencing undivided beneficial
interests in the assets of the Trust, and to invest the proceeds from such
issuance and sale in the Subordinated Debt Securities issued by the Company in
accordance with such Trust Securities.
As long as payments of interest and other payments are made
when due on the Subordinated Debt Securities, such payments will be sufficient
to cover distributions and payments due on the Trust Securities because of the
following factors: (i) the aggregate principal amount of the Subordinated Debt
Securities will be equal to the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Subordinated Debt Securities will match the distribution rate and
distribution and other payment dates for the Trust Securities; (iii) the Company
shall pay all, and the Trust shall not be obligated to pay directly or
indirectly any, costs, expenses, debts, and other obligations of the Trust
(other than with respect to such Trust Securities); and (iv) the Declaration
further provides that the Trustees shall not take any action or cause or permit
the Trust to, among other things, engage in any activity that is not consistent
with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are
available to the Trust) and other payments due on the Capital Securities (to the
extent funds therefor are available to the Trust) are guaranteed by the Company
as described under "Description of the Guarantee." If the Company does not make
interest payments on the Subordinated Debt Securities, it is expected that the
Trust will not have sufficient funds to pay distributions on such Capital
Securities. The Guarantee will not apply to any payment of distributions except
to the extent that Trust has funds available for the payment of such
distributions. The Guarantee will cover the payment of distributions and other
payments on such Capital Securities only if and to the extent that the Company
has made payments of interest or principal (or premium, if any) on the
Subordinated Debt Securities held by the Trust as its sole assets. The
Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities, the Declaration and the Indenture, including its
obligations to pay costs, expenses, debts and other obligations of the Trust
(other than with respect to the Trust Securities), provide a full and
unconditional guarantee on a subordinated basis by the Company of amounts when
due on such Capital Securities.
If the Company fails to make interest or other payments on the
Subordinated Debt Securities when due (after giving effect to any Extension
Period), the Declaration provides a mechanism whereby the holders of the Capital
Securities, using the procedures described herein under "Description of the
Capital Securities -- Book-Entry Only Issuance -- The Depository Trust Company"
and " -- Voting Rights," may direct the Institutional Trustee to enforce its
rights under the Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under the Subordinated Debt Securities after a
majority in liquidation amount of Capital Securities have so directed the
Institutional Trustee, a holder of record of the Capital Securities may, to the
fullest extent permitted by law, institute a legal proceeding against the
Company to enforce the Institutional Trustee's rights under the Subordinated
Debt Securities without first instituting any legal proceedings against the
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Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay principal (or
premium, if any) or interest on the Subordinated Debt Securities on the
respective dates such principal (or premium, if any) or interest is payable,
after giving effect to any Extension Period (or in the case of redemption, on
the redemption date), then a holder of record of Capital Securities may
institute a Direct Action for payment on or after the respective due dates
specified in the Subordinated Debt Securities. In connection with such Direct
Action, the Company will be subrogated to the rights of such holder of Capital
Securities under the Declaration to the extent of any payment made by the
Company to such holder of Capital Securities in such Direct Action; provided,
however, that no such subrogation right may be exercised so long as a
Declaration Event of Default has occurred and is continuing.
The Subordinated Debt Securities and the Guarantee also are
effectively subordinated to all existing and future liabilities, including trade
payables and Deposits, of the Company's subsidiaries, except to the extent that
the Company is a creditor of the subsidiaries recognized as such.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
In the opinion of Weil, Gotshal & Manges LLP, counsel to the
Company and the Trust (the "Counsel"), the following discussion, insofar as it
describes statements of law or legal conclusions, fairly summarizes the
principal United States federal income tax consequences to the holders of
Capital Securities attributable to the purchase, ownership and disposition of
Capital Securities.
This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations thereunder, and administrative and
judicial interpretations thereof, each as of the date hereof, all of which are
subject to change, possibly on a retroactive basis.
This summary deals only with Capital Securities held as a
capital asset by a holder who or which purchased Capital Securities upon
original issuance (an "Initial Holder"). It does not deal with all aspects of
United States federal income taxation, nor with the particular United States
federal income tax consequences which may be applicable to certain classes of US
Holders (such as banks, thrift institutions, real estate investment trusts,
regulated investment companies, insurance companies, brokers and dealers in
securities or currencies, other financial institutions, tax-exempt
organizations, persons holding Capital Securities as a position in a "straddle,"
as part of a "synthetic security or hedge," as part of a "conversion
transaction" or as part of any other integrated investment, persons having a
functional currency other than the U.S. Dollar and certain United States
expatriates). Further, this summary does not address (a) the federal income tax
consequences to shareholders in, or partners or beneficiaries of, a holder of
Capital Securities, (b) the United States federal alternative minimum tax
consequences of the purchase, ownership or disposition of Capital Securities, or
(c) any state, local or foreign tax consequences of the purchase, ownership and
disposition of Capital Securities.
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EXCHANGE OF CAPITAL SECURITIES
For United States federal income purposes, the exchange of Old
Capital Securities for New Capital Securities pursuant to the Exchange Offer
should not be a taxable event to holders and should not be treated as an
"exchange." Accordingly, there should be no United States federal income tax
consequences as a result of the consummation of the Exchange Offer.
US HOLDERS
A "US Holder" is a holder of Capital Securities who or which
is a citizen or individual resident of the United States for federal income tax
purposes, a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof, or a
trust or estate the income of which is includible in its gross income for United
States federal income tax purposes without regard to its source.
CHARACTERIZATION OF THE TRUST
In connection with the issuance of the Old Capital Securities,
Counsel rendered its opinion generally to the effect that, under then current
law and assuming full compliance with the terms of the Indenture and the
Declaration (and certain other documents), and based on certain assumptions and
qualifications referenced in the opinion, the Trust will be characterized for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation. The discussion herein under the heading
"Certain Federal Income Tax Consequences" assumes that the Trust will be so
characterized. Accordingly, for federal income tax purposes, each holder of
Capital Securities generally will be considered the owner of an undivided
interest in the Subordinated Debt Securities owned by the Trust, and each US
Holder will be required to include all federal income or gain recognized for
federal income tax purposes with respect to its allocable share of the
Subordinated Debt Securities on its own income tax return. Investors should be
aware that such tax opinion is not binding on the Internal Revenue Service (the
"Service") or the courts.
CHARACTERIZATION OF THE SUBORDINATED DEBT SECURITIES
In connection with the issuance of the Old Subordinated Debt
Securities, Counsel rendered its opinion generally to the effect that, under
then current law and assuming full compliance with the terms of the Indenture
(and other documents), and based on certain assumptions and qualifications
referenced in the opinion, the Subordinated Debt Securities will be
characterized for United States federal income tax purposes as debt of the
Company. The discussion herein under the heading "Certain Federal Income Tax
Consequences" assumes that the Subordinated Debt Securities will be so
characterized. Investors should be aware that such tax opinion is not binding on
the Service or the courts.
ORIGINAL ISSUE DISCOUNT
Under the terms of the Subordinated Debt Securities, the
Company has the option to defer payments of interest from time to time by
extending the interest payment period for a period not exceeding 10 consecutive
semiannual periods, but not beyond the maturity of the Subordinated Debt
Securities. Recently issued Treasury regulations under Section 1273 of the Code
provide that debt instruments like the Subordinated Debt Securities will not be
considered issued with OID by reason of the Company's option to defer payments
of interest if the likelihood of deferral is "remote."
The Company has concluded, and this discussion assumes, that,
as of the date of issuance of the Old Subordinated Debt Securities, the
likelihood of exercise of that option is "remote" within the meaning of the
applicable regulations, in part because exercising that option would prevent the
Company from declaring dividends on its stock and would prevent the Company from
making any payments with respect to debt securities that rank pari passu or
junior to the Subordinated Debt Securities. In such case, the Subordinated Debt
Securities should not be treated as issued with OID by reason of the Company's
deferral option. Rather, stated interest on the Subordinated Debt Securities
will generally be taxable to a US Holder, as ordinary income, when paid or
accrued in accordance with that holder's method of accounting for federal income
tax purposes. It should be
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noted, however, that these regulations have not yet been addressed in any
rulings or other interpretations by the Service. Accordingly, it is possible
that the Service could take a position contrary to the interpretation described
herein.
Notwithstanding the foregoing, in the event the Company does
exercise its option to defer payments of interest, the Subordinated Debt
Securities would be treated as retired and reissued for OID purposes and the sum
of the remaining interest payments on the Subordinated Debt Securities would
thereafter be treated as OID, which would accrue, and be includible in a US
Holder's taxable income, on an economic accrual basis (regardless of the US
Holder's method of accounting for federal income tax purposes) over the
remaining term of the Subordinated Debt Securities (including any period of
interest deferral), without regard to the timing of payments under the
Subordinated Debt Securities. Subsequent distributions of interest on the
Subordinated Debt Securities generally would not be taxable. The amount of OID
that accrues in any period generally would equal the amount of interest that
accrues on the Subordinated Debt Securities in that period at the stated
interest rate. Consequently, during any period of interest deferral, US Holders
will include OID in gross income in advance of the receipt of cash, and a US
Holder which disposes of a Capital Security prior to the record date for payment
of distributions on the Subordinated Debt Securities following that period will
be subject to income tax on OID accrued through the date of disposition (and not
previously included in income), but will not receive cash from the Trust with
respect to that OID.
If the likelihood of exercise of Company's option to defer
payments of interest were not treated as remote, the Subordinated Debt
Securities would be treated as initially issued with OID in an amount equal to
the aggregate stated interest over the term of the Subordinated Debt. That OID
would generally be includible in a US Holder's taxable income, over the term of
the Subordinated Debt Securities, on an economic accrual basis, whether or not
the Company does exercise its option to defer payments of interest. The amount
of OID that accrues in any period generally would equal the amount of interest
that accrues on the Subordinated Debt Securities in that period at the stated
interest rate.
Because the income underlying the Capital Securities will not
be characterized as dividends for income tax purposes, corporate holders of
Capital Securities will not be entitled to a dividends-received deduction for
any income recognized with respect to the Capital Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Capital Securities other than Initial Holders may
be considered to have acquired their undivided interests in the Subordinated
Debt Securities with market discount or acquisition premium (as each phrase is
defined for federal income tax purposes).
RECEIPT OF SUBORDINATED DEBT SECURITIES OR CASH
UPON LIQUIDATION OF THE TRUST
Under certain circumstances described herein (See "Description
of the Capital Securities"), the Company will have the right to distribute
Subordinated Debt Securities to holders in exchange for the Capital Securities
and in liquidation of the Trust. Under current law, such a distribution would
not be a taxable event for federal income tax purposes, and each US Holder would
have an aggregate adjusted basis in its Subordinated Debt Securities for federal
income tax purposes equal to such holder's aggregate adjusted basis in its
Capital Securities. For federal income tax purposes, a US Holder's holding
period in the Subordinated Debt Securities received in such a liquidation of the
Trust would include the period during which the Capital Securities were held by
the holder. If, however, the relevant event is a Tax Event which results in the
Trust being treated as an
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association taxable as a corporation, the distribution would likely constitute a
taxable event to US Holders of the Capital Securities for federal income tax
purposes.
Under certain circumstances described herein (see "Description
of the Capital Securities"), the Subordinated Debt Securities may be redeemed
for cash and the proceeds of such redemption distributed to holders in
redemption of their Capital Securities. Such a redemption would be taxable for
income tax purposes, and a US Holder would recognize gain or loss as if it had
sold the Capital Securities for cash. See " -- Sales of Capital Securities"
below.
SALES OF CAPITAL SECURITIES
A US Holder that sells Capital Securities will recognize gain
or loss equal to the difference between its adjusted basis in the Capital
Securities and the amount realized on the sale of such Capital Securities (other
than with respect to accrued but unpaid interest which has not yet been included
in income, which will be treated as ordinary income). Assuming the Capital
Securities are not deemed to be issued with OID, a US Holder's adjusted tax
basis in the Capital Securities generally will be its initial purchase price. If
the Capital Securities are deemed to be issued with OID (either upon original
issuance or at the time the Company exercises its option to defer interest
payments), a holder's tax basis in the Capital Securities generally will be its
initial issue price, increased by OID previously includible in such holder's
gross income to the date of disposition and decreased by payments received on
the Capital Securities from and including the date the Capital Securities were
deemed to be issued with OID. Except as noted above, any such gain or loss
generally will be capital gain or loss, and generally will be a long-term
capital gain or loss if the Capital Securities have been held for more than one
year. Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for federal income tax purposes.
PROPOSED TAX LEGISLATION
On March 19, 1996, President Clinton proposed the Proposed
Legislation that would, among other things, generally characterize as stock, and
deny corporate issuers a deduction for interest in respect of, certain debt
obligations issued on or after December 7, 1995 if such debt obligations have a
maximum term in excess of twenty years and are not shown as indebtedness on the
issuer's applicable consolidated balance sheet. On March 29, 1996, Senate
Finance Committee Chairman William V. Roth, Jr. and House Ways and Means
committee Chairman Bill Archer issued the Joint Statement indicating their
intent that certain legislative proposals initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress would have an effective date
that is no earlier than the date of "appropriate Congressional action." In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the views expressed in
the Joint Statement. Under current law, the Company will be able to deduct
interest on the Subordinated Debt Securities and, based upon the Joint
Statement, it is expected that if the Proposed Legislation were to be enacted,
such legislation would not apply retroactively to the Subordinated Debt
Securities. However, if the Proposed Legislation is enacted with retroactive
effect with regard to the Subordinated Debt Securities, the Company will not be
entitled to an interest deduction with respect to the Subordinated Debt
Securities. There can be no assurance, however, that the effective date guidance
contained in the Joint Statement will be incorporated into the Proposed
Legislation, if enacted, or that other legislation enacted after the date hereof
will not otherwise adversely affect the ability of the Company to deduct the
interest payable on the Subordinated Debt Securities. Accordingly, there can be
no assurance that a Tax Event will not occur. See " -- Redemption; Distribution"
and "Description of the Subordinated Debt Securities -- Proposed Tax
Legislation" and "Risk Factors."
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NON-US HOLDERS
The following discussion applies to an Initial Holder who is
not a US Holder (a "Non-US Holder").
Payments by the Trust to a holder of a Capital Security which
is a Non-US Holder will generally not be subject to United States federal income
tax or withholding of United States federal income tax if the income is not
effectively connected with the conduct of a trade or business within the United
States, provided that (a) the beneficial owner of the Capital Security does not
(directly or indirectly, actually or constructively) own 10% or more of the
total combined voting power of all classes of stock of the Company entitled to
vote, (b) the beneficial owner of the Capital Security is not a controlled
foreign corporation that is related to the Company through stock ownership, (c)
the beneficial owner of a Capital Security is not a bank with respect to which
the Capital Security constitutes an extension of credit made pursuant to a loan
agreement entered into the ordinary course of its trade or business, and (d)
either (i) the beneficial owner of the Capital Securities certifies to the Trust
or its agent, under penalties of perjury, that it is a Non-US Holder and
provides its name and address, or (ii) a securities clearing organization, bank
or other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "Financial Institution"), and holds the
Capital Securities in such capacity, certifies to the Trust or its agent, under
penalties of perjury, that such a statement has been received from the
beneficial owner by it or by another Financial Institution between it and the
beneficial owner in the chain of ownership, and furnishes the Trust or its agent
with a copy thereof.
As discussed above (see "--Proposed Tax Legislation"), changes
in legislation affecting the income tax consequences of the Subordinated Debt
Securities are possible, and could adversely affect the ability of the Company
to deduct the interest payable on the Subordinated Debt Securities. Moreover,
any such legislation could adversely affect, as the Proposed Legislation would
have adversely affected, Non-US Holders by characterizing income derived from
the Subordinated Debt Securities as dividends, generally subject to a 30% United
States federal income tax (on a withholding basis) when paid to a Non-US Holder
(subject to reduction under applicable treaties), rather than as interest which,
as discussed above, is generally exempt from income tax in the hands of a Non-US
Holder.
Under current law, a Non-US Holder of a Capital Security will
generally not be subject to withholding of income tax on any gain realized upon
the sale or other disposition of a Capital Security provided such holder is not
engaged or considered to be engaged in the conduct of a trade or business in the
United States or, in the case of an indvidual Non-US Holder, such holder is
present in the United States for less than 183 days in the taxable year of the
sale or other disposition of a Capital Security.
A Non-US Holder which holds Capital Securities in connection
with the conduct of a United States trade or business will be subject to United
States federal income tax on all income and gains recognized with respect to its
proportionate share of the Subordinated Debt Securities.
INFORMATION REPORTING; BACKUP WITHHOLDING
The Trust intends to report income on the Capital Securities
for a calendar year to holders of record on Forms 1099 by the following January
31st. Payments made on, and proceeds from the sale of, the Capital Securities
may be subject to a "backup" withholding tax of 31% unless the holder complies
with certain identification or exemption requirements. Any amounts so withheld
will be allowed as a credit against the holder's income tax liability, or
refunded, provided that the required information is provided to the Service.
THE PRECEDING DISCUSSION IS ONLY A SUMMARY AND DOES NOT
ADDRESS THE CONSEQUENCES TO A PARTICULAR HOLDER OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF CAPITAL SECURITIES. POTENTIAL HOLDERS OF CAPITAL SECURITIES ARE
URGED TO CONTACT THEIR OWN TAX ADVISORS TO DETERMINE THEIR PARTICULAR TAX
CONSEQUENCES.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives New Capital Securities for
its own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such New Capital
Securities. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales of New Capital
Securities received in exchange for Old Capital Securities where such Old
Capital Securities were acquired as a result of market-making activities or
other trading activities. The Company and the Trust have agreed that, starting
on the date on which the Exchange Offer is consummated and ending on the close
of business one year after such date, they will make this Prospectus, as amended
or supplemented, available to any broker-dealer for use in connection with any
such resale. In addition, until ________, 1997, all dealers effecting
transactions in the New Capital Securities may be required to deliver a
prospectus.
The Company and the Trust will not receive any proceeds from
any sale of New Capital Securities by broker-dealers. New Capital Securities
received by broker-dealers for their own account pursuant to the Exchange Offer
may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the New Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Capital Securities. Any
broker-dealer that resells New Capital Securities that were received by it for
its own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Capital Securities may be deemed to
be an "underwriter" within the meaning of the Securities Act and any profit on
any such resale of New Capital Securities and any commissions or concessions
received by an such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of one year after the date on which the Exchange
Offer is consummated, the Company and the Trust will promptly send additional
copies of this Prospectus and any amendment or supplement to this Prospectus to
any broker-dealer that requests such documents in the Letter of Transmittal. The
Company has agreed to pay all expenses incident to the Exchange Offer (including
the expenses of one counsel for the holders of the Old Capital Securities) other
than commissions or concessions of any brokers or dealers and will indemnify the
holders of the Old Capital Securities (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
ERISA CONSIDERATIONS
Each fiduciary of a Plan subject to ERISA should consider the
fiduciary standards of ERISA in the context of the Plan's particular
circumstances before authorizing an investment in the Capital Securities.
Accordingly, among other factors, the fiduciary should consider whether the
investment would satisfy the prudence and diversification requirements of ERISA
and would be consistent with the documents and instruments governing the Plan.
The prohibited transaction rules of ERISA and Section 4975 of
the Code apply to Plans, including individual retirement accounts and entities
deemed to hold plan assets by reason of Department of Labor regulation, 29
C.F.R. ss.ss. 2510.3-101 ("Plan Assets Regulation") or applicable law, of such
employee benefit plans, accounts or plans (collectively "Plans"). Such rules
prohibit certain transactions involving "plan
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assets" of a Plan with persons who are "parties in interest" under ERISA or
"disqualified persons" under the Code ("Parties in Interest") with respect to
such Plan unless exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental plans (as
defined in Section 3(32) of ERISA), certain church plans (as defined in Section
3(33) of ERISA) and foreign plans (as described in Section 4(b)(5) of ERISA) are
not subject to the requirements of ERISA or Section 4975 of the Code.
Pursuant to an exception contained in the Plan Assets
Regulation, the assets of the Trust would not be deemed to be "plan assets" of
Plans acquiring Capital Securities if (i) the Capital Securities constitute
publicly offered securities, or (ii) immediately after the most recent
acquisition of any equity interest in the Trust, less than 25% of the value of
each class of equity interests in the Trust were held by Plans and other benefit
plan investors within the meaning of the Plan Assets Regulation (collectively,
"Benefit Plan Investors"), excluding for this purpose any Trust Securities owned
by the Institutional Trustee, the Delaware Trustee, the Company, the
Administrators or any of their affiliates. The Plan Assets Regulation states
that a beneficial interest in a trust is an equity interest. The acquisition of
Capital Securities (i) by at least 100 persons who are independent of one
another (at the completion of the initial offering or otherwise) for purposes of
satisfying the definition of a publicly offered security or (ii) by Benefit Plan
Investors, will not be monitored. Therefore, no assurances can be provided by
the Initial Purchasers that the assets of the Trust would not be treated as
"plan assets" of Plans owning Capital Securities at any time.
Certain transactions involving the Trust could be deemed to
constitute direct or indirect prohibited transactions under ERISA and Section
4975 of the Code if the assets of the Trust were deemed to be "plan assets" of
Plans investing in the Trust. For example, if the Company is a Party in Interest
with respect to an investing Plan, extensions of credit between the Company and
the Trust (as represented by the Subordinated Debt Securities and the
Guarantees) would likely be prohibited by Section 406(a)(1)(B) of ERISA and
Section 4975(c)(1)(B) of the Code, unless exemptive relief were available under
an applicable administrative exemption (see below).
The DOL has issued five PTCEs that may provide exemptive
relief for direct or indirect prohibited transactions resulting from the
purchase or holding of the Capital Securities, assuming that assets of the Trust
were deemed to be "plan assets" of Plans investing in the Trust (see above).
Those class exemptions are PTCE 96-23 (for certain transactions determined by
in-house asset managers), PTCE 96-60 (for certain transactions involving
insurance company general accounts), PTCE 91-38 (for certain transactions
involving bank collective investment funds), PTCE 90-1 (for certain transactions
involving insurance company separate accounts) and PTCE 84-14 (for certain
transactions determined by independent qualified asset managers).
Because the Capital Securities may be deemed to be equity
interests in the Trust for purposes of applying ERISA and Section 4975 of the
Code, the Capital Securities may not be purchased or held by any Plan, any
entity whose underlying assets include "plan assets" by reason of any Plan's
investment in the entity (a "Plan Asset Entity") or any person investing "plan
assets" of any Plan, unless such purchaser or holder is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. Any
purchaser or holder of the Capital Securities or any interest therein will be
deemed to have represented by its purchase and holding thereof that it either
(a) is not a Plan or a Plan Asset Entity and is not purchasing such securities
on behalf of or with "plan assets" of any Plan or (b) is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 with
respect to such purchase or holding.
Due to the complexity of these rules and the penalties that
may be imposed upon persons involved in non-exempt prohibited transactions, it
is particularly important that fiduciaries or other persons considering
purchasing Capital Securities on behalf of or with "plan assets" of any Plan
consult with their
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counsel regarding the potential consequences if the assets of the Trust were
deemed to be "plan assets" and the availability of exemptive relief under PTCE
96-23, 95-60, 91-38, 90-1 or 84-14.
The foregoing discussion with respect to Plans and other
Benefit Plan Investors is general in nature and is not intended to be all
inclusive.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of
the New Capital Securities and the creation of the Trust will be passed upon on
behalf of the Trust by Richards, Layton & Finger P.A., special Delaware counsel
to the Trust and the Company. The validity under New York law of the
Subordinated Debt Securities and the Guarantee will be passed upon for the
Company and the Trust by Weil, Gotshal & Manges LLP, New York, New York. Certain
United States federal income tax matters have been, and will be in connection
with the Exchange Offer, passed upon for the Company and the Trust by Weil,
Gotshal & Manges LLP, New York, New York.
EXPERTS
The consolidated balance sheets as of December 31, 1995 and
1994 and the consolidated statements of income, changes in shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1995, incorporated by reference herein, have been incorporated herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS EXCEPT AS CONTAINED IN THIS PROSPECTUS OR THE ACCOMPANYING
LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, NO SUCH INFORMATION OR
REPRESENTATION SHOULD BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR
THE TRUST. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR THE ACCOMPANYING LETTER
OF TRANSMITTAL OR BOTH TOGETHER, NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
AFFAIRS OF THE COMPANY OR THE TRUST SINCE THE DATE HEREOF. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR THE ACCOMPANYING LETTER OF TRANSMITTAL OR BOTH TOGETHER
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT
RELATES OR AN OFFER TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER WOULD BE
UNLAWFUL.
TABLE OF CONTENTS
Page
Available Information....................................... 2
Incorporation of Certain Documents by
Reference................................................. 3
Summary..................................................... 4
Risk Factors................................................ 14
Leucadia National Corporation............................... 20
Selected Financial Data..................................... 21
Capitalization.............................................. 25
Accounting Treatment........................................ 27
Use of Proceeds............................................. 27
The Trust................................................... 27
The Exchange Offer.......................................... 29
Description of the Capital Securities....................... 39
Description of the Guarantee................................ 53
Description of the Subordinated Debt Securities............. 56
Effect of Obligations Under the Subordinated
Debt Securities and the Guarantee......................... 67
Certain Federal Income Tax Consequences..................... 68
Plan of Distribution........................................ 73
ERISA Considerations........................................ 74
Legal Matters............................................... 75
Experts..................................................... 75
$150,000,000
LEUCADIA CAPITAL
TRUST I
8.65% CAPITAL TRUST
PASS-THROUGH SECURITIES(SM)
(TRUPS(SM))
(LIQUIDATION AMOUNT $1,000
PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY
LEUCADIA NATIONAL
CORPORATION
PROSPECTUS
DATED ________, 1997
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 722 through 725 of the New York Business Corporation
Law (the "Business Corporation Law") provide that a corporation may indemnify,
with certain limitations and exceptions, a director or officer as follows: (1)
in a derivative action, against his reasonable expenses, including attorneys'
fees but excluding certain settlement costs, actually and necessarily incurred
by him in connection with the defense thereof, or an appeal therein, if such
director or officer acted, in good faith, for a purpose which he reasonably
believed to be in (or in the case of service for another corporation, not
opposed to) the best interests of the corporation; and (2) in a civil or
criminal non-derivative action or proceeding including a derivative action by
another corporation, partnership or other enterprise in which any director or
officer of the indemnifying corporation served in any capacity at the
indemnifying corporation's request, against judgments, fines, settlement
payments and reasonable expenses, including attorneys' fees, incurred as a
result thereof, or any appeal therein, if such director or officer acted in good
faith, for a purpose which he reasonably believed to be in (or, in the case of
service for any other corporation, not opposed to) the best interests of the
corporation and, in criminal actions and proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful. Such indemnification
is a matter of right where the director or officer has been successful on the
merits or otherwise, and otherwise may be granted upon corporate authorization
or court award as provided in the statute.
Section 721 of the Business Corporation Law provides that
indemnification arrangements can be established for directors and officers, by
contract, by-law, charter provision, action of shareholders or board of
directors, on terms other than those specifically provided by Article 7 of the
Business Corporation Law, provided that no indemnification may be made to or on
behalf of any director or officer if a judgment or other final adjudication
adverse to the director or officer establishes that his acts were committed in
bad faith or were the result of active and deliberate dishonesty and were
material to the cause of action so adjudicated, or that he personally gained in
fact a financial profit or other advantage to which he was not legally entitled.
Article V of the Company's By-Laws provides for the indemnification, to the full
extent authorized by law, of any person made or threatened to be made a party in
any civil or criminal action or proceeding by reason of the fact that he, his
testator or intestate is or was a director or officer of the Company.
Section 726 of the Business Corporation Law provides that a
corporation may obtain insurance to indemnify itself and its directors and
officers. The Company maintains an insurance policy providing both directors and
officers liability coverage and corporate reimbursement coverage.
Article Sixth of the Company's Certificate of Incorporation
contains a charter provision eliminating or limiting director liability for
monetary damages arising from breaches of fiduciary duty, subject only to
certain limitations imposed by statute.
II-1
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ITEM 21. EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
4.1 Indenture, dated as of January 21, 1997, between the Company and The
Chase Manhattan Bank, as Trustee.
4.2 First Supplemental Indenture, dated as of January 21, 1997, between the
Company and The Chase Manhattan Bank, as Trustee, in respect of the
Company's 8.65% Junior Subordinated Deferrable Interest Debentures due
2027.
4.3 Form of Junior Subordinated Deferrable Interest Debenture (included
in the First Supplemental Indenture filed as Exhibit 4.2 to this
Registration Statement).
4.4 Certificate of Trust of Leucadia Capital Trust I dated January 10, 1997.
4.5 Amended and Restated Declaration of Trust of Leucadia Capital Trust I
(the "Trust"), dated as of January 21, 1997, among the Company, as
sponsor, the Administrators thereof, Chase Manhattan Bank Delaware, as
Delaware Trustee, The Chase Manhattan Bank, as Institutional Trustee
and the holders from time to time of undivided interests in the assets
of the Trust.**
4.6 Form of Capital Security Certificate for the Trust (included in the
Amended and Restated Declaration filed as Exhibit 4.5 to this
Registration Statement).
4.7 Capital Securities Guarantee Agreement, dated as of January 21, 1997,
between the Company and The Chase Manhattan Bank, as Guarantee Trustee.
4.8 Registration Rights Agreement, dated January 21, 1997, among the
Company, the Trust and Salomon Brothers Inc., as Representative for the
limited Purchasers.
5.1 Opinion of Richards, Layton & Finger as to validity of the New Capital
Securities.**
5.2 Opinion of Weil, Gotshal & Manges LLP as to validity of the New
Subordinated Debt Securities and the New Guarantee to be issued by
the Company.**
8 Opinion of Weil, Gotshal & Manges LLP as to certain federal income tax
matters.**
12 Statement of Computation of Ratios of Earnings to Fixed Charges (filed
as Exhibit 12 to the Company's Registration Statement on Form S-3,
File No. 333-59463).*
23.1 Consent of Cooper & Lybrand L.L.P.
23.2 Consent of Richards, Layton & Finger (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
II-2
<PAGE>
23.3 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as
Exhibit 5.2 to this Registration Statement).
23.4 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed
as Exhibit 8 to this Registration Statement).
24 Powers of Attorney (included on signature page of this Part II).
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Indenture.**
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Amended and Restated Declaration.**
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank under
the Guarantee for the benefit of the holders of Capital Securities.**
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
___________
* Incorporated by reference.
** To be filed by amendment.
ITEM 22. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes that,
for purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of a Registrant's annual report pursuant to Section 13 (a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of a registrant pursuant to the foregoing provisions, or otherwise each
of the undersigned registrants has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by a
registrant of expenses incurred by a director, officer or controlling person of
a registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each of the undersigned registrants will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Each of the undersigned registrants hereby undertakes to
respond to requests for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form within one business
day of receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
Each of the undersigned registrants hereby undertake to supply
by means of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City and State of
New York, on this 5th day of February, 1997.
LEUCADIA NATIONAL CORPORATION
By: /s/ JOSEPH A. ORLANDO
----------------------
JOSEPH A. ORLANDO
VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Thomas E. Mara, Joseph A.
Orlando and Barbara L. Lowenthal, and each of them, with full power to act
without the other, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the registrant and in the capacities indicated, on the date set forth above.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ IAN M. CUMMING Chairman of the Board (Principal Executive February 5, 1997
- ------------------------------- Officer)
(IAN M. CUMMING)
/s/ JOSEPH S. STEINBERG President and Director February 5, 1997
- ------------------------------- (Principal Executive Officer)
(JOSEPH S. STEINBERG)
/s/ JOSEPH A. ORLANDO Vice President and Chief Financial Officer February 5, 1997
- ------------------------------- (Principal Financial Officer)
(JOSEPH A. ORLANDO)
/s/ BARBARA L. LOWENTHAL Vice President and Comptroller February 5, 1997
- ------------------------------- Principal Accounting Officer)
(BARBARA L. LOWENTHAL)
II-4
<PAGE>
/s/ PAUL M. DOUGAN Director February 5, 1997
- -------------------------------
(PAUL M. DOUGAN)
/s/ LAWRENCE D. GLAUBINGER Director February 5, 1997
- -------------------------------
(LAWRENCE D. GLAUBINGER
/s/ JAMES E. JORDAN Director February 5, 1997
- -------------------------------
(JAMES E. JORDAN)
/s/ JESSE CLYDE NICHOLS, III Director February 5, 1997
- -------------------------------
(JESSE CLYDE NICHOLS, III)
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Leucadia Capital Trust I has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
and State of New York, on this 5th day of February, 1997.
LEUCADIA CAPITAL TRUST I
By: /s/ Joseph A. Orlando
----------------------
Joseph A. Orlando
Administrator
By: /s/ Barbara L. Lowenthal
------------------------
Barbara L. Lowenthal
Administrator
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
4.1 Indenture, dated as of January 21, 1997, between the Company and The
Chase Manhattan Bank, as Trustee.
4.2 First Supplemental Indenture, dated as of January 21, 1997, between the
Company and The Chase Manhattan Bank, as Trustee, in respect of the
Company's 8.65% Junior Subordinated Deferrable Interest Debentures due
2027.
4.3 Form of Junior Subordinated Deferrable Interest Debenture (included
in the First Supplemental Indenture filed as Exhibit 4.2 to this
Registration Statement).
4.4 Certificate of Trust of Leucadia Capital Trust I dated January 10, 1997.
4.5 Amended and Restated Declaration of Trust of Leucadia Capital Trust I
(the "Trust"), dated as of January 21, 1997, among the Company, as
sponsor, the Administrators thereof, Chase Manhattan Bank Delaware, as
Delaware Trustee, The Chase Manhattan Bank, as Institutional Trustee
and the holders from time to time of undivided interests in the assets
of the Trust.**
4.6 Form of Capital Security Certificate for the Trust (included in the
Amended and Restated Declaration filed as Exhibit 4.5 to this
Registration Statement).
4.7 Capital Securities Guarantee Agreement, dated as of January 21, 1997,
between the Company and The Chase Manhattan Bank, as Guarantee Trustee.
4.8 Registration Rights Agreement, dated January 21, 1997, among the
Company, the Trust and Salomon Brothers Inc., as Representative for the
limited Purchasers.
5.1 Opinion of Richards, Layton & Finger as to validity of the New Capital
Securities.**
5.2 Opinion of Weil, Gotshal & Manges LLP as to validity of the New
Subordinated Debt Securities and the New Guarantee to be issued by
the Company.**
8 Opinion of Weil, Gotshal & Manges LLP as to certain federal income tax
matters.**
12 Statement of Computation of Ratios of Earnings to Fixed Charges (filed
as Exhibit 12 to the Company's Registration Statement on Form S-3,
File No. 333-59463).*
23.1 Consent of Cooper & Lybrand L.L.P.
23.2 Consent of Richards, Layton & Finger (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
<PAGE>
23.3 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as
Exhibit 5.2 to this Registration Statement).
23.4 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed
as Exhibit 8 to this Registration Statement).
24 Powers of Attorney (included on signature page of this Part II).
25.1 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Indenture.**
25.2 Form T-1 Statement of Eligibility of The Chase Manhattan Bank to act
as trustee under the Amended and Restated Declaration.**
25.3 Form T-1 Statement of Eligibility of The Chase Manhattan Bank under
the Guarantee for the benefit of the holders of Capital Securities.**
99.1 Form of Letter of Transmittal.**
99.2 Form of Notice of Guaranteed Delivery.**
99.3 Form of Exchange Agent Agreement.**
___________
* Incorporated by reference.
** To be filed by amendment.
C:\DATA\WP\76830\0146\1197\FRM2037U.030
EXHIBIT 4.1
======================================================================
LEUCADIA NATIONAL CORPORATION
as Issuer
INDENTURE
Dated as of January 21, 1997
THE CHASE MANHATTAN BANK
as Trustee
SUBORDINATED DEBT SECURITIES
======================================================================
<PAGE>
TIE-SHEET
---------
of provisions of Trust Indenture Act of 1939 with Indenture dated as
of January 21, 1997 among Leucadia National Corporation, as Issuer,
and The Chase Manhattan Bank, as Trustee:
ACT SECTION INDENTURE SECTION
310(a)(1) . . . . . . . . . . . . . . . . . 6.09
310(a)(2) . . . . . . . . . . . . . . . . . 6.09
310(a)(3) . . . . . . . . . . . . . . . . . N.A.
310(a)(4) . . . . . . . . . . . . . . . . . N.A.
310(a)(5) . . . . . . . . . . . . . . . . . 6.09
310(b) . . . . . . . . . . . . . . . . . . 6.08; 6.10(a)(b)
and (d)
310(c) . . . . . . . . . . . . . . . . . . N.A.
311(a) and (b) . . . . . . . . . . . . . . 6.13
311(c) . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . 4.01
312(b) and (c) . . . . . . . . . . . . . . 4.02(b)
313(a) . . . . . . . . . . . . . . . . . . 4.04(a)
313(b)(1) . . . . . . . . . . . . . . . . . N.A.
313(b)(2) . . . . . . . . . . . . . . . . . 4.04(a)
313(c) . . . . . . . . . . . . . . . . . . 4.04(a)
313(d) . . . . . . . . . . . . . . . . . . 4.04(b)
314(a) . . . . . . . . . . . . . . . . . . 4.03
314(b) . . . . . . . . . . . . . . . . . . N.A.
314(c)(1) and (2) . . . . . . . . . . . . . 13.06
314(c)(3) . . . . . . . . . . . . . . . . . N.A.
314(d) . . . . . . . . . . . . . . . . . . N.A.
314(e) . . . . . . . . . . . . . . . . . . 13.06
314(f) . . . . . . . . . . . . . . . . . . N.A.
315(a)(c) and (d) . . . . . . . . . . . . . 6.01
315(b) . . . . . . . . . . . . . . . . . . 5.08
315(e) . . . . . . . . . . . . . . . . . . 5.09
316(a)(1) . . . . . . . . . . . . . . . . . 5.01; 5.07
316(a)(2) . . . . . . . . . . . . . . . . . N.A.
316(a) last sentence . . . . . . . . . . . 7.04
316(b) . . . . . . . . . . . . . . . . . . 5.04
317(a) . . . . . . . . . . . . . . . . . . 5.02
317(b) . . . . . . . . . . . . . . . . . . 3.04(a)
318(a) . . . . . . . . . . . . . . . . . . 13.08
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . 2
Bankruptcy Law . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . 2
Capital Securities . . . . . . . . . . . . . . . . . . . . . 2
Capital Securities Guarantee . . . . . . . . . . . . . . . . 3
Certificate . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities . . . . . . . . . . . . . . . . . . . . . 3
Common Securities Guarantee . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Custodian . . . . . . . . . . . . . . . . . . . . . . . . . 3
Debt Security . . . . . . . . . . . . . . . . . . . . . . . 3
Debt Security Register . . . . . . . . . . . . . . . . . . . 3
Declaration . . . . . . . . . . . . . . . . . . . . . . . . 4
Default . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . 4
Institutional Trustee . . . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . . . . 4
Leucadia Trust . . . . . . . . . . . . . . . . . . . . . . . 5
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officer . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Date . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . 5
outstanding . . . . . . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . . . 6
Principal Office of the Trustee . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . . 7
Securityholder . . . . . . . . . . . . . . . . . . . . . . . 7
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 7
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 8
<PAGE>
Trust Indenture Act 8
Trust Securities . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . 8
Yield to Maturity . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
DEBT SECURITIES
SECTION 2.01. Forms Generally. . . . . . . . . . . . . . . . . . 9
SECTION 2.02. Form of Trustee's Certificate of Authentication. . 9
SECTION 2.03. Amount Unlimited; Issuable in Series. . . . . . . 9
SECTION 2.04. Execution and Authentication. . . . . . . . . . . 12
SECTION 2.05. Date and Denomination of Debt Securities. . . . . 13
SECTION 2.06. [Reserved]. . . . . . . . . . . . . . . . . . . . 15
SECTION 2.07. Exchange and Registration of Transfer of Debt
Securities. . . . . . . . . . . . . . . . . . . 15
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Debt
Securities. . . . . . . . . . . . . . . . . . . 18
SECTION 2.09. Temporary Debt Securities. . . . . . . . . . . . . 19
SECTION 2.10. Cancellation of Debt Securities Paid, etc. . . . . 20
SECTION 2.11. Global Securities. . . . . . . . . . . . . . . . . 20
SECTION 2.12. CUSIP Numbers. . . . . . . . . . . . . . . . . . . 21
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest. . . . 22
SECTION 3.02. Offices for Notices and Payments, etc. . . . . . . 22
SECTION 3.03. Appointments to Fill Vacancies in Trustee's
Office. . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.04. Provision as to Paying Agent. . . . . . . . . . . 23
SECTION 3.05. Certificate to Trustee. . . . . . . . . . . . . . 24
SECTION 3.06. [Reserved]. . . . . . . . . . . . . . . . . . . . 25
SECTION 3.07. Limitation on Dividends. . . . . . . . . . . . . . 25
SECTION 3.08. Covenants as to Leucadia Trusts. . . . . . . . . . 26
SECTION 3.09. Calculation of Original Issue Discount. . . . . . 26
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists. . . . . . . . . . . . . . 27
SECTION 4.02. Communication by Holders with Other Holders. . . . 27
SECTION 4.03. [Reserved]. . . . . . . . . . . . . . . . . . . . 27
SECTION 4.04. Reports by the Trustee. . . . . . . . . . . . . . 27
<PAGE>
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
SECTION 5.01. Events of Default. . . . . . . . . . . . . . . . . 28
SECTION 5.02. Payment of Debt Securities on Default; Suit Therefor.31
SECTION 5.03. Application of Moneys Collected by Trustee. . . . 33
SECTION 5.04. Proceedings by Securityholders. . . . . . . . . . 34
SECTION 5.05. Proceedings by Trustee. . . . . . . . . . . . . . 35
SECTION 5.06. Remedies Cumulative and Continuing. . . . . . . . 35
SECTION 5.07. Direction of Proceedings and Waiver of
Defaults by Majority of Securityholders. . . . . . 35
SECTION 5.08. Notice of Defaults. . . . . . . . . . . . . . . . 37
SECTION 5.09. Undertaking to Pay Costs. . . . . . . . . . . . . 37
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee. . . . . . 38
SECTION 6.02. Reliance on Documents, Opinions, etc. . . . . . . 39
SECTION 6.03. No Responsibility for Recitals, etc. . . . . . . . 41
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Debt
Securities. . . . . . . . . . . . . . . . . . . 41
SECTION 6.05. Moneys to be Held in Trust. . . . . . . . . . . . 41
SECTION 6.06. Compensation and Expenses of Trustee. . . . . . . 42
SECTION 6.07. Officers' Certificate as Evidence. . . . . . . . . 43
SECTION 6.08. Conflicting Interest of Trustee. . . . . . . . . . 43
SECTION 6.09. Eligibility of Trustee. . . . . . . . . . . . . . 43
SECTION 6.10. Resignation or Removal of Trustee. . . . . . . . . 44
SECTION 6.11. Acceptance by Successor Trustee. . . . . . . . . . 46
SECTION 6.12. Succession by Merger, etc. . . . . . . . . . . . . 47
SECTION 6.13. Limitation on Rights of Trustee as a Creditor. . . 48
SECTION 6.14. Authenticating Agents. . . . . . . . . . . . . . . 48
CONCERNING THE SECURITYHOLDERS . . . . . . . 49
SECTION 7.01. Action by Securityholders. . . . . . . . . . . . . 49
SECTION 7.02. Proof of Execution by Securityholders. . . . . . . 50
SECTION 7.03. Who Are Deemed Absolute Owners. . . . . . . . . . 51
SECTION 7.04. Debt Securities Owned by Company Deemed Not
Outstanding. . . . . . . . . . . . . . . . . . . 51
SECTION 7.05. Revocation of Consents; Future Holders Bound. . . 52
<PAGE>
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings. . . . . . . . . . . . . . . 52
SECTION 8.02. Call of Meetings by Trustee. . . . . . . . . . . . 53
SECTION 8.03. Call of Meetings by Company or Securityholders. . 53
SECTION 8.04. Qualifications for Voting. . . . . . . . . . . . . 53
SECTION 8.05. Regulations. . . . . . . . . . . . . . . . . . . . 54
SECTION 8.06. Voting. . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.07. Quorum; Actions. . . . . . . . . . . . . . . . . . 55
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of
Securityholders. . . . . . . . . . . . . . . . . 56
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders. . . . . . . . . . . . . . . . . 58
SECTION 9.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures. . . . . . . . . . . . . 60
SECTION 9.04. Notation on Debt Securities. . . . . . . . . . . . 60
SECTION 9.05. Evidence of Compliance of Supplemental Indenture. 61
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms. . 61
SECTION 10.02. Successor Entity to be Substituted. . . . . . . . 62
SECTION 10.03. Opinion of Counsel to be Given to Trustee. . . . . 63
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture. . . . . . . . . . . . . . 63
SECTION 11.02. Deposited Moneys to be Held in Trust by Trustee. . 64
SECTION 11.03. Paying Agent to Repay Moneys Held. . . . . . . . . 64
SECTION 11.04. Return of Unclaimed Moneys. . . . . . . . . . . . 64
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Debt Securities Solely Corporate
Obligations. . . . . . . . . . . . . . . . . . . 65
<PAGE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors. . . . . . . . . . . . . . . . . . . . 65
SECTION 13.02. Official Acts by Successor Entity. . . . . . . . . 65
SECTION 13.03. Surrender of Company Powers. . . . . . . . . . . . 65
SECTION 13.04. Addresses for Notices, etc. . . . . . . . . . . . 66
SECTION 13.05. Governing Law. . . . . . . . . . . . . . . . . . . 66
SECTION 13.06. Evidence of Compliance with Conditions
Precedent. . . . . . . . . . . . . . . . . . . . 66
SECTION 13.07. Non-Business Days. . . . . . . . . . . . . . . . . 67
SECTION 13.08. Trust Indenture Act to Control. . . . . . . . . . 67
SECTION 13.09. Table of Contents, Headings, etc. . . . . . . . . 67
SECTION 13.10. Execution in Counterparts. . . . . . . . . . . . . 67
SECTION 13.11. Separability. . . . . . . . . . . . . . . . . . . 68
SECTION 13.12. Assignment. . . . . . . . . . . . . . . . . . . . 68
SECTION 13.13. Acknowledgment of Rights. . . . . . . . . . . . . 68
ARTICLE XIV
REDEMPTION OF SECURITIES -- MANDATORY AND
OPTIONAL SINKING FUND
SECTION 14.01. Applicability of Article. . . . . . . . . . . . . 69
SECTION 14.02. Notice of Redemption; Selection of Debt
Securities. . . . . . . . . . . . . . . . . . . 69
SECTION 14.03. Payment of Debt Securities Called for
Redemption. . . . . . . . . . . . . . . . . . . 70
SECTION 14.04. Mandatory and Optional Sinking Fund. . . . . . . . 71
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
SECTION 15.01. Agreement to Subordinate. . . . . . . . . . . . . 74
SECTION 15.02. Default on Senior Indebtedness. . . . . . . . . . 74
SECTION 15.03. Liquidation; Dissolution; Bankruptcy. . . . . . . 75
SECTION 15.04. Subrogation. . . . . . . . . . . . . . . . . . . . 76
SECTION 15.05. Trustee to Effectuate Subordination. . . . . . . . 78
SECTION 15.06. Notice by the Company. . . . . . . . . . . . . . . 78
SECTION 15.07. Rights of the Trustee; Holders of Senior
Indebtedness. . . . . . . . . . . . . . . . . . 79
SECTION 15.08. Subordination May Not Be Impaired. . . . . . . . . 80
<PAGE>
THIS INDENTURE, dated as of January 21, 1997, between
Leucadia National Corporation, a New York corporation (hereinafter
sometimes called the "Company"), and The Chase Manhattan Bank, a New
York banking corporation, as trustee (hereinafter sometimes called the
"Trustee"),
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issue from time to time of its subordinated
unsecured debentures, notes or other evidence of indebtedness to be
issued in one or more series (the "Debt Securities") up to such
principal amount or amounts as may from time to time be authorized in
accordance with the terms of this Indenture and, to provide the terms
and conditions upon which the Debt Securities are to be authenticated,
issued and delivered, the Company has duly authorized the execution of
this Indenture; and
WHEREAS, all acts and things necessary to make this
Indenture a valid agreement according to its terms, have been done and
performed;
NOW, THEREFORE, This Indenture Witnesseth:
In consideration of the premises, and the purchase of the
Debt Securities by the holders thereof, the Company covenants and
agrees with the Trustee for the equal and proportionate benefit of the
respective holders from time to time of the Debt Securities or of a
series thereof, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
-----------
The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this
Section 1.01. All other terms used in this Indenture which are
defined in the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), or which are by reference therein defined in the
Securities Act of 1933, as amended (the "Securities Act"), shall
(except as herein otherwise expressly provided or unless the context
otherwise requires) have the meanings assigned to such terms in said
Trust Indenture Act and
<PAGE>
in said Securities Act as in force at the date of this Indenture as
originally executed. 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.
"Affiliate" means, with respect to a specified Person,
(a) any Person directly or indirectly owning, controlling or holding
with power to vote 10% or more of the outstanding voting securities or
other ownership interests of the specified Person, (b) any Person 10%
or more of whose outstanding voting securities or other ownership
interests are directly or indirectly owned, controlled or held with
power to vote by the specified Person, (c) any Person directly or
indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person
is a general partner, (e) any executive officer or director of the
specified Person, and (f) if the specified Person is an individual,
any entity of which the specified Person is an executive officer,
director or general partner.
"Authenticating Agent" shall mean any agent or agents of the
Trustee which at the time shall be appointed and acting pursuant to
Section 6.14.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors.
"Board of Directors" shall mean the board of directors or
the executive committee or any other duly authorized designated
officers of the Company.
"Board Resolution" shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to
have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification and delivered to
the Trustee.
"Business Day" shall mean, with respect to any series of
Debt Securities, any day other than a Saturday, Sunday or any other
day on which banking institutions in New York City (in the State of
New York) are permitted or required by any applicable law to close.
"Capital Securities" shall mean undivided beneficial
interests in the assets of a Leucadia Trust which rank pari passu with
Common Securities issued by such Leucadia Trust; provided, however,
-------- -------
that upon the occurrence of an Event of Default (as
<PAGE>
defined in the Declaration with respect to such Leucadia Trust), the
rights of holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights of holders of such Capital Securities.
"Capital Securities Guarantee" shall mean, in respect of any
Leucadia Trust, any guarantee that the Company may enter into with The
Chase Manhattan Bank or other Persons that operates directly or
indirectly for the benefit of holders of Capital Securities of such
Leucadia Trust.
"Certificate" shall mean a certificate signed by any one of
the principal executive officer, the principal financial officer or
the principal accounting officer of the Company.
"Common Securities" shall mean undivided beneficial
interests in the assets of a Leucadia Trust which rank pari passu with
Capital Securities issued by such Leucadia Trust; provided, however,
-------- -------
that upon the occurrence of an Event of Default (as defined in the
Declaration with respect to such Leucadia Trust), the rights of
holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights of holders of such Capital Securities.
"Common Securities Guarantee" shall mean, in respect of any
Leucadia Trust, any guarantee that the Company may enter into with any
Person or Persons and that operates directly or indirectly for the
benefit of holders of Common Securities of such Leucadia Trust.
"Company"" shall mean Leucadia National Corporation, a New
York corporation, and, subject to the provisions of Article X, shall
include its successors and assigns.
"Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Debt Security" or "Debt Securities" shall have the meaning
stated in the first recital of this Indenture and more particularly
means any debt security or debt securities, as the case may be,
authenticated and delivered under this Indenture.
"Debt Security Register" shall have the meaning specified in
Section 2.07.
<PAGE>
"Declaration," with respect to a Leucadia Trust, shall mean
the Amended and Restated Declaration of Trust of such Leucadia Trust,
as amended or supplemented from time to time.
"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Depositary" shall mean, with respect to Debt Securities of
any series for which the Company shall determine that such Debt
Securities will be issued as a Global Security, The Depository Trust
Company, New York, New York, another clearing agency, or any successor
registered as a clearing agency under the Exchange Act, or other
applicable statute or regulation, which, in each case, shall be
designated by the Company pursuant to either Section 2.03 or 2.11.
"Event of Default" shall mean any event specified in
Section 5.01, continued for the period of time, if any, and after the
giving of the notice, if any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Global Security" shall mean, with respect to any series of
Debt Securities, a Debt Security executed by the Company and delivered
by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture, which shall be
registered in the name of the Depositary or its nominee.
"Indenture" shall mean this instrument as originally
executed or, if amended or supplemented as herein provided, as so
amended or supplemented, or both, and shall include the form and terms
of particular series of Debt Securities established as contemplated
hereunder.
"Institutional Trustee" has the meaning set forth in the
Declaration of the applicable Leucadia Trust.
"Interest" shall mean, when used with respect to noninterest
bearing Debt Securities, interest payable after maturity.
"Interest Payment Date," when used with respect to any
installment of interest on a Debt Security of a particular series,
shall mean the date specified in such Debt Security or in a Board
Resolution or in an indenture supplemental hereto with
<PAGE>
respect to such series as the fixed date on which an installment of
interest with respect to Debt Securities of that series is due and
payable.
"Leucadia Trust" shall mean a Delaware business trust, or
any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debt Securities under
this Indenture, of which the Company is the sponsor.
"Mortgage" shall mean and include any mortgage, pledge,
lien, security interest, conditional sale or other title retention
agreement or other similar encumbrance.
"Officer" means the Chairman of the Board, the President,
any Vice President, the Chief Financial Officer or the Treasurer of
the Company.
"Officers' Certificate" shall mean a certificate signed by
an Officer and by the Comptroller, an Assistant Comptroller, the
Secretary or an Assistant Secretary of the Company, and delivered to
the Trustee. Each such certificate shall include the statements
provided for in Section 13.06 if and to the extent required by the
provisions of such Section.
"Opinion of Counsel" shall mean an opinion in writing signed
by legal counsel, who may be an employee of or counsel to the Company,
or may be other counsel satisfactory to the Trustee. Each such
opinion shall include the statements provided for in Section 13.06 if
and to the extent required by the provisions of such Section.
"Original Issue Date" of any Debt Security (or any portion
thereof) shall mean the earlier of (a) the date of such Debt Security
or (b) the date of any Debt Security (or portion thereof) for which
such Debt Security was issued (directly or indirectly) on registration
of transfer, exchange or substitution.
"Original Issue Discount Security" shall mean any Debt
Security which provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of
the maturity thereof pursuant to Section 5.01.
The term "outstanding," when used with reference to Debt
Securities, shall, subject to the provisions of Section 7.04, mean, as
of any particular time, all Debt
<PAGE>
Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except
(a) Debt Securities theretofore canceled by the Trustee or
the Authenticating Agent or delivered to the Trustee for
cancellation;
(b) Debt Securities, or portions thereof, for the payment
or redemption of which moneys in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent
(other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as
its own paying agent); provided that, if such Debt Securities, or
portions thereof, are to be redeemed prior to maturity thereof,
notice of such redemption shall have been given as provided in
Article Fourteen or provision satisfactory to the Trustee shall
have been made for giving such notice; and
(c) Debt Securities paid pursuant to Section 2.08 or in
lieu of or in substitution for which other Debt Securities shall
have been authenticated and delivered pursuant to the terms of
Section 2.08 unless proof satisfactory to the Company and the
Trustee is presented that any such Debt Securities are held by
bona fide holders in due course.
In determining whether the holders of the requisite
principal amount of outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding for such purposes shall be the
amount of the principal thereof that would be due and payable as of
the date of such determination upon a declaration of acceleration of
the maturity thereof pursuant to Section 5.01.
"Person" shall mean any individual, corporation, limited
liability company, partnership, joint venture, association, joint-
stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Predecessor Security" of any particular Debt Security means
every previous Debt Security evidencing all or a portion of the same
debt as that evidenced by such particular Debt Security; and, for the
purposes of this definition, any Debt Security authenticated and
delivered under Section 2.08 in lieu of a lost,
<PAGE>
destroyed or stolen Debt Security shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debt Security.
"Principal Office of the Trustee," or other similar term,
shall mean the office of the Trustee, at which at any particular time
its corporate trust business shall be principally administered.
"Responsible Officer," when used with respect to the
Trustee, shall mean any officer of the Trustee with direct
responsibility for the administration of this Indenture or to whom any
corporate trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"Securityholder," "holder of Debt Securities," or other
similar terms, shall mean any Person in whose name at the time a
particular Debt Security is registered on the register kept by the
Company or the Trustee for that purpose in accordance with the terms
hereof.
"Senior Indebtedness" means, with respect to the Company
(except any other obligations which rank pari passu with or junior to
the Debt Securities), (i) the principal, premium, if any, and interest
in respect of (A) indebtedness of the Company for money borrowed, and
(B) indebtedness evidenced by securities, debentures, notes, bonds or
other similar instruments issued by the Company, including, without
limitation, any current or future indebtedness under any indenture
(other than this Indenture) to which the Company is a party, (ii) all
capital lease obligations of the Company, (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property,
all conditional sale obligations of the Company and all obligations of
the Company under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business), (iv) all
obligations of the Company for the reimbursement on any letter of
credit, any banker's acceptance, any security purchase facility, any
repurchase agreement or similar arrangement, any interest rate swap,
any other hedging arrangement, any obligation under options or any
similar credit or other transaction, (v) all obligations of the type
referred to in clauses (i) through (iv) above of other Persons for the
payment of which the Company is responsible or liable as obligor,
guarantor or otherwise, and (vi) all obligations of the type referred
to in clauses (i) through (v) above of other Persons secured by any
lien on any property or asset of the Company (whether or not such
obligation is assumed by the Company), except for (1) any indebtedness
between or among the Company or any Affiliate of the Company and
(2) any series of Debt
<PAGE>
Securities issued pursuant to this Indenture and guarantees in respect
of any such series of Debt Securities. Senior Indebtedness shall not
include Debt Securities of any series or any junior subordinated debt
securities issued in the future with subordination terms substantially
similar to the Debt Securities of any series. Senior Indebtedness
shall continue to be Senior Indebtedness and be entitled to the
benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior
Indebtedness.
"Subsidiary" shall mean a corporation or business trust a
majority of whose Voting Stock is owned by the Company or a
Subsidiary.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939 as in force at the date of execution of this Indenture, except as
provided in Section 9.03; provided, however, that, in the event the
-------- -------
Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" shall mean, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Securities" shall mean Common Securities and Capital
Securities of a Leucadia Trust.
"Trustee shall mean the Person identified as "Trustee" in
the first paragraph hereof, and, subject to the provisions of
Article VI hereof, shall also include its successors and assigns as
Trustee hereunder. The term "Trustee" as used with respect to a
particular series of Debt Securities shall mean the trustee with
respect to that series.
"Voting Stock" shall mean with respect to any Person, any
and all shares, interests, participations or other equivalents
(however designated) having general voting power under ordinary
circumstances to elect directors to the board of directors (or the
equivalent) of such Person, but shall not include any such shares,
interests, participations or other equivalents that have or would have
such voting power solely by reason of the happening of any
contingency.
"Yield to Maturity" shall mean the yield to maturity on a
series of Debt Securities, calculated at the time of issuance of such
series of Debt Securities, or if applicable, at the most recent
predetermination of interest on such series and calculated in
accordance with accepted financial practice.
<PAGE>
ARTICLE II
DEBT SECURITIES
SECTION 2.01. Forms Generally.
---------------
The Debt Securities of each series shall be in substantially
the form as shall be established by or pursuant to a Board Resolution
and as set forth in an Officers' Certificate of the Company or in one
or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any law
or with any rules made pursuant thereto or with any rules of any
securities exchange or as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their
execution of the Debt Securities.
In the event the Debt Securities are issued in definitive
form pursuant to this Indenture, such Debt Securities shall be typed
printed, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers
executing such Debt Securities, as evidenced by their execution of
such Debt Securities.
SECTION 2.02. Form of Trustee's Certificate of
--------------------------------
Authentication.
--------------
The Trustee's certificate of authentication on all Debt
Securities shall be in substantially the following form:
This is one of the Debt Securities of the series designated
therein referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By
----------------------------
Authorized Officer
SECTION 2.03. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Debt Securities which may
be authenticated and delivered under this Indenture is unlimited.
<PAGE>
The Debt Securities may be issued in one or more series up
to the aggregate principal amount of Debt Securities of that series
from time to time authorized by or pursuant to a Board Resolution of
the Company or pursuant to one or more indentures supplemental hereto.
Prior to the initial issuance of Debt Securities of any series, there
shall be established in or pursuant to a Board Resolution of the
Company and set forth in an Officers' Certificate of the Company or
established in one or more indentures supplemental hereto:
(1) the title of the Debt Securities of the series
(which shall distinguish Debt Securities of the series from all
other Debt Securities);
(2) any limit upon the aggregate principal amount of
the Debt Securities of the series which may be authenticated and
delivered under this Indenture (except for Debt Securities
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Debt Securities of the
series pursuant to Section 2.07, 2.08, 2.09, 9.04 or 14.03);
(3) the date or dates on which the principal of and
premium, if any, on the Debt Securities of the series is payable;
(4) the rate or rates at which the Debt Securities of
the series shall bear interest, if any, or the method by which
such interest may be determined, the date or dates from which
such interest shall accrue, the Interest Payment Dates on which
such interest shall be payable or the manner of determination of
such Interest Payment Dates and the record dates for the
determination of holders to whom interest is payable on any such
Interest Payment Dates;
(5) the place or places where the principal of, and
premium, if any, and any interest on Debt Securities of the
series shall be payable;
(6) the right, if any, to extend the interest payment
periods and the duration of such extension;
(7) the price or prices at which, the period or
periods within which and the terms and conditions upon which Debt
Securities of the series may be redeemed, in whole or in part, at
the option of the Company, pursuant to any sinking fund or
otherwise:
<PAGE>
(8) the obligation, if any, of the Company to redeem,
purchase or repay Debt Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a
Securityholder thereof and the price or prices at which and the
period or periods within which, and the terms and conditions upon
which Debt Securities of the series shall be redeemed, purchased
or repaid, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Debt
Securities of the series shall be issuable;
(10) if other than the principal amount thereof, the
portion of the principal amount of Debt Securities of the series
which shall be payable upon declaration of acceleration of the
maturity thereof pursuant to Section 5.01 or provable in
bankruptcy pursuant to Section 5.02;
(11) any Events of Default with respect to the Debt
Securities of a particular series, if not set forth herein;
(12) the form of the Debt Securities of the series
including the form of the certificate of authentication of such
series;
(13) any trustee, authenticating or paying agents,
warrant agents, transfer agents or registrars with respect to the
Debt Securities of such series;
(14) whether the Debt Securities of the series shall be
issued in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary for such Global
Security or Securities, and whether beneficial owners of
interests in any such Global Securities may exchange such
interests for other Debt Securities of such series in the manner
provided in Section 2.07, and the manner and the circumstances
under which and the place or places where any such exchanges may
occur if other than in the manner provided in Section 2.07, and
any other terms of the series relating to the global nature of
the Global Securities of such series and the exchange,
registration or transfer thereof and the payment of any principal
thereof, or interest or premium, if any, thereon;
<PAGE>
(15) if the Debt Securities of the series are issued
pursuant to an exemption from registration under the Securities
Act; and
(16) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Debt Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be
provided in or pursuant to such resolution of the Board of Directors
or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution of the Company, a copy of an
appropriate record of such action shall be certified by the Secretary
or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Officers' Certificate of the
Company setting forth the terms of the series.
SECTION 2.04. Execution and Authentication.
----------------------------
One Officer and the Secretary or an Assistant Secretary of
the Company shall sign Debt Securities of any series for the Company
by manual or facsimile signature. The Company's seal shall be
reproduced on the Debt Securities.
If an Officer whose signature is on a Debt Security no
longer holds that office at the time the Debt Security is
authenticated, the Debt Security shall be valid nevertheless.
A Debt Security shall not be valid until the Trustee or an
Authenticating Agent manually signs the certificate of authentication
on the Debt Security. The signature shall be conclusive evidence that
the Debt Security has been authenticated under this Indenture.
The Trustee may appoint an Authenticating Agent to
authenticate Debt Securities. An Authenticating Agent may
authenticate Debt Securities whenever the Trustee may do so except on
original issuance. Each reference in this Indenture to authentication
by the Trustee includes authentication by such agent.
The Trustee shall have the right to decline to authenticate
and deliver any Debt Securities under this Section
<PAGE>
if the Trustee, being advised by counsel, determines that such action
may not lawfully be taken or if the Trustee in good faith by its board
of directors or trustees, executive committee, or a trust committee of
directors or trustees and/or vice presidents shall determine that such
action would expose the Trustee to personal liability to existing
holders.
SECTION 2.05. Date and Denomination of Debt Securities.
----------------------------------------
The Debt Securities shall be issuable as registered Debt
Securities without coupons and in such denominations as shall be
specified as contemplated by Section 2.03. In the absence of any such
specification with respect to the Debt Securities of any series, the
Debt Securities of such series shall be issuable in the denominations
of $1,000 and any multiple thereof. The Debt Securities shall be
numbered, lettered, or otherwise distinguished in such manner or in
accordance with such plans as the officers executing the same may
determine with the approval of the Trustee as evidenced by the
execution and authentication thereof.
Every Debt Security shall be dated the date of its
authentication, shall bear interest, if any, from such date and shall
be payable on such dates, in each case, as contemplated by
Section 2.03. The interest installment on any Security that is
payable, and is punctually paid or duly provided for, on any Interest
Payment Date for Debt Securities of that series shall be paid to the
Person in whose name said Debt Security (or one or more Predecessor
Securities) is registered at the close of business on the regular
record date for such interest installment. In the event that any Debt
Security of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular record
date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Debt Security will be paid
upon presentation and surrender of such Debt Security as provided in
Section 14.03.
Any interest on any Debt Security that is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date
for a Debt Security of the same series (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered
holder on the relevant regular record date by virtue of having been
such holder; and such Defaulted Interest shall be paid by the Company,
at its election, as provided in clause (1) or clause (2) below:
<PAGE>
(1) The Company may make payment of any Defaulted
Interest on Debt Securities to the Persons in whose names such
Debt Securities (or their respective Predecessor Securities) are
registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid
on each such Debt Security and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior
to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such
Defaulted Interest which shall not be more than 15 nor less than
ten days prior to the date of the proposed payment and not less
than ten days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date
therefor to be mailed, first class postage prepaid, to each
Securityholder at his or her address as it appears in the Debt
Security Register, not less than ten 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 such Debt Securities (or their respective
Predecessor Securities) are registered on such special record
date and shall be no longer payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted
Interest on any Debt Securities in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which such Securities may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
In respect of any series of Debt Securities in which the right to
extend the interest payment periods has been provided pursuant to
Section 2.03(6), any interest scheduled to become payable on an
<PAGE>
Interest Payment Date occurring during a valid extension of an
interest payment period shall not be Defaulted Interest and shall be
payable on such other date as may be specified in the terms of such
Debt Securities.
Unless otherwise set forth in a Board Resolution of the
Company or one or more indentures supplemental hereto establishing the
terms of any series of Debt Securities pursuant to Section 2.01
hereof, the term "regular record date" as used in this Section with
respect to a series of Debt Securities with respect to any Interest
Payment Date for such series shall mean either the fifteenth day of
the month immediately preceding the month in which an Interest Payment
Date established for such series pursuant to Section 2.01 hereof shall
occur, if such Interest Payment Date is the first day of a month, or
the last day of the month immediately preceding the month in which an
Interest Payment Date established for such series pursuant to
Section 2.01 hereof shall occur, if such Interest Payment Date is the
fifteenth day of a month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each
Debt Security of a series delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other
Debt Security of such series shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other
Debt Security.
SECTION 2.06. [Reserved].
----------
SECTION 2.07. Exchange and Registration of Transfer of Debt
---------------------------------------------
Securities.
----------
Subject to Section 2.03(14), Debt Securities of any series
may be exchanged for a like aggregate principal amount of Debt
Securities of the same series of other authorized denominations. Debt
Securities to be exchanged may be surrendered at the principal
corporate trust office of the Trustee or at any office or agency to be
maintained by the Company for such purpose as provided in Section
3.02, and the Company shall execute, the Company or the Trustee shall
register and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange therefor the
Debt Security or Debt Securities which the Securityholder making the
exchange shall be entitled to receive. Subject to Section 2.03(14),
upon due presentment for registration of
<PAGE>
transfer of any Debt Security of any series at the principal corporate
trust office of the Trustee or at any office or agency of the Company
maintained for such purpose as provided in Section 3.02, the Company
shall execute, the Company or the Trustee shall register and the
Trustee or the Authenticating Agent shall authenticate and make
available for delivery in the name of the transferee or transferees a
new Debt Security or Debt Securities of the same series for a like
aggregate principal amount. Registration or registration of transfer
of any Debt Security by the Trustee or by any agent of the Company
appointed pursuant to Section 3.02, and delivery of such Debt
Security, shall be deemed to complete the registration or registration
of transfer of such Debt Security.
The Company shall cause to be kept, at the office or agency
maintained for the purpose of registration of transfer and for
exchange as provided in Section 3.02, a register (the "Debt Security
Register") for each series of Debt Securities issued hereunder in
which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration and transfer of all Debt
Securities as in this Article Two provided. Such register shall be in
written form or in any other form capable of being converted into
written form within a reasonable time.
All Debt Securities presented for registration of transfer
or for exchange or payment shall (if so required by the Company or the
Trustee or the Authenticating Agent) be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee or the Authenticating
Agent duly executed by, the holder or his attorney duly authorized in
writing.
No service charge shall be made for any exchange or
registration of transfer of Debt Securities, but the Company or the
Trustee may require payment of a sum sufficient to cover any tax, fee
or other governmental charge that may be imposed in connection
therewith.
The Company or the Trustee shall not be required to exchange
or register a transfer of (a) any Debt Security for a period of 15
days next preceding the date of selection of Debt Securities of such
series for redemption, or (b) any Debt Securities of any series
selected, called or being called for redemption in whole or in part,
except in the case of any Debt Securities of any series to be redeemed
in part, the portion thereof not so to be redeemed.
<PAGE>
Notwithstanding the foregoing, if pursuant to Section 2.03,
a series of Debt Securities is issued pursuant to an exemption from
registration under the Securities Act, such Debt Securities may not be
transferred except in compliance with the restricted securities legend
set forth below (the "Restrictive Securities Legend"), unless
otherwise determined by the Company pursuant to Section 2.03 and in
accordance with applicable law:
THE DEBT SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS. NEITHER THIS DEBT SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER
OF THIS DEBT SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH DEBT SECURITY PRIOR TO THE DATE WHICH IS
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH LEUCADIA NATIONAL CORPORATION (THE "COMPANY") OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS DEBT SECURITY (OR
ANY PREDECESSOR OF THIS DEBT SECURITY) (THE "RESALE RESTRICTIONS
TERMINATION DATE") ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE DEBT SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1),(2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE DEBT SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A
COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
DEBT SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS. DEBT SECURITIES OWNED BY A PURCHASER THAT IS NOT A
QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN
<PAGE>
BOOK-ENTRY FORM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTIONS TERMINATION DATE.
Prior to any distribution of the Debt Securities to the
holders of Capital Securities in accordance with the related
Declaration, the Company and the Trustee shall enter into a
supplemental indenture pursuant to Article IX to provide for transfer
procedures and restrictions with respect to the Debt Securities
substantially similar to those contained in the Declaration with
respect to Capital Securities of the corresponding series to the
extent applicable in the circumstances existing at the time of such
distribution for purposes of assuring, if applicable, that no
registration of such Debt Securities is required under the Securities
Act of 1933, as amended.
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Debt
-----------------------------------------
Securities.
----------
In case any temporary or definitive Debt Security shall
become mutilated or be destroyed, lost or stolen, the Company shall
execute, and upon its written request the Trustee shall authenticate
and deliver, a new Debt Security of the same series bearing a number
not contemporaneously outstanding, in exchange and substitution for
the mutilated Debt Security, or in lieu of and in substitution for the
Debt Security so destroyed, lost or stolen. In every case the
applicant for a substituted Debt Security shall furnish to the Company
and the Trustee such security or indemnity as may be required by them
to save each of them harmless, and, in every case of destruction, loss
or theft, the applicant shall also furnish to the Company and the
Trustee evidence to their satisfaction of the destruction, loss or
theft of such Debt Security and of the ownership thereof.
The Trustee may authenticate any such substituted Debt
Security and deliver the same upon the written request or
authorization of any officer of the Company. Upon the issuance of any
substituted Debt Security, 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 connected
therewith. In case any Debt Security which has matured or is about to
mature or has been called for redemption in full shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Debt Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated
Debt Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as may be required
by them to save each of them harmless and, in case of
<PAGE>
destruction, loss or theft, evidence satisfactory to the Company and
to the Trustee of the destruction, loss or theft of such Security and
of the ownership thereof.
Every substituted Debt Security of any series issued
pursuant to the provisions of this Section 2.08 by virtue of the fact
that any such Debt Security is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debt Security shall be
found at any time, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debt
Securities of the same series duly issued hereunder. All Debt
Securities shall be held and owned upon the express condition that, to
the extent permitted by applicable law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debt Securities and shall preclude any and
all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities
without their surrender.
SECTION 2.09. Temporary Debt Securities.
-------------------------
Pending the preparation of definitive Debt Securities of any
series, the Company may execute and the Trustee shall authenticate and
make available for delivery temporary Debt Securities that are typed,
printed or lithographed. Temporary Debt Securities shall be issuable
in any authorized denomination, and substantially in the form of the
definitive Debt Securities but with such omissions, insertions and
variations as may be appropriate for temporary Debt Securities, all as
may be determined by the Company. Every such temporary Debt Security
shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and
with the same effect, as the definitive Debt Securities. Without
unreasonable delay the Company will execute and deliver to the Trustee
or the Authenticating Agent definitive Debt Securities and thereupon
any or all temporary Debt Securities of such series may be surrendered
in exchange therefor, at the principal corporate trust office of the
Trustee or at any office or agency maintained by the Company for such
purpose as provided in Section 3.02, and the Trustee or the
Authenticating Agent shall authenticate and make available for
delivery in exchange for such temporary Debt Securities a like
aggregate principal amount of such definitive Debt Securities. Such
exchange shall be made by the Company at its own expense and without
any charge therefor except that in case of any such exchange involving
a
<PAGE>
registration of transfer the Company may require payment of a sum
sufficient to cover any tax, fee or other governmental charge that may
be imposed in relation thereto. Until so exchanged, the temporary
Debt Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Debt Securities of
the same series authenticated and delivered hereunder.
SECTION 2.10. Cancellation of Debt Securities Paid, etc.
-----------------------------------------
All Debt Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer, shall, if
surrendered to the Company or any paying agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee
or any Authenticating Agent, shall be promptly canceled by it, and no
Debt Securities shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. All Debt
Securities canceled by any Authenticating Agent shall be delivered to
the Trustee. The Trustee shall destroy all canceled Debt Securities
unless the Company otherwise directs the Trustee in writing. If the
Company shall acquire any of the Debt Securities, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debt Securities unless and until the
same are surrendered to the Trustee for cancellation.
SECTION 2.11. Global Securities.
-----------------
(a) If the Company shall establish pursuant to Section 2.03
that the Debt Securities of a particular series are to be issued as a
Global Security, then the Company shall execute and the Trustee shall,
in accordance with Section 2.04, authenticate and deliver, a Global
Security that (i) shall represent, and shall be denominated in an
amount equal to the aggregate principal amount of, all or a specified
portion of the outstanding Debt Securities of such series, (ii) shall
be registered in the name of the Depositary or its nominee, (iii)
shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction and (iv) shall bear a legend substantially to
the following effect: "Except as otherwise provided in Section 2.11
of the Indenture, this Debt Security may be transferred, in whole but
not in part, only to another nominee of the Depositary or to a
successor Depositary or to a nominee of such successor Depositary."
(b) Notwithstanding the provisions of Section 2.07, the
Global Security of a series may be transferred, in whole but
<PAGE>
not in part and only in the manner provided in Section 2.07, only to
another nominee of the Depositary for such series, or to a successor
Depositary for such series selected or approved by the Company or to a
nominee of such successor Depositary.
(c) If at any time the Depositary for a series of the Debt
Securities notifies the Company that it is unwilling or unable to
continue as Depositary for such series or if at any time the
Depositary for such series shall no longer be registered or in good
standing under the Exchange Act, or other applicable statute or
regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, as the case may be,
this Section 2.11 shall no longer be applicable to the Debt Securities
of such series and the Company will execute, and subject to Section
2.07, the Trustee, upon written request of the Company, will
authenticate and make available for delivery the Debt Securities of
such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Security of such series in
exchange for such Global Security. In addition, the Company may at
any time determine that the Debt Securities of any series shall no
longer be represented by a Global Security and that the provisions of
this Section 2.11 shall no longer apply to the Debt Securities of such
series. In such event the Company will execute and subject to Section
2.07, the Trustee, upon receipt of an Officers' Certificate evidencing
such determination by the Company, will authenticate and make
available for delivery the Debt Securities of such series in
definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for
such Global Security. Upon the exchange of the Global Security for
such Debt Securities in definitive registered form without coupons, in
authorized denominations, the Global Security shall be canceled by the
Trustee. Such Debt Securities in definitive registered form issued in
exchange for the Global Security pursuant to this Section 2.11(c)
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 Trustee. The
Trustee shall deliver such Debt Securities to the Depositary for
delivery to the Persons in whose names such Debt Securities are so
registered.
<PAGE>
SECTION 2.12. CUSIP Numbers.
-------------
The Company in issuing the Debt Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to
Securityholders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as
printed on the Debt Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other
identification numbers printed on the Debt Securities, and any such
redemption shall not be affected by any defect in or omission of such
numbers. The Company will promptly notify the Trustee of any change
in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of each
series of Debt Securities that it will duly and punctually pay or
cause to be paid the principal of and premium, if any, and interest on
each of the Debt Securities of that series at the place, at the
respective times and in the manner provided in such Debt Securities.
At the option of the Company, each installment of interest on the Debt
Securities of any series may be paid (i) by mailing checks for such
interest payable to the order of the holders of Debt Securities
entitled thereto as they appear on the registry books of the Company
or (ii) if so specified with respect to the Debt Securities of such
series as contemplated by Section 2.03, by wire transfer to any
account with a banking institution located in the United States
designated by such Person to the paying agent no later than the
related record date.
SECTION 3.02. Offices for Notices and Payments, etc.
-------------------------------------
So long as any of the Debt Securities remain outstanding,
the Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency where the Debt Securities of each series may
be presented for payment, an office or agency where the Debt
Securities of that series may be presented for registration of
transfer and for exchange as in this Indenture provided and an office
or agency where notices and demands to or upon the Company in respect
of the Debt Securities of that series or of this Indenture may be
served. The Company will give to the Trustee written notice of the
location of any
<PAGE>
such office or agency and of any change of location thereof. Until
otherwise designated from time to time by the Company in a notice to
the Trustee, or specified as contemplated by Section 2.03, such office
or agency for all of the above purposes shall be the office or agency
of the Trustee. In case the Company shall fail to maintain any such
office or agency in the Borough of Manhattan, The City of New York, or
shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notices
may be served at the principal corporate trust office of the Trustee.
In addition to any such office or agency, the Company may
from time to time designate one or more offices or agencies outside
the Borough of Manhattan, The City of New York, where the Debt
Securities may be presented for registration of transfer and for
exchange in the manner provided in this Indenture, and the Company may
from time to time rescind such designation, as the Company may deem
desirable or expedient; provided, however, that no such designation or
-------- -------
rescission shall in any manner relieve the Company of its obligation
to maintain any such office or agency in the Borough of Manhattan, The
City of New York, for the purposes above mentioned. The Company will
give to the Trustee prompt written notice of any such designation or
rescission thereof.
SECTION 3.03. Appointments to Fill Vacancies in Trustee's
-------------------------------------------
Office.
------
The Company, whenever necessary to avoid or fill a vacancy
in the office of Trustee, will appoint, in the manner provided in
Section 6.10, a Trustee, so that there shall at all times be a Trustee
hereunder.
SECTION 3.04. Provision as to Paying Agent.
----------------------------
(a) If the Company shall appoint a paying agent other than
the Trustee with respect to the Debt Securities of any series, it will
cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject
to the provision of this Section 3.04,
(1) that it will hold all sums held by it as such agent for
the payment of the principal of and premium, if any, or interest, if
any, on the Debt Securities of such series (whether such sums have
been paid to it by the Company or by any other obligor on the Debt
Securities of such series) in trust for the benefit of the holders of
the Debt Securities of such series;
<PAGE>
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on the Debt Securities of such
series) to make any payment of the principal of and premium, if any,
or interest, if any, on the Debt Securities of such series when the
same shall be due and payable; and
(3) that it will, at any time during the continuance of any
Event of Default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such paying agent.
(b) If the Company shall act as its own paying agent, it
will, on or before each due date of the principal of and premium, if
any, or interest, if any, on the Debt Securities of any series, set
aside, segregate and hold in trust for the benefit of the holders of
the Debt Securities of such series a sum sufficient to pay such
principal, premium or interest so becoming due and will notify the
Trustee in writing of any failure to take such action and of any
failure by the Company (or by any other obligor under the Debt
Securities of such series) to make any payment of the principal of and
premium, if any, or interest, if any, on the Debt Securities of such
series when the same shall become due and payable.
Whenever the Company shall have one or more paying agents
for any series of Debt Securities, it will, on or prior to each due
date of the principal of and premium, if any, or interest, if any, on
any Debt Securities of such series, deposit with a paying agent a sum
sufficient to pay the principal, premium or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled
thereto and (unless such paying agent is the Trustee) the Company
shall promptly notify the Trustee in writing of its action or failure
to act.
(c) Anything in this Section 3.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge with respect to one or more or
all series of Debt Securities hereunder, or for any other reason, pay,
or direct any paying agent to pay to the Trustee all sums held in
trust for any such series by the Company or any such paying agent,
such sums to be held by the Trustee upon the trusts herein contained.
(d) Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in
this Section 3.04 is subject to Sections 11.03 and 11.04.
<PAGE>
SECTION 3.05. Certificate to Trustee.
----------------------
The Company will deliver to the Trustee on or before 120
days after the end of each fiscal year in each year, so long as Debt
Securities of any series are outstanding hereunder, a Certificate
stating that in the course of the performance by the signers of their
duties as officers of the Company they would normally have knowledge
of any default by the Company in the performance of any covenants
contained herein, stating whether or not they have knowledge of any
such default and, if so, specifying each such default of which the
signers have knowledge and the nature thereof.
SECTION 3.06. [Reserved].
SECTION 3.07. Limitation on Dividends.
-----------------------
If Debt Securities of a series are initially issued to a
Leucadia Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such Leucadia Trust (regardless of
whether Debt Securities continue to be held by such trust) and
(i) there shall have occurred and be continuing any event that would
constitute an Event of Default, (ii) the Company shall be in default
with respect to its payment of any obligations under a Capital
Securities Guarantee or a Common Securities Guarantee with respect to
securities issued by such trust, or (iii) the Company shall have given
notice of its election to defer payments of interest on the Debt
Securities of such series by extending the interest payment period as
provided herein and such period, or any extension thereof, shall be
continuing, then (a) the Company shall not declare or pay any dividend
on, make a distribution with respect to, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of its capital
stock or rights to acquire such capital stock (other than
(i) purchases or acquisitions of shares of any such capital stock or
rights to acquire such capital stock in connection with the
satisfaction by the Company of its obligations under any employee
benefit plans or any other contractual obligations of the Company
(other than a contractual obligation ranking pari passu with or junior
to the Debt Securities of such series), (ii) as a result of a
reclassification of the Company's capital stock or rights to acquire
such capital stock or the exchange or conversion of one class or
series of the Company's capital stock or rights to acquire such
capital stock for another class or series of the Company's capital
stock or rights to acquire such capital stock, (iii) the purchase of
fractional interests in shares of the
<PAGE>
Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or
exchanged, (iv) dividends and distributions made on the Company's
capital stock or rights to acquire such capital stock with the
Company's capital stock or rights to acquire such capital stock, or
(v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto), or make guarantee payments with
respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or
junior to the Debt Securities of such series (other than payments
under a Capital Securities Guarantee or a Common Securities
Guarantee), and (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company that rank pari passu
with or junior to the Debt Securities of such series.
SECTION 3.08. Covenants as to Leucadia Trusts.
-------------------------------
In the event Debt Securities of a series are initially
issued to a Leucadia Trust or a trustee of such trust in connection
with the issuance of Trust Securities by such Leucadia Trust, for so
long as such Trust Securities remain outstanding, the Company shall
maintain 100% ownership of the Common Securities of such Leucadia
Trust; provided, however, that any permitted successor of the Company
-------- -------
under this Indenture may succeed to the Company's ownership of such
Common Securities. The Company as owner of the Common Securities,
shall use its reasonable efforts to cause such Leucadia Trust (a) to
remain a statutory business trust, except in connection with a
distribution of Debt Securities of such series to the holders of such
Trust Securities in liquidation of such Trust, the redemption of all
of the Trust Securities of such Leucadia Trust or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration
of such Leucadia Trust, (b) to otherwise continue to be classified as
a grantor trust for United States federal income tax purposes and
(c) to use its reasonable efforts to cause each holder of Trust
Securities issued by such Leucadia Trust to be treated as owning an
undivided beneficial interest in the Debt Securities of such series
issued to such Leucadia Trust.
SECTION 3.09. Calculation of Original Issue Discount.
--------------------------------------
The Company shall file with the Trustee promptly at the end
of each calendar year a written notice specifying the amount
<PAGE>
of original issue discount (including daily rates and accrual
periods), if any, accrued on outstanding Debt Securities as of the end
of such year.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.
----------------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the
names and addresses of Securityholders for each series of Debt
Securities and shall otherwise comply with Section 312(a) of the Trust
Indenture Act. If the Trustee is not acting as the Debt Securities
registrar, the Company shall furnish or cause to be furnished to the
Trustee at least 10 days prior to each semiannual interest payment
date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders for each series
of Debt Securities, and the Company shall otherwise comply with
Section 312(a) of the Trust Indenture Act. The Trustee may destroy
any list furnished to it as provided in this Section 4.01 upon receipt
of a new list so furnished.
SECTION 4.02. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to Section 312(b)
of the Trust Indenture Act with other Securityholders with respect to
their rights under this Indenture or the Debt Securities of any
series. The Company, the Trustee, the Debt Securities registrar and
any paying agent shall have the protection of Section 312(c) of the
Trust Indenture Act.
SECTION 4.03. [Reserved].
SECTION 4.04. Reports by the Trustee.
----------------------
(a) The Trustee shall transmit to Securityholders such
reports concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant thereto. If
<PAGE>
required by Section 313(a) of the Trust Indenture Act, the Trustee
shall, within 60 days after each May 15 following the date of this
Indenture deliver to Securityholders a brief report, dated as of such
May 15, which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each
stock exchange, if any, upon which the Securities are listed, with the
Commission, if required by applicable law, and with the Company. The
Company will promptly notify the Trustee when the Debt Securities are
listed on any stock exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
SECTION 5.01. Events of Default.
-----------------
The following Events of Default with respect to Debt
Securities of any series or such other events as may be established
with respect to the Debt Securities of that series as contemplated by
Section 2.03 hereof shall be "Events of Default" with respect to Debt
Securities of that series:
(a) the Company defaults in the payment of any interest
upon any Debt Securities of that series when it becomes due and
payable, and continuance of such default for a period of 30 days;
provided, however, that a valid extension of an interest payment
-------- -------
period by the Company in accordance with the terms of such Debt
Securities shall not constitute a default in the payment of interest
for this purpose; or
(b) the Company defaults in the payment of all or any part
of the principal of (or premium, if any, on) any Debt Securities of
that series as and when the same shall become due and payable either
at maturity, upon redemption (including redemption for any sinking
fund), by declaration of acceleration or otherwise; or
(c) the Company defaults with respect to indebtedness for
money borrowed resulting in acceleration of such indebtedness having
an aggregate principal amount in excess of $25 million and such
acceleration is not rescinded or annulled within 30 days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the holders of at least
25% in aggregate principal amount of the
<PAGE>
outstanding Debt Securities of that series, a written notice
specifying such acceleration and stating that such Notice is a "Notice
of Default" hereunder; or
(d) the Company defaults in the performance of, or
breaches, any of its covenants or agreements in this Indenture or in
the terms of that series of Debt Securities established as
contemplated in this Indenture (other than a covenant or agreement a
default in whose performance or whose breach is elsewhere in this
Section specifically dealt with), and continuance of such default or
breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the outstanding Debt Securities of that series, a
written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) a court having jurisdiction in the premises shall enter
a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any substantial part of its property,
or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(f) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official)
of the Company or of any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due; or
(g) as to Debt Securities of any series issued to a
Leucadia Trust, such Leucadia Trust shall have voluntarily or
involuntarily liquidated, dissolved, wound-up its business or
otherwise terminated its existence except in connection with (i) the
distribution of the Debt Securities of such series to holders of such
Trust Securities in liquidation of their interests in such Leucadia
Trust, (ii) the redemption of all of the outstanding Trust Securities
of such Leucadia Trust or
<PAGE>
(iii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such Leucadia Trust.
If an Event of Default occurs and is continuing with respect
to any series of Debt Securities, then, and in each and every such
case, unless the principal of all of the Debt Securities of that
series shall have already become due and payable, either the Trustee
or the holders of not less than 25% in aggregate principal amount of
the Debt Securities of that series then outstanding hereunder, by
notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the Debt
Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of
that series) of all Debt Securities of that series and the interest
accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and
payable.
The foregoing provisions, however, are subject to the
condition that if, at any time after the principal (or, if the Debt
Securities are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms thereof) of the Debt
Securities of any series (or of all the Debt Securities, as the case
may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or
shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debt Securities of such series
(or of all the Debt Securities, as the case may be) and the principal
of and premium, if any, on any and all Debt Securities of such series
(or of all the Debt Securities, as the case may be) which shall have
become due otherwise than by acceleration (with interest upon such
principal and premium, if any, and, to the extent that payment of such
interest is enforceable under applicable law, on overdue installments
of interest, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified
in the Debt Securities of such series (or at the respective rates of
interest or Yields to Maturity of all the Debt Securities, as the case
may be) to the date of such payment or deposit) and such amount as
shall be sufficient to cover reasonable compensation to the Trustee
and each predecessor Trustee, their respective agents, attorneys and
counsel, and all other amounts due to the Trustee pursuant to
Section 6.06, and if any and all Events of Default under this
Indenture, other than the non-payment of the principal of or premium,
if any, on Debt Securities which shall have become due
<PAGE>
by acceleration, shall have been cured, waived or otherwise remedied
as provided herein -- then and in every such case the holders of a
majority in aggregate principal amount of the Debt Securities of such
series (or of all the Debt Securities, as the case may be) then
outstanding, by written notice to the Company and to the Trustee, may
waive all defaults with respect to that series (or with respect to all
Debt Securities, as the case may be, in such case, treated as a single
class) and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right
consequent thereon.
In case the Trustee shall have proceeded to enforce any
right under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or
for any other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company, the Trustee and the
holders of the Debt Securities shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and
powers of the Company, the Trustee and the holders of the Debt
Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Debt Securities on Default; Suit
-------------------------------------------
Therefor.
--------
The Company covenants that (a) in case default shall be made
in the payment of any installment of interest upon any of the Debt
Securities of any series as and when the same shall become due and
payable, and such default shall have continued for a period of 30
days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Debt Securities of any
series as and when the same shall have become due and payable, whether
at maturity of the Debt Securities of that series or upon redemption
or by declaration of acceleration or otherwise -- then, upon demand of
the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Debt Securities of that series the whole amount
that then shall have become due and payable on all such Debt
Securities of that series for principal and premium, if any, or
interest, or both, as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such
interest is enforceable under applicable law) upon the overdue
installments of interest at the rate or Yield to Maturity (in the case
of Original Issue Discount Securities) borne by the Debt Securities of
that series; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a
reasonable
<PAGE>
compensation to the Trustee, its agents, attorneys and counsel, and
any other amounts due to the Trustee under Section 6.06. In case the
Company shall fail forthwith to pay such amounts upon such demand, the
Trustee, in its own name and as trustee of an express trust, shall be
entitled and empowered to institute any actions or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree,
and may enforce any such judgment or final decree against the Company
or any other obligor on such Debt Securities and collect in the manner
provided by law out of the property of the Company or any other
obligor on such Debt Securities wherever situated the moneys adjudged
or decreed to be payable.
In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other
obligor on the Debt Securities of any series under Title 11, United
States Code, or any other applicable law, or in case a receiver or
trustee shall have been appointed for the property of the Company or
such other obligor, or in the case of any other similar judicial
proceedings relative to the Company or other obligor upon the Debt
Securities of any series, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of whether
the principal of the Debt Securities of any series shall then be due
and payable as therein expressed or by declaration of acceleration or
otherwise and irrespective of whether the Trustee shall have made any
demand pursuant to the provisions of this Section 5.02, shall be
entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Debt Securities of that series are
Original Issue Discount Securities such portion of the principal
amount as may be specified in the terms of that series) owing and
unpaid in respect of the Debt Securities of such series and, in case
of any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for reasonable
compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
other amounts due to the Trustee under Section 6.06 and of the
Securityholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Debt Securities of any series, or
to the creditors or property of the Company or such other obligor,
unless prohibited by applicable law and regulations, to vote on behalf
of the holders of the Debt Securities or any series in any election of
a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency
<PAGE>
proceedings or Person performing similar functions in comparable
proceedings, and to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute the same
after the deduction of its charges and expenses; and any receiver,
assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Securityholders to make such payments to the
Trustee, and, in the event that the Trustee shall consent to the
making of such payments directly to the Securityholders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other amounts due to
the Trustee under Section 6.06.
Nothing herein contained shall be construed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debt Securities of any series or the rights
of any holder thereof or to authorize the Trustee to vote in respect
of the claim of any Securityholder in any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Debt Securities, may be enforced by the
Trustee without the possession of any of the Debt Securities, or the
production thereof at any trial or other proceeding relative thereto,
and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the holders
of the Debt Securities.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party) the Trustee shall be
held to represent all the holders of the Debt Securities, and it shall
not be necessary to make any holders of the Debt Securities parties to
any such proceedings.
SECTION 5.03. Application of Moneys Collected by Trustee.
------------------------------------------
Any moneys collected by the Trustee shall be applied in the
following order, at the date or dates fixed by the Trustee for the
distribution of such moneys, upon presentation of the several Debt
Securities in respect of which moneys have been collected, and
stamping thereon the payment, if only partially paid, and upon
surrender thereof if fully paid:
<PAGE>
First: To the payment of costs and expenses of collection
applicable to such series and reasonable compensation to the Trustee,
its agents, attorneys and counsel, and of all other amounts due to the
Trustee under Section 6.06;
Second: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid
upon Debt Securities of such series for principal (and premium, if
any), and interest on the Debt Securities of such series, in respect
of which or for the benefit of which money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due on such Debt Securities for principal (and premium, if
any) and interest, respectively; and
Fourth: The balance, if any, to the Company.
SECTION 5.04. Proceedings by Securityholders.
------------------------------
No holder of any Debt Security of any series shall have any
right to institute any suit, action or proceeding for any remedy
hereunder, unless such holder previously shall have given to the
Trustee written notice of a continuing Event of Default with respect
to the Debt Securities of such series specifying such Event of
Default, as hereinbefore provided, and unless the holders of not less
than 25% in aggregate principal amount of the Debt Securities of that
series then outstanding shall have given the Trustee a written request
to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding; provided
--------
that, no holder of Debt Securities of any series shall have any right
----
to prejudice the rights of any other holder of Debt Securities of such
series, obtain priority or preference over any other such holder or
enforce any right under this Indenture except as provided herein and
for the equal, ratable and common benefit of all holders of Debt
Securities of the applicable series.
Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Debt Security to receive
payment of the principal of, premium, if any, and interest on, such
Debt Security when due, or to institute suit for the enforcement of
any such payment, shall not be impaired or affected without the
consent of such holder. For the protection
<PAGE>
and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
SECTION 5.05. Proceedings by Trustee.
----------------------
In case of an Event of Default hereunder the Trustee may in
its discretion proceed to protect and enforce the rights vested in it
by this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding
in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture
or by law.
SECTION 5.06. Remedies Cumulative and Continuing.
----------------------------------
Except as otherwise provided in Section 2.08, all powers and
remedies given by this Article V to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies
available to the Trustee or the holders of the Debt Securities, by
judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture
or otherwise established with respect to such series, and no delay or
omission of the Trustee or of any holder of any of the Debt Securities
to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.04,
every power and remedy given by this Article V or by law to the
Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 5.07. Direction of Proceedings and Waiver of
--------------------------------------
Defaults by Majority of Securityholders.
---------------------------------------
The holders of a majority in aggregate principal amount of
the Debt Securities of any or all series affected (voting as one
class) at the time outstanding shall have the right to direct the
time, method, and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to such series; provided,
--------
<PAGE>
however, that (subject to the provisions of Section 6.01) the Trustee
-------
shall have the right to decline to follow any such direction if the
Trustee shall determine that the action so directed would be unjustly
prejudicial to the holders not taking part in such direction or if the
Trustee being advised by counsel determines that the action or
proceeding so directed may not lawfully be taken or if the Trustee in
good faith by its board of directors or trustees, executive committee,
or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so directed
would involve the Trustee in personal liability. Prior to any
declaration accelerating the maturity of any series of the Debt
Securities, or of all the Debt Securities, as the case may be, the
holders of a majority in aggregate principal amount of the Debt
Securities of that series at the time outstanding may on behalf of the
holders of all of the Debt Securities of such series waive (or modify
any previously granted waiver of) any past default or Event of
Default, including any default or Event of Default the conditions for
the occurrence of which are established pursuant to Section 2.03, and
its consequences, except a default (a) in the payment of principal of,
premium, if any, or interest on any of the Debt Securities, (b) in
respect of covenants or provisions hereof which cannot be modified or
amended without the consent of the holder of each Debt Security
affected, or (c) default of the covenants contained in Section 3.08;
provided, however, that if the Debt Securities of such series are held
-------- -------
by a Leucadia Trust or a trustee of such trust, such waiver or
modification to such waiver shall not be effective until the holders
of a majority in liquidation preference of Trust Securities of the
applicable Leucadia Trust shall have consented to such waiver or
modification to such waiver; provided, further, that if the consent of
the holder of each outstanding Debt Security is required, such waiver
shall not be effective until each holder of the Trust Securities of
the applicable Leucadia Trust shall have consented to such waiver.
Upon any such waiver, the default covered thereby shall be deemed to
be cured for all purposes of this Indenture and the Company, the
Trustee and the holders of the Debt Securities of such series shall be
restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever any
default or Event of Default hereunder shall have been waived as
permitted by this Section 5.07, said default or Event of Default shall
for all purposes of the Debt Securities of that series (or of all
Securities, as the case may be) and this Indenture be deemed to have
been cured and to be not continuing.
<PAGE>
SECTION 5.08. Notice of Defaults.
------------------
The Trustee shall, within 90 days after the occurrence of a
default with respect to the Debt Securities of any series, mail to all
Securityholders of that series, as the names and addresses of such
holders appear upon the Debt Security Register, notice of all defaults
with respect to that series known to the Trustee, unless such defaults
shall have been cured before the giving of such notice (the term
"defaults" for the purpose of this Section 5.08 being hereby defined
to be the events specified in clauses (a), (b), (c), (d), (e) and (f)
of Section 5.01, not including periods of grace, if any, provided for
therein, and irrespective of the giving of written notice specified in
clause (c) of Section 5.01); and provided that, except in the case of
default in the payment of the principal of, premium, if any, or
interest on any of the Debt Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of
the Securityholders of such series; and provided further, that in the
case of any default of the character specified in Section 5.01(c) no
such notice to Securityholders of such series shall be given until at
least 60 days after the occurrence thereof but shall be given within
90 days after such occurrence.
SECTION 5.09. Undertaking to Pay Costs.
------------------------
All parties to this Indenture agree, and each holder of any
Debt Security by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this
Section 5.09 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Securityholder, or group of Securityholders
of any series, holding in the aggregate more than 10% in principal
amount of the Debt Securities of that series outstanding, or to any
suit instituted by any Securityholder for the enforcement of the
payment of the principal of (or premium, if any) or interest on
<PAGE>
any Debt Security against the Company on or after the same shall have
become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.
--------------------------------------
With respect to the holders of any series of Debt Securities
issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to Debt Securities of that series and after the
curing or waiving of all Events of Default which may have occurred,
with respect to Debt Securities of that series, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default with respect to the Debt
Securities of a series has occurred (which has not been cured or
waived) the 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 man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default with
respect to Debt Securities of a series and after the curing or waiving
of all Events of Default with respect to that series which may have
occurred
(1) the duties and obligations of the Trustee with
respect to Debt Securities of such series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such
duties and obligations with respect to such series as are
specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee, and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but, in the case of any such certificates
<PAGE>
or opinions furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith, in accordance
with the direction of the Securityholders pursuant to Section 5.07,
relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall
require the 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 there is
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably
assured to it.
SECTION 6.02. Reliance on Documents, Opinions, etc.
------------------------------------
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
note, debenture 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, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any Board Resolution may be evidenced to
the Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection
and any advice or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action
<PAGE>
taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders, pursuant to
the provisions of this Indenture, unless such Securityholders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default
with respect to a series of the Debt Securities (that has not been
cured or waived) to exercise with respect to Debt Securities of that
series such of the rights and powers vested in it by this Indenture,
and to use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, coupon or other paper or
document, unless requested in writing to do so by the holders of not
less than a majority in principal amount of the outstanding Debt
Securities of the series affected thereby; provided, however, that if
-------- -------
the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against
such expense or liability as a condition to so proceeding;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents (including any Authenticating Agent) or attorneys, and
the Trustee shall not be responsible for any misconduct or negligence
on the part of any such agent or attorney appointed by it with due
care; and
(h) the Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Debt
<PAGE>
Securities of any series unless either (1) a Responsible Officer shall
have actual knowledge of such Default or Event of Default or (2)
written notice of such Default or Event of Default shall have been
given to the Trustee by the Company or any other obligor on the Debt
Securities of such series or by any holder of the Debt Securities of
such series.
SECTION 6.03. No Responsibility for Recitals, etc.
-----------------------------------
The recitals contained herein and in the Debt Securities
(except in the certificate of authentication of the Trustee or the
Authenticating Agent) shall be taken as the statements of the Company
and the Trustee and the Authenticating Agent assume no responsibility
for the correctness of the same. The Trustee and the Authenticating
Agent make no representations as to the validity or sufficiency of
this Indenture or of the Debt Securities. The Trustee and the
Authenticating Agent shall not be accountable for the use or
application by the Company of any Debt Securities or the proceeds of
any Debt Securities authenticated and delivered by the Trustee or the
Authenticating Agent in conformity with the provisions of this
Indenture.
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents,
---------------------------------------------
Transfer Agents or Registrar May Own Debt Securities.
----------------------------------------------------
The Trustee or any Authenticating Agent or any paying agent
or any transfer agent or any Debt Security registrar, in its
individual or any other capacity, may become the owner or pledgee of
Debt Securities with the same rights it would have if it were not
Trustee, Authenticating Agent, paying agent, transfer agent or Debt
Security registrar.
SECTION 6.05. Moneys to be Held in Trust.
--------------------------
Subject to the provisions of Section 11.04, all moneys
received by the Trustee or any paying agent shall, until used or
applied as herein provided, be held in trust for the purpose for which
they were received, but need not be segregated from other funds except
to the extent required by law. The Trustee and any paying agent shall
be under no liability for interest on any money received by it
hereunder except as otherwise agreed in writing with the Company . So
long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such moneys shall be paid from time to time
upon the written order of the Company, signed by an Officer of the
Company.
<PAGE>
SECTION 6.06. Compensation and Expenses of Trustee.
------------------------------------
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to reasonable
compensation for all services rendered by it hereunder (which shall
not be limited by any provision of law in regard to the compensation
of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
counsel and of all Persons not regularly in its employ) except any
such expense, disbursement or advance as may arise from its negligence
or bad faith. The Company also covenants to indemnify each of the
Trustee or any predecessor Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any and
all loss, damage, claim, liability or expense including taxes (other
than taxes based on the income of the Trustee) incurred without
negligence or bad faith on the part of the Trustee and arising out of
or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim
of liability in connection with the acceptance and administration of
the trusts and its duties hereunder as Trustee. The Trustee shall
notify the Company promptly of any claim for which it may seek
indemnification; however, unless the position of the Company is
prejudiced by such failure, the failure of the Trustee promptly to
notify the Company shall not limit its right to indemnification. The
Company shall defend each such claim and the Trustee shall cooperate
in the defense. The Trustee may retain one special counsel and the
Company shall reimburse the Trustee for the reasonable fees and
expenses of such counsel. The Company need not pay for any settlement
without its consent. The obligations of the Company under this
Section 6.06 to compensate and indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness hereunder. Such additional
indebtedness shall be secured by a lien prior to that of the Debt
Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the
holders of particular Debt Securities.
Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses or
renders services in connection with an Event of Default specified in
Section 5.01(d), Section 5.01(e) or Section 5.01(f), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to
<PAGE>
constitute expenses of administration under any applicable federal or
state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the resignation
or removal of the Trustee and the defeasance or other termination of
this Indenture.
SECTION 6.07. Officers' Certificate as Evidence.
---------------------------------
Except as otherwise provided in Sections 6.01 and 6.02,
whenever in the administration of the provisions of this Indenture the
Trustee shall deem it necessary or desirable that a matter be proved
or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad
faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee,
and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any
action taken or omitted by it under the provisions of this Indenture
upon the faith thereof.
SECTION 6.08. Conflicting Interest of Trustee.
-------------------------------
If the Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture
Act, the Trustee and the Company shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act, subject to
the penultimate paragraph of such section.
SECTION 6.09. Eligibility of Trustee.
----------------------
The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of
America or any state or territory thereof or of the District of
Columbia or a corporation or other Person permitted to act as trustee
by the Securities and Exchange Commission authorized under such laws
to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000) and subject
to supervision or examination by federal, state, territorial, or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the
purposes of this Section 6.09 the combined capital and surplus of such
corporation shall be deemed to be its
<PAGE>
combined capital and surplus as set forth in its most recent records
of condition so published.
The Company may not, nor may any Person directly or
indirectly controlling, controlled by, or under common control with
the Company, serve as Trustee.
In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section 6.09, the Trustee
shall resign immediately in the manner and with the effect specified
in Section 6.10.
SECTION 6.10. Resignation or Removal of Trustee.
---------------------------------
(a) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign with respect to one or more or all
series of Debt Securities by giving written notice of such resignation
to the Company and by mailing notice thereof to the holders of the
applicable series of Debt Securities at their addresses as they shall
appear on the Debt Security Register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee or
trustees with respect to the applicable series by written instrument,
in duplicate, executed by order of its Board of Directors, one copy of
which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have
been so appointed with respect to any series of Debt Securities and
have accepted appointment within 60 days after the mailing of such
notice of resignation to the affected Securityholders, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee, or any Securityholder who has been
a bona fide holder of a Debt Security or Debt Securities of the
applicable series for at least six months may, subject to the
provisions of Section 5.09, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a
successor Trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a successor Trustee.
(b) In case at any time any of the following shall occur --
(1) the Trustee shall fail to comply with the
provisions of Section 6.08 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder
of a Debt Security or Debt Securities for at least six months, or
<PAGE>
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.09 and shall fail to
resign after written request therefor by the Company or by any
such Securityholder, or
(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, the Company
may remove the Trustee and appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor
Trustee, or, subject to the provisions of Section 5.09, any
Securityholder who has been a bona fide holder of a Debt Security
or Debt Securities of the applicable series for at least six
months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint
successor Trustee.
(c) Upon prior written notice to the Company and the
Trustee, the holders of a majority in aggregate principal amount of
the Debt Securities of any series at the time outstanding may at any
time remove the Trustee with respect to such series and nominate a
successor Trustee with respect to the applicable series of Debt
Securities, which shall be deemed appointed as successor Trustee with
respect to the applicable series unless within ten Business Days after
such nomination the Company objects thereto, in which case the Trustee
so removed or any Securityholder of the applicable series, upon the
terms and conditions and otherwise as in subsection (a) of this
Section 6.10 provided, may petition any court of competent
jurisdiction for an appointment of a successor Trustee with respect to
such series.
(d) Any resignation or removal of the Trustee and
appointment of a successor Trustee pursuant to any of the provisions
of this Section 6.10 shall become effective upon acceptance of
appointment by the successor Trustee as provided in Section 6.11.
<PAGE>
SECTION 6.11. Acceptance by Successor Trustee.
-------------------------------
Any successor Trustee appointed as provided in Section 6.10
shall execute, acknowledge and deliver to the Company and to its
predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the retiring
Trustee with respect to all or any applicable series shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties
and obligations with respect to such series of its predecessor
hereunder, with like effect as if originally named as Trustee herein;
but, nevertheless, on the written request of the Company or of the
successor Trustee, the Trustee ceasing to act shall, upon payment of
any amounts then due it pursuant to the provisions of Section 6.06,
execute and deliver an instrument transferring to such successor
Trustee all the rights and powers of the Trustee so ceasing to act and
shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee thereunder. Upon
request of any such successor Trustee, the Company shall execute any
and all instruments in writing for more fully and certainly vesting in
and confirming to such successor Trustee all such rights and powers.
Any Trustee ceasing to act shall, nevertheless, retain a lien upon all
property or funds held or collected by such Trustee to secure any
amounts then due it pursuant to the provisions of Section 6.06.
If a successor Trustee is appointed with respect to the Debt
Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Debt
Securities of any applicable series shall execute and deliver an
indenture supplemental hereto which shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of any series as to which the predecessor Trustee is
not retiring shall continue to be vested in the predecessor Trustee,
and shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of
the Trust hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust and that each such Trustee
shall be Trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such
Trustee.
No successor Trustee shall accept appointment as provided in
this Section 6.11 unless at the time of such
<PAGE>
acceptance such successor Trustee shall be qualified under the
provisions of Section 6.08 and eligible under the provisions of
Section 6.09.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 6.11, the Company shall mail notice of the
succession of such Trustee hereunder to the holders of Debt Securities
of any applicable series at their addresses as they shall appear on
the Debt Security Register. If the Company fails to mail such notice
within ten Business Days after the acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be
mailed at the expense of the Company.
SECTION 6.12. Succession by Merger, etc.
-------------------------
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder without the execution
or filing of any paper or any further act on the part of any of the
parties hereto; provided such corporation shall otherwise be eligible
and qualified under this Article.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Debt
Securities of any series shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor Trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt
Securities of any series shall not have been authenticated, any
successor to the Trustee may authenticate such Debt Securities either
in the name of any predecessor hereunder or in the name of the
successor Trustee; and in all such cases such certificates shall have
the full force which it is anywhere in the Debt Securities of such
series or in this Indenture provided that the certificate of the
Trustee shall have; provided, however, that the right to adopt the
-------- -------
certificate of authentication of any predecessor Trustee or
authenticate Debt Securities of any series in the name of any
predecessor Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
<PAGE>
SECTION 6.13. Limitation on Rights of Trustee as a
------------------------------------
Creditor.
--------
The Trustee shall comply with Section 311(a) of the Trust
Indenture Act, excluding any creditor relationship described in
Section 311(b) of the Trust Indenture Act. A Trustee who has resigned
or been removed shall be subject to Section 311(a) of the Trust
Indenture Act to the extent included therein.
SECTION 6.14. Authenticating Agents.
---------------------
There may be one or more Authenticating Agents appointed by
the Trustee upon the request of the Company with power to act on its
behalf and subject to its direction in the authentication and delivery
of Debt Securities of any series issued upon exchange or registration
of transfer thereof as fully to all intents and purposes as though any
such Authenticating Agent had been expressly authorized to
authenticate and deliver Debt Securities of such series; provided that
the Trustee shall have no liability to the Company for any acts or
omissions of the Authenticating Agent with respect to the
authentication and delivery of Debt Securities of any series. Any
such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of
any state or territory thereof or of the District of Columbia
authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $5,000,000 and being subject
to supervision or examination by federal, state, territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually pursuant to law or the requirements of
such authority, then for the purposes of this Section 6.14 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 an Authenticating
Agent shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the
effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to
which any Authenticating Agent shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business
of any Authenticating Agent, shall be the successor of such
Authenticating Agent hereunder, if such
<PAGE>
successor corporation is otherwise eligible under this Section 6.14
without the execution or filing of any paper or any further act on the
part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign with respect
to one or more or all series of Debt Securities by giving written
notice of resignation to the Trustee and to the Company. The Trustee
may at any time terminate the agency of any Authenticating Agent with
respect to one or more or all series of Debt Securities by giving
written notice of termination 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 any Authenticating Agent shall
cease to be eligible under this Section 6.14, the Trustee may, and
upon the request of the Company shall, promptly appoint a successor
Authenticating Agent with respect to the applicable series eligible
under this Section 6.14, shall give written notice of such appointment
to the Company and shall mail notice of such appointment to all
holders of the applicable series of Debt Securities as the names and
addresses of such holders appear on the Debt Security Register. Any
successor Authenticating Agent with respect to all or any series upon
acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities with respect to such
series of its predecessor hereunder, with like effect as if originally
named as Authenticating Agent herein.
The Company agrees to pay to any Authenticating Agent from
time to time reasonable compensation for its services. Any
Authenticating Agent shall have no responsibility or liability for any
action taken by it as such in accordance with the directions of the
Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.
-------------------------
Whenever in this Indenture it is provided that the holders
of a specified percentage in aggregate principal amount of the Debt
Securities of any or all series may take any action (including the
making of any demand or request, the giving of any notice, consent or
waiver or the taking of any other action) the fact that at the time of
taking any such action the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar
<PAGE>
tenor executed by such Securityholders in person or by agent or proxy
appointed in writing, or (b) by the record of such holders of Debt
Securities voting in favor thereof at any meeting of such
Securityholders duly called and held in accordance with the provisions
of Article Eight, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of such
Securityholders or (d) by any other method the Trustee deems
satisfactory.
If the Company shall solicit from the Securityholders of any
series any request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same, the Company may, at
its option, as evidenced by an Officers' Certificate, fix in advance a
record date for such series for the determination of Securityholders
entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action or revocation of the same, but
the Company shall have no obligation to do so. If such a record date
is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other action or revocation of the same may be given
before or after the record date, but only the Securityholders of
record at the close of business on the record date shall be deemed to
be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of outstanding Debt
Securities of that series have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same, and for that purpose
the outstanding Debt Securities of that series shall be computed as of
the record date; provided, however, that no such authorization,
-------- -------
agreement or consent by such Securityholders on the record date shall
be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the
record date.
SECTION 7.02. Proof of Execution by Securityholders.
-------------------------------------
Subject to the provisions of Section 6.01, 6.02 and 8.05,
proof of the execution of any instrument by a Securityholder or his
agent or proxy shall be sufficient if made in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee
or in such manner as shall be satisfactory to the Trustee. The
ownership of Debt Securities shall be proved by the Debt Security
Register or by a certificate of the Debt Security registrar. The
Trustee may require such additional proof of any matter referred to in
this Section as it shall reasonably deem necessary.
<PAGE>
The record of any Securityholders' meeting shall be proved
in the manner provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
------------------------------
Prior to due presentment for registration of transfer of any
Debt Security, the Company, the Trustee, any Authenticating Agent, any
paying agent, any transfer agent and any Debt Security registrar may
deem the Person in whose name such Debt Security shall be registered
upon the Debt Security Register to be, and may treat him as, the
absolute owner of such Debt Security (whether or not such Debt
Security shall be overdue) for the purpose of receiving payment of or
on account of the principal of, premium, if any, and (subject to
Section 2.05) interest on such Debt Security and for all other
purposes; and neither the Company nor the Trustee nor any
Authenticating Agent nor any paying agent nor any transfer agent nor
any Debt Security registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being
or upon his order shall be valid, and, to the extent of the sum or
sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Debt Security.
SECTION 7.04. Debt Securities Owned by Company Deemed Not
-------------------------------------------
Outstanding.
-----------
In determining whether the holders of the requisite
aggregate principal amount of Debt Securities have concurred in any
direction, consent or waiver under this Indenture, Debt Securities
which are owned by the Company or any other obligor on the Debt
Securities or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Company or any other obligor on the Debt Securities shall be
disregarded and deemed not to be outstanding for the purpose of any
such determination; provided that for the purposes of determining
whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debt Securities which the Trustee
actually knows are so owned shall be so disregarded. Debt Securities
so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 7.04 if the pledgee shall
establish to the reasonable satisfaction of the Trustee the pledgee's
right to vote such Debt Securities and that the pledgee is not the
Company or any such other obligor or Person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a
dispute as to such right, any decision by the Trustee taken
<PAGE>
upon the advice of counsel shall be full protection to the Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
--------------------------------------------
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.01, of the taking of any action by
the holders of the percentage in aggregate principal amount of the
Debt Securities specified in this Indenture in connection with such
action, any holder (in cases where no record date has been set
pursuant to Section 7.01) or any holder as of an applicable record
date (in cases where a record date has been set pursuant to Section
7.01) of a Debt Security (or any Debt Security issued in whole or in
part in exchange or substitution therefor) the serial number of which
is shown by the evidence to be included in the Debt Securities the
holders of which have consented to such action may, by filing written
notice with the Trustee at the Principal Office of the Trustee and
upon proof of holding as provided in Section 7.02, revoke such action
so far as concerns such Debt Security (or so far as concerns the
principal amount represented by any exchanged or substituted Debt
Security). Except as aforesaid any such action taken by the holder of
any Debt Security shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debt Security, and of any
Debt Security issued in exchange or substitution therefor or on
registration of transfer thereof, irrespective of whether or not any
notation in regard thereto is made upon such Debt Security or any Debt
Security issued in exchange or substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.
--------------------
A meeting of Securityholders of any or all series may be
called at any time and from time to time pursuant to the provisions of
this Article Eight for any of the following purposes:
(a) to give any notice to the Company or to the Trustee, or
to give any directions to the Trustee, or to consent to the waiving of
any default hereunder and its consequences, or to take any other
action authorized to be taken by Securityholders pursuant to any of
the provisions of Article V;
<PAGE>
(b) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VI;
(c) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
9.02; or
(d) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal amount
of such Debt Securities under any other provision of this Indenture or
under applicable law.
SECTION 8.02. Call of Meetings by Trustee.
---------------------------
The Trustee may at any time call a meeting of
Securityholders of any or all series to take any action specified in
Section 8.01, to be held at such time and at such place in the Borough
of Manhattan, The City of New York, as the Trustee shall determine.
Notice of every meeting of the Securityholders of any or all series,
setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed
to holders of Debt Securities of each series affected at their
addresses as they shall appear on the Debt Securities Register for
each series affected. Such notice shall be mailed not less than 20
nor more than 180 days prior to the date fixed for the meeting.
SECTION 8.03. Call of Meetings by Company or
------------------------------
Securityholders.
---------------
In case at any time the Company or the holders of at least
15% in aggregate principal amount of the Debt Securities of any or all
series, as the case may be, then outstanding, shall have requested the
Trustee to call a meeting of Securityholders of any or all series, as
the case may be, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall
not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Company or such Securityholders may
determine the time and the place in said Borough of Manhattan for such
meeting and may call such meeting to take any action authorized in
Section 8.01, by mailing notice thereof as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting.
-------------------------
To be entitled to vote at any meeting of Securityholders a
Person shall (a) be a holder of one or more
<PAGE>
Debt Securities with respect to which the meeting is being held or (b)
a Person appointed by an instrument in writing as proxy by a holder of
one or more such Debt Securities. The only Persons who shall be
entitled to be present or to speak at any meeting of Securityholders
shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 8.05. Regulations.
-----------
Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable
for any meeting of Securityholders, in regard to proof of the holding
of Debt Securities and of the appointment of proxies, and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right
to vote, and such other matters concerning the conduct of the meeting
as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Securityholders as provided in Section
8.03, in which case the Company or the Securityholders calling the
meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the
meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 7.04, at any meeting
each holder of Debt Securities with respect to which such meeting is
being held or proxy therefor shall be entitled to one vote for each
$1,000 principal amount (in the case of Original Issue Discount
Securities, such principal amount to be determined as provided in the
definition "outstanding") of Debt Securities held or represented by
him; provided, however, that no vote shall be cast or counted at any
-------- -------
meeting in respect of any Debt Security challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The
chairman of the meeting shall have no right to vote other than by
virtue of Debt Securities held by him or instruments in writing as
aforesaid duly designating him as the Person to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called
pursuant to the provisions of Section 8.02 or 8.03 may be adjourned
from time to time by a majority of those present, whether or not
constituting a quorum, and the meeting may be held as so adjourned
without further notice.
<PAGE>
SECTION 8.06. Voting.
------
The vote upon any resolution submitted to any meeting of
holders of Debt Securities with respect to which such meeting is being
held shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and
the serial number or numbers of the Debt Securities held or
represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Securityholders shall be prepared
by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was mailed as provided in Section
8.02. The record shall show the serial numbers of the Debt Securities
voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered
to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the
meeting.
Any record so signed and verified shall be conclusive
evidence of the matters therein stated.
SECTION 8.07. Quorum; Actions.
---------------
The Persons entitled to vote a majority in principal amount
of the Debt Securities of a series shall constitute a quorum for a
meeting of Securityholders of such series; provided, however, that if
-------- -------
any action is to be taken at such meeting with respect to a consent,
waiver, request, demand, notice, authorization, direction or other
action which may be given by the holders of not less than a specified
percentage in principal amount of the Debt Securities of a series, the
Persons holding or representing such specified percentage in principal
amount of the Debt Securities of such series will constitute a quorum.
In the absence of a quorum within 30 minutes of the time appointed for
any such meeting, the meeting shall, if convened at the request of
Securityholders of such series, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as
determined by the permanent chairman of the meeting prior to the
adjournment of such meeting. In the absence of a
<PAGE>
quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days as determined
by the permanent chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned
meeting shall be given as provided in Section 8.02, except that such
notice need be given only once not less than five days prior to the
date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Debt
Securities of such series which shall constitute a quorum.
Except as limited by the proviso in the first paragraph of
Section 9.02, any resolution presented to a meeting or adjourned
meeting duly reconvened at which a quorum is present as aforesaid may
be adopted by the affirmative vote of the Holders of a majority in
principal amount of the Debt Securities of that series; provided,
--------
however, that, except as limited by the proviso in the first
-------
paragraph of Section 9.02, any resolution with respect to any consent,
waiver, request, demand, notice, authorization, direction or other
action which this Indenture expressly provides may be given by the
holders of not less than a specified percentage in principal amount of
the Debt Securities of a series may be adopted at a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as
aforesaid only by the affirmative vote of the holders of a not less
than such specified percentage in principal amount of the Debt
Securities of that series.
Any resolution passed or decision taken at any meeting of
holders of Debt Securities of any series duly held in accordance with
this Section shall be binding on all the Securityholders of such
series, whether or not present or represented at the meeting.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of
------------------------------------------
Securityholders.
---------------
The Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect), without the
consent of the Securityholders, for one or more of the following
purposes:
<PAGE>
(a) to evidence the succession of another corporation to
the Company, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Company, pursuant to Article X hereof;
(b) to add to the covenants of the Company such further
covenants, restrictions or conditions for the protection of the
holders of all or any series of Debt Securities (and if such covenants
are to be for the benefit of less than all series of Debt Securities
stating that such covenants are expressly being included for the
benefit of such series) and to make the occurrence, or the occurrence
and continuance, of a default in any of such additional covenants,
restrictions or conditions a default or an Event of Default permitting
the enforcement of all or any of the several remedies provided in this
Indenture as herein set forth; provided, however, that in respect of
-------- -------
any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture; provided
that any such action shall not adversely affect the interests of the
holders of the Debt Securities of any series;
(d) to add to, delete from, or revise the terms of Debt
Securities of any series, including, without limitation, any terms
relating to the issuance, exchange, registration or transfer of Debt
Securities, including to provide for transfer procedures and
restrictions substantially similar to those applicable to the Capital
Securities relating to such series as required by Section 2.07 (for
purposes of assuring that no registration of Debt Securities of a
series subject to transfer restrictions is required under the
Securities Act of 1933, as amended); provided that any such action
shall not adversely affect the interests of the holders of the Debt
Securities of any series then outstanding (it being understood, for
purposes of this proviso, that transfer restrictions on Debt
Securities of a series substantially similar to those that were
applicable to Capital Securities of the related series shall not be
deemed to adversely affect the holders of the Debt Securities);
<PAGE>
(e) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Debt
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11;
(f) to make any change (other than as elsewhere provided in
this paragraph) that does not adversely affect the rights of any
Securityholder in any material respect; or
(g) to provide for the issuance of and establish the form
and terms and conditions of the Debt Securities of any series, to
establish the form of any certifications required to be furnished
pursuant to the terms of this Indenture or any series of Debt
Securities, or to add to the rights of the holders of any series of
Debt Securities.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained
and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any such supplemental indenture which affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of
this Section 9.01 may be executed by the Company and the Trustee
without the consent of the holders of any of the Debt Securities at
the time outstanding, notwithstanding any of the provisions of Section
9.02.
SECTION 9.02. Supplemental Indentures with Consent of
---------------------------------------
Securityholders.
---------------
With the consent (evidenced as provided in Section 7.01) of
the holders of not less than a majority in aggregate principal amount
of the Debt Securities at the time outstanding of all series affected
by such supplemental indenture (voting as a class), the Company, when
authorized by a Board Resolution, and the Trustee may from time to
time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act, then in effect, applicable to indentures
qualified thereunder) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental
<PAGE>
indenture or of modifying in any manner the rights of the holders of
the Debt Securities of each series so affected; provided, however,
-------- -------
that no such supplemental indenture shall without the consent of the
holders of each Debt Security then outstanding and affected thereby
(i) extend the fixed maturity of any Debt Security of any series, or
reduce the principal amount thereof or any premium thereon, or reduce
the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof or make the principal thereof
or any interest or premium thereon payable in any coin or currency
other than that provided in the Debt Securities, or reduce the amount
of the principal of an Original Issue Discount Security that would be
due and payable upon an acceleration of the maturity thereof pursuant
to Section 5.01 or the amount thereof provable in bankruptcy pursuant
to Section 5.02, or impair or affect the right of any Securityholder
to institute suit for payment thereof or impair the right of
repayment, if any, at the option of the holder, or (ii) reduce the
aforesaid percentage of Debt Securities the holders of which are
required to consent to any such supplemental indenture; provided,
--------
further, that if the Debt Securities of such series are held by a
-------
Leucadia Trust or a trustee of such trust, such supplemental indenture
shall not be effective until the holders of a majority in liquidation
preference of Trust Securities of the applicable Trust shall have
consented to such supplemental indenture; provided further, that if
the consent of the Securityholder of each outstanding Debt Security is
required, such supplemental indenture shall not be effective until
each holder of the Trust Securities of the applicable Leucadia Trust
shall have consented to such supplemental indenture.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Debt Securities, or which modifies the rights of Securityholders of
such series with respect to such covenant or provision, shall be
deemed not to affect the rights under this Indenture or the
Securityholders of any other series.
Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the
consent of Securityholders as aforesaid, the Trustee shall join with
the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion,
<PAGE>
but shall not be obligated to, enter into such supplemental indenture.
Promptly after the execution by the Company and the Trustee
of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, prepared by the Company, setting forth in general
terms the substance of such supplemental indenture, to the
Securityholders of all series affected thereby as their names and
addresses appear upon the Debt Security Register. Any failure of the
Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such
supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form
of any proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof.
SECTION 9.03. Compliance with Trust Indenture Act; Effect
-------------------------------------------
of Supplemental Indentures.
--------------------------
Any supplemental indenture executed pursuant to the
provisions of this Article IX shall comply with the Trust Indenture
Act, as then in effect to the extent applicable to indentures
qualified under the Trust Indenture Act. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article IX,
this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the
Trustee, the Company and the holders of Debt Securities of each series
affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.04. Notation on Debt Securities.
---------------------------
Debt Securities of any series authenticated and delivered
after the execution of any supplemental indenture affecting such
series pursuant to the provisions of this Article IX may bear a
notation in form approved by the Trustee as to any matter provided for
in such supplemental indenture. If the Company or the Trustee shall
so determine, new Debt Securities of any series so modified as to
conform, in the opinion of the Trustee and the Board of Directors of
the Company, to any
<PAGE>
modification of this Indenture contained in any such supplemental
indenture may be prepared and executed by the Company, authenticated
by the Trustee or the Authenticating Agent and delivered in exchange
for the Debt Securities of any series then outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental
--------------------------------------
Indenture to be Furnished to Trustee.
------------------------------------
The Trustee, subject to the provisions of Sections 6.01 and
6.02, may, in addition to the documents required by Section 13.06,
receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article IX. The Trustee
may receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article IX is
authorized or permitted by, and conforms to, the terms of this Article
IX and that it is proper for the Trustee under the provisions of this
Article IX to join in the execution thereof.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain
-----------------------------------------
Terms.
-----
Nothing contained in this Indenture or in the Debt
Securities of any series shall prevent any consolidation or merger of
the Company with or into any other corporation or corporations
(whether or not affiliated with the Company) or successive
consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of the property of the
Company or its successor or successors as an entirety, or
substantially as an entirety, to any other entity (whether or not
affiliated with the Company, or its successor or successors)
authorized to acquire and operate the same; provided, however, that
-------- -------
the Company hereby covenants and agrees that, upon any such
consolidation, merger (where the Company is not the surviving
corporation), sale, conveyance, transfer or other disposition, the due
and punctual payment of the principal of (and premium, if any) and
interest on all of the Debt Securities of all series in accordance
with the terms of each series, according to their tenor, and the due
and punctual performance and observance of all the covenants and
conditions of this Indenture with respect to each series or
established with respect to such series to be kept or performed by the
Company, shall be
<PAGE>
expressly assumed by supplemental indenture (which shall conform to
the provisions of the Trust Indenture Act, as then in effect,
applicable to indentures qualified thereunder) satisfactory in form to
the Trustee executed and delivered to the Trustee by the entity formed
by such consolidation, or into which the Company shall have been
merged, or by the entity which shall have acquired such property.
SECTION 10.02. Successor Entity to be Substituted.
----------------------------------
In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
entity, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and premium, if any, and interest
on all of the Debt Securities and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to
be performed or observed by the Company, such successor entity shall
succeed to and be substituted for the Company, with the same effect as
if it had been named herein as the Company, and thereupon the
predecessor entity shall be relieved of any further liability or
obligation hereunder or upon the Debt Securities. Such successor
entity thereupon may cause to be signed, and may issue either in its
own name or in the name of Leucadia National Corporation (but as to
which such successor entity, and not Leucadia National Corporation,
shall be liable), any or all of the Debt Securities issuable hereunder
which theretofore shall not have been signed by the Company and
delivered to the Trustee or the Authenticating Agent; and, upon the
order of such successor entity instead of the Company and subject to
all the terms, conditions and limitations in this Indenture
prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Debt Securities which previously shall have been
signed and delivered by the officers of the Company, to the Trustee or
the Authenticating Agent for authentication, and any Debt Securities
which such successor entity thereafter shall cause to be signed and
delivered to the Trustee or the Authenticating Agent for that purpose.
All the Debt Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Debt Securities
theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debt Securities had been issued at the
date of the execution hereof.
<PAGE>
SECTION 10.03. Opinion of Counsel to be Given to Trustee.
-----------------------------------------
The Trustee, subject to the provisions of Sections 6.01 and
6.02, may receive, in addition to the Opinion of Counsel required by
Section 9.05, an Opinion of Counsel as conclusive evidence that any
consolidation, merger, sale, conveyance, transfer or other
disposition, and any assumption, permitted or required by the terms of
this Article X complies with the provisions of this Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.
----------------------
When (a) the Company shall deliver to the Trustee for
cancellation all Debt Securities theretofore authenticated (other than
any Debt Securities which shall have been destroyed, lost or stolen
and which shall have been replaced or paid as provided in Section
2.08) and not theretofore canceled, or (b) all the Debt Securities not
theretofore canceled or delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due
and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption, and the Company shall deposit or cause to be
deposited with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption all of the Debt Securities (other than any
Debt Securities which shall have been destroyed, lost or stolen and
which shall have been replaced or paid as provided in Section 2.08)
not theretofore canceled or delivered to the Trustee for cancellation,
including principal and premium, if any, and interest due or to become
due to such date of maturity or redemption date, as the case may be,
but excluding, however, the amount of any moneys for the payment of
principal of, and premium, if any, or interest on the Debt Securities
(1) theretofore repaid to the Company in accordance with the
provisions of Section 11.04, or (2) paid to any state or to the
District of Columbia pursuant to its unclaimed property or similar
laws, and if in the case of either clause (a) or clause (b) the
Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Indenture shall cease to be of
further effect except for the provisions of Sections 2.05, 2.07, 2.08,
3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof shall survive until such
Debt Securities shall mature and be paid. Thereafter, Sections 6.10
and 11.04 shall survive, and the
<PAGE>
Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with, and at the
cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture, the
Company, however, hereby agreeing to reimburse the Trustee for any
costs or expenses thereafter reasonably and properly incurred by the
Trustee in connection with this Indenture or the Debt Securities.
SECTION 11.02. Deposited Moneys to be Held in Trust by
---------------------------------------
Trustee.
-------
Subject to the provisions of Section 11.04, all moneys
deposited with the Trustee pursuant to Section 11.01 shall be held in
trust and applied by it to the payment, either directly or through any
paying agent (including the Company if acting as its own paying
agent), to the holders of the particular Debt Securities for the
payment of which such moneys have been deposited with the Trustee, of
all sums due and to become due thereon for principal, and premium, if
any, and interest.
SECTION 11.03. Paying Agent to Repay Moneys Held.
---------------------------------
Upon the satisfaction and discharge of this Indenture all
moneys then held by any paying agent of the Debt Securities (other
than the Trustee) shall, upon demand of the Company, be repaid to it
or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such moneys.
SECTION 11.04. Return of Unclaimed Moneys.
--------------------------
Any moneys deposited with or paid to the Trustee or any
paying agent for payment of the principal of, and premium, if any, or
interest on Debt Securities and not applied but remaining unclaimed by
the holders of Debt Securities for one year after the date upon which
the principal of, and premium, if any, or interest on such Debt
Securities, as the case may be, shall have become due and payable,
shall be repaid to the Company by the Trustee or such paying agent on
written demand; and the holder of any of the Debt Securities shall
thereafter look only to the Company for any payment which such holder
may be entitled to collect and all liability of the Trustee or such
paying agent with respect to such moneys shall thereupon cease.
<PAGE>
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Debt Securities Solely
------------------------------------
Corporate Obligations.
---------------------
No recourse for the payment of the principal of or premium,
if any, or interest on any Debt Security, or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon
any obligation, covenant or agreement of the Company in this Indenture
or in any supplemental indenture, or in any such Debt Security, or
because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor
corporation of the Company, either directly or through the Company or
any successor corporation of the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that
all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this
Indenture and the issue of the Debt Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors.
----------
All the covenants, stipulations, promises and agreements in
this Indenture contained by the Company shall bind its successors and
assigns whether so expressed or not.
SECTION 13.02. Official Acts by Successor Entity.
---------------------------------
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with
like force and effect by the like board, committee, officer or other
authorized Person of any entity that shall at the time be the lawful
successor of the Company.
SECTION 13.03. Surrender of Company Powers.
---------------------------
The Company by instrument in writing executed by authority
of its Board of Directors and delivered to the Trustee
<PAGE>
may surrender any of the powers reserved to the Company and thereupon
such power so surrendered shall terminate both as to the Company, and
as to any permitted successor.
SECTION 13.04. Addresses for Notices, etc.
--------------------------
Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the
Trustee or by the holders of Debt Securities on the Company may be
given or served by being deposited postage prepaid by registered or
certified mail in a post office letter box addressed (until another
address is filed by the Company, with the Trustee for the purpose) to
the Company, Leucadia National Corporation, Attention: Ruth
Klindtworth, Corporate Secretary. Any notice, direction, request or
demand by any Securityholder or the Company to or upon the Trustee
shall be deemed to have been sufficiently given or made, for all
purposes, if given or made in writing at the office of the Trustee,
addressed to the Trustee, 450 West 33rd Street, New York, New York
10001, Attention: Corporate Trustee Administration Department.
SECTION 13.05. Governing Law.
-------------
This Indenture and each Debt Security shall be deemed to be
a contract made under the laws of the State of New York, and for all
purposes shall be governed by and construed in accordance with the
laws of said State, without regard to conflict of laws principles
thereof.
SECTION 13.06. Evidence of Compliance with Conditions
--------------------------------------
Precedent.
---------
Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating
that in the opinion of the signers all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been
complied with.
Each certificate or opinion provided for in this Indenture
and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1)
a statement that the person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the
nature and scope of the examination or investigation upon which the
statements or opinions contained in
<PAGE>
such certificate or opinion are based; (3) a statement that, in the
opinion of such person, he has made such examination or investigation
as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 13.07. Non-Business Days.
-----------------
Subject to Section 2.03, in any case where the date of
payment of interest on or principal of the Debt Securities will be a
Saturday, Sunday or a day on which banking institutions in
New York City (in the State of New York) are permitted or required by
any applicable law to close, the payment of such interest on or
principal of the Debt Securities need not be made on such date but may
be made on the next succeeding day not a Saturday, Sunday or a day on
which banking institutions in such City are permitted or required by
any applicable law to close, in each case with the same force and
effect as if made on the date of payment and no interest shall accrue
for the period from and after such date.
SECTION 13.08. Trust Indenture Act to Control.
------------------------------
If and to the extent that any provision of this Indenture
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 13.09. Table of Contents, Headings, etc.
--------------------------------
The table of contents and the titles and headings of the
articles and sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof,
and shall in no way modify or restrict any of the terms or provisions
hereof.
SECTION 13.10. Execution in Counterparts.
-------------------------
This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same
instrument.
<PAGE>
SECTION 13.11. Separability.
------------
In case any one or more of the provisions contained in this
Indenture or in the Debt Securities of any series shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Indenture or of such Debt Securities, but this
Indenture and such Debt Securities shall be construed as if such
invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 13.12. Assignment.
----------
The Company will have the right at all times to assign any
of its rights or obligations under this Indenture to a direct or
indirect wholly owned Subsidiary of the Company, provided that, in the
event of any such assignment, the Company will remain liable for all
such obligations. Subject to the foregoing, this Indenture is binding
upon and inures to the benefit of the parties hereto and their
respective successors and assigns. This Indenture may not otherwise be
assigned by the parties thereto.
SECTION 13.13. Acknowledgment of Rights.
------------------------
The Company acknowledges that, with respect to any Debt
Securities held by any Leucadia Trust or the Institutional Trustee of
such Leucadia Trust, if the Institutional Trustee of such Leucadia
Trust fails to enforce its rights under this Indenture as the holder
of the series of Debt Securities held as the assets of such Leucadia
Trust after the holders of a majority in liquidation amount of the
Capital Securities have so directed the Institutional Trustee of such
Leucadia Trust, a holder of record of Capital Securities may, to the
fullest extent permitted by law, institute legal proceedings directly
against the Company to enforce such Institutional Trustee's rights
under this Indenture without first instituting any legal proceedings
against such Institutional Trustee or any other Person.
Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the
Company to pay interest (or premium, if any) or principal on the
applicable series of Debt Securities on the date such interest (or
premium, if any) or principal is otherwise payable, after giving
effect to any valid extension of an interest payment period (or in the
case of redemption, on the redemption date), the Company acknowledges
that a holder of record of Capital Securities of the Leucadia Trust
that purchased the applicable series of Debt Securities may directly
institute a proceeding against the Company for enforcement of payment
on or after the
<PAGE>
respective due date specified in the applicable series of Debt
Securities to such holder directly of the principal of (or premium, if
any) or interest on the applicable series of Debt Securities having an
aggregate principal amount equal to the aggregate liquidation amount
of the Capital Securities of such holder.
ARTICLE XIV
REDEMPTION OF SECURITIES -- MANDATORY AND
OPTIONAL SINKING FUND
SECTION 14.01. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to the
Debt Securities of any series which are redeemable before their
maturity or to any sinking fund for the retirement of Debt Securities
of a series except as otherwise specified as contemplated by Section
2.03 for Debt Securities of such series.
SECTION 14.02. Notice of Redemption; Selection of Debt
---------------------------------------
Securities.
----------
In case the Company shall desire to exercise the right to
redeem all, or, as the case may be, any part of the Debt Securities of
any series in accordance with their terms, it shall fix a date for
redemption and shall mail a notice of such redemption at least 30 and
not more than 60 days prior to the date fixed for redemption to the
holders of Debt Securities of such series so to be redeemed as a whole
or in part at their last addresses as the same appear on the Debt
Security Register. Such mailing shall be by first class mail. 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, failure to give such notice by mail or any
defect in the notice to the holder of any Debt Security of a series
designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Debt
Security of such series.
Each such notice of redemption shall specify the CUSIP
number of the Debt Securities to be redeemed, the date fixed for
redemption, the redemption price at which Debt Securities of such
series are to be redeemed, the place or places of payment, that
payment will be made upon presentation and surrender of such Debt
Securities, that interest accrued to the date fixed for redemption
will be paid as specified in said notice, and that on and after said
date interest thereon or on the portions thereof
<PAGE>
to be redeemed will cease to accrue. If less than all the Debt
Securities of such series are to be redeemed the notice of redemption
shall specify the numbers of the Debt Securities of that series to be
redeemed. In case any Debt Security of a series is to be redeemed in
part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and
after the date fixed for redemption, upon surrender of such Debt
Security, a new Debt Security or Debt Securities of that series in
principal amount equal to the unredeemed portion thereof will be
issued.
On or prior to the redemption date specified in the notice
of redemption given as provided in this Section, the Company will
deposit with the Trustee or with one or more paying agents an amount
of money sufficient to redeem on the redemption date all the Debt
Securities so called for redemption at the appropriate redemption
price, together with accrued interest to the date fixed for
redemption.
If all, or less than all, the Debt Securities of a series
are to be redeemed, the Company will give the Trustee notice not less
than 45 nor more than 60 days, respectively, prior to the redemption
date as to the aggregate principal amount of Debt Securities of that
series to be redeemed and the Trustee shall select, in such manner as
in its sole discretion it shall deem appropriate and fair, the Debt
Securities of that series or portions thereof (in integral multiples
of $1,000, except as otherwise set forth in the applicable form of
Debt Security) to be redeemed.
SECTION 14.03. Payment of Debt Securities Called for
-------------------------------------
Redemption.
----------
If notice of redemption has been given as provided in
Section 14.02 or Section 14.04, the Debt Securities or portions of
Debt Securities of the series with respect to which such notice has
been given shall become due and payable on the date and at the place
or places stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and
on and after said date (unless the Company shall default in the
payment of such Debt Securities at the redemption price, together with
interest accrued to said date) interest on the Debt Securities or
portions of Debt Securities of any series so called for redemption
shall cease to accrue. On presentation and surrender of such Debt
Securities at a place of payment specified in said notice, the said
Debt Securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price,
<PAGE>
together with interest accrued thereon to the date fixed for
redemption.
Upon presentation of any Debt Security of any series
redeemed in part only, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the holder thereof, at
the expense of the Company, a new Debt Security or Debt Securities of
such series of authorized denominations, in principal amount equal to
the unredeemed portion of the Debt Security so presented.
SECTION 14.04. Mandatory and Optional Sinking Fund.
-----------------------------------
The minimum amount of any sinking fund payment provided for
by the terms of Debt Securities of any series is herein referred to as
a "mandatory sinking fund payment," and any payment in excess of such
minimum amount provided for by the terms of Debt Securities of any
series is herein referred to as an "optional sinking fund payment."
The last date on which any such payment may be made is herein referred
to as a "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking
fund payment with respect to any Debt Securities of a series in cash,
the Company may at its option (a) deliver to the Trustee Debt
Securities of that series theretofore purchased by the Company and (b)
may apply as a credit Debt Securities of that series which have been
redeemed either at the election of the Company pursuant to the terms
of such Debt Securities or through the application of optional sinking
fund payments pursuant to the next succeeding paragraph, in each case
in satisfaction of all or any part of any mandatory sinking fund
payment, provided that such Debt Securities have not been previously
so credited. Each such Debt Security so delivered or applied as a
credit shall be credited at the sinking fund redemption price for such
Debt Securities and the amount of any mandatory sinking fund shall be
reduced accordingly. If the Company intends so to deliver or credit
such Debt Securities with respect to any mandatory sinking fund
payment it shall deliver to the Trustee at least 60 days prior to the
next succeeding sinking fund payment date for such series (a) a
certificate signed by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer of the Company specifying the
portion of such sinking fund payment, if any, to be satisfied by
payment of cash and the portion of such sinking fund payment, if any,
which is to be satisfied by delivering and crediting such Debt
Securities and the basis for such credit and stating that such Debt
Securities have not been previously so credited and (b) any Debt
Securities to be so delivered. All
<PAGE>
Debt Securities so delivered to the Trustee shall be canceled by the
Trustee and no Debt Securities shall be authenticated in lieu thereof.
If the Company fails to deliver such certificate and Debt Securities
at or before the time provided above, the Company shall not be
permitted to satisfy any portion of such mandatory sinking fund
payment by delivery or credit of Debt Securities.
At its option the Company may pay into the sinking fund for
the retirement of Debt Securities of any particular series, on or
before each sinking fund payment date for such series, any additional
sum in cash as specified by the terms of such series of Debt
Securities. If the Company intends to exercise its right to make any
such optional sinking fund payment, it shall deliver to the Trustee at
least 60 days prior to the next succeeding sinking fund payment date
for such series a certificate signed by the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer of the Company
stating that the Company intends to exercise such optional right and
specifying the amount which the Company intends to pay on such sinking
fund payment date. If the Company fails to deliver such certificate
at or before the time provided above, the Company shall not be
permitted to make any optional sinking fund payment with respect to
such sinking fund payment date. To the extent that such right is not
exercised in any year it shall not be cumulative or carried forward to
any subsequent year.
If the sinking fund payment or payments (mandatory or
optional) made in cash plus any unused balance of any preceding
sinking fund payments made in cash shall exceed $50,000 (or a lesser
sum if the Company shall so request) with respect to the Debt
Securities of any particular series, it shall be applied by the
Trustee or one or more paying agents on the next succeeding sinking
fund payment date to the redemption of Debt Securities of such series
at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. The Trustee shall select, in the
manner provided in Section 14.02, for redemption on such sinking fund
payment date a sufficient principal amount of Debt Securities of such
series to absorb said cash, as nearly as may be, and the Trustee
shall, at the expense and in the name of the Company, thereupon cause
notice of redemption of Debt Securities of such series to be given in
substantially the manner and with the effect provided in Sections
14.02 and 14.03 for the redemption of Debt Securities of that series
in part at the option of the Company, except that the notice of
redemption shall also state that the Debt Securities of such series
are being redeemed for the sinking fund. Any sinking fund moneys not
so applied or allocated by the Trustee or any paying agent to the
redemption of Debt Securities of that series
<PAGE>
shall be added to the next cash sinking fund payment received by the
Trustee or such paying agent and, together with such payment, shall be
applied in accordance with the provisions of this Section 14.04. Any
and all sinking fund moneys held by the Trustee or any paying agent on
the maturity date of the Debt Securities of any particular series, and
not held for the payment or redemption of particular Debt Securities
of such series, shall be applied by the Trustee or such paying agent,
together with other moneys, if necessary, to be deposited sufficient
for the purpose, to the payment of the principal of the Debt
Securities of that series at maturity.
On or before each sinking fund payment date, the Company
shall pay to the Trustee or to one or more paying agents in cash a sum
equal to all interest accrued to the date fixed for redemption on Debt
Securities to be redeemed on the next following sinking fund payment
date pursuant to this Section.
Neither the Trustee nor any paying agent shall redeem any
Debt Securities of a series with sinking fund moneys, and the Trustee
shall not mail any notice of redemption of Debt Securities for such
series by operation of the sinking fund, during the continuance of a
default in payment of interest on such Debt Securities or of any Event
of Default (other than an Event of Default occurring as a consequence
of this paragraph), except that if the notice of redemption of any
Debt Securities shall theretofore have been mailed in accordance with
the provisions hereof, the Trustee or any paying agent shall redeem
such Debt Securities if cash sufficient for that purpose shall be
deposited with the Trustee or such paying agent for that purpose in
accordance with the terms of this Article XIV. Except as aforesaid,
any moneys in the sinking fund for such series at the time when any
such default or Event of Default shall occur and any moneys thereafter
paid into the sinking fund shall, during the continuance of such
default or Event of Default, be held as security for the payment of
all such Debt Securities; provided, however, that in case such Event
-------- -------
of Default or default, shall have been cured or waived as provided
herein, such moneys shall thereafter be applied on the next succeeding
sinking fund payment date on which such moneys may be applied pursuant
to the provisions of this Section 14.04.
<PAGE>
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
SECTION 15.01. Agreement to Subordinate.
------------------------
The Company covenants and agrees, and each holder of Debt
Securities issued hereunder and under any supplemental indenture or by
any Board Resolution ("Additional Provisions") by such
Securityholder's acceptance thereof likewise covenants and agrees,
that all Debt Securities shall be issued subject to the provisions of
this Article XV; and each holder of a Debt Security, whether upon
original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of, and premium,
if any, and interest on all Debt Securities issued hereunder and under
any Additional Provisions shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment
to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or
thereafter incurred.
No provision of this Article XV shall prevent the occurrence
of any default or Event of Default hereunder.
SECTION 15.02. Default on Senior Indebtedness.
------------------------------
In the event and during the continuation of any default by
the Company in the payment of principal, premium, interest or any
other payment due on any Senior Indebtedness of the Company following
any grace period, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default,
then, in either case, no payment shall be made by the Company with
respect to the principal (including redemption and sinking fund
payments) of, or premium, if any, or interest on the Debt Securities.
In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee when such payment is
prohibited by the preceding paragraph of this Section 15.02, such
payment shall, subject to Section 15.06, be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such
Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the
<PAGE>
holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90
days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
------------------------------------
Upon any payment by the Company or distribution of assets of
the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or
liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due upon all Senior Indebtedness of the
Company shall first be paid in full, or payment thereof provided for
in money in accordance with its terms, before any payment is made by
the Company, on account of the principal (and premium, if any) or
interest on the Debt Securities; and upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the
Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, shall be paid
by the Company, or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or
by the Securityholders or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness
of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which
any instruments evidencing such Senior Indebtedness may have been
issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money's
worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Indebtedness, before any payment
or distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Trustee before all Senior
Indebtedness of the Company is paid in full, or provision is made for
such payment in money in accordance with its terms, such
<PAGE>
payment or distribution shall be held in trust for the benefit of and
shall be paid over or delivered to the holders of such Senior
Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the
Company, for application to the payment of all Senior Indebtedness of
the Company, remaining unpaid to the extent necessary to pay such
Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or
for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property
or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or
any other corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinated at least to the
extent provided in this Article XV with respect to the Debt Securities
to the payment of all Senior Indebtedness of the Company, that may at
the time be outstanding, provided that (i) such Senior Indebtedness 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 Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following
the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms
and conditions provided for in Article X of this Indenture shall not
be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 15.03 if such other corporation shall, as
a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article X of this Indenture. Nothing in
Section 15.02 or in this Section 15.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06 of this
Indenture.
SECTION 15.04. Subrogation.
-----------
Subject to the payment in full of all Senior Indebtedness of
the Company, the Securityholders shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company,
applicable to such Senior Indebtedness until the principal of (and
premium, if any) and
<PAGE>
interest on the Debt Securities shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the
holders of such Senior Indebtedness of any cash, property or
securities to which the Securityholders or the Trustee would be
entitled except for the provisions of this Article XV, and no payment
over pursuant to the provisions of this Article XV to or for the
benefit of the holders of such Senior Indebtedness by Securityholders
or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness of the Company, and the holders of
the Debt Securities be deemed to be a payment or distribution by the
Company to or on account of such Senior Indebtedness. It is
understood that the provisions of this Article XV are and are intended
solely for the purposes of defining the relative rights of the holders
of the Securities, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this
Indenture, any Additional Provisions or in the Debt Securities is
intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness of the Company, and the
holders of the Debt Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the holders of the Debt
Securities the principal of (and premium, if any) and interest on the
Debt Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the
relative rights of the holders of the Debt Securities and creditors of
the Company, other than the holders of Senior Indebtedness of the
Company, nor shall anything herein or therein prevent the Trustee or
the holder of any Debt Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XV of the holders of such
Senior Indebtedness in respect of cash, property or securities of the
Company, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee, subject to the provisions
of Article VI of this Indenture, and the Securityholders shall be
entitled to conclusively rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution, winding-up,
liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Securityholders, for the purposes
of ascertaining the Persons entitled to participate in such
distribution, the holders
<PAGE>
of Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Article XV.
SECTION 15.05. Trustee to Effectuate Subordination.
-----------------------------------
Each Securityholder by such Securityholder's acceptance
thereof authorizes and directs the Trustee on such Securityholder's
behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article XV and appoints
the Trustee such Securityholder's attorney-in-fact for any and all
such purposes.
SECTION 15.06. Notice by the Company.
---------------------
The Company shall give prompt written notice to a
Responsible Officer of the Trustee at the Principal Office of the
Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debt Securities pursuant to the provisions of this Article XV.
Notwithstanding the provisions of this Article XV or any other
provision of this Indenture or any Additional Provisions, the Trustee
shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debt Securities pursuant to the provisions
of this Article XV, unless and until a Responsible Officer of the
Trustee at the Principal Office of the Trustee shall have received
written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Trustee, subject to the
provisions of Article VI of this Indenture, shall be entitled in all
respects to assume that no such facts exist; provided, however, that
-------- -------
if the Trustee shall not have received the notice provided for in this
Section 15.06 at least two Business Days prior to the date upon which
by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or
premium, if any) or interest on any Debt Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the
same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the
<PAGE>
delivery to it of a written notice by a Person representing himself to
be a holder of Senior Indebtedness of the Company (or a trustee or
representative on behalf of such holder), to establish that such
notice has been given by a holder of such Senior Indebtedness or a
trustee or representative on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a
holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XV, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in
such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XV, and, if such evidence is
not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to
receive such payment.
SECTION 15.07. Rights of the Trustee; Holders of Senior
----------------------------------------
Indebtedness.
------------
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article XV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture or any
Additional Provisions shall deprive the Trustee of any of its rights
as such holder.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such of
its covenants and obligations as are specifically set forth in this
Article XV, and no implied covenants or obligations with respect to
the holders of such Senior Indebtedness shall be read into this
Indenture or any Additional Provisions against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders
of such Senior Indebtedness and, subject to the provisions of Article
VI of this Indenture, the Trustee shall not be liable to any holder of
such Senior Indebtedness if it shall pay over or deliver to
Securityholders, the Company or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by
virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06.
<PAGE>
SECTION 15.08. Subordination May Not Be Impaired.
---------------------------------
No right of any present or future holder of any Senior
Indebtedness of the Company 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 otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at
any time and from time to time, without the consent of or notice to
the Trustee or the Securityholders, without incurring responsibility
to the Securityholders and without impairing or releasing the
subordination provided in this Article XV or the obligations hereunder
of the holders of the Debt Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or
renew or alter, such Senior Indebtedness, or otherwise amend or
supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for
the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company, and any other
Person.
The Chase Manhattan Bank hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions herein
above set forth.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereunto
duly authorized, as of the day and year first above written.
LEUCADIA NATIONAL CORPORATION
By /s/ Barbara Lowenthal
--------------------------------------
Name: Barbara Lowenthal
Title: Vice President
THE CHASE MANHATTAN BANK, as Trustee
By /s/ Patricia Kelly
--------------------------------------
Name: Patricia Kelly
Title: Vice President
NYFS04...:\30\76830\0146\1197\IND1297X.320
EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE
between
LEUCADIA NATIONAL CORPORATION, as Issuer,
and
THE CHASE MANHATTAN BANK, as Trustee
Dated as of January 21, 1997
____________________
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES . . . . 4
ARTICLE III
REDEMPTION OF THE DEBENTURES . . . . . . . . . . . . . 10
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD . . . . . . . . . 11
ARTICLE V
EXPENSES AND GUARANTEE . . . . . . . . . . . . . . . . 13
ARTICLE VI
FORM OF DEBENTURE . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 26
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of January 21, 1997
(the "First Supplemental Indenture"), between Leucadia National
Corporation, a New York corporation (the "Company") and The Chase
Manhattan Bank, as trustee (the "Trustee"), under the Indenture dated
as of January 21, 1997 between the Company and the Trustee (the
"Indenture").
WHEREAS, the Company executed and delivered the Indenture to
the Trustee to provide for the issuance of the Company s unsecured
junior subordinated debt securities to be issued from time to time in
one or more series as might be determined by the Company under the
Indenture, in an unlimited aggregate principal amount which may be
authenticated and delivered as provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company
desires to provide for the establishment of a series of its Debt
Securities to be known as 8.65% Junior Subordinated Deferrable
Interest Debentures due 2027 (the "Initial Debentures"), and to
provide for, if and when issued in exchange for the Initial Debentures
pursuant to the Indenture and the Registration Agreement, a series of
its Debt Securities to be known as 8.65% Junior Subordinated
Deferrable Interest Debentures due 2027 (the "Exchange Debentures" and
together with the Initial Debentures, the "Debentures"), the form and
substance of each such series of Debentures and the terms, provisions
and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture;
WHEREAS, Leucadia Capital Trust I, a Delaware statutory
business trust (the "Trust"), has offered for sale pursuant to an
exemption from the registration requirements of the Securities Act of
1933, $150,000,000 aggregate liquidation amount of 8.65% Capital Trust
Pass-through Securities (the "Initial Capital Securities"),
representing undivided beneficial interests in the assets of the Trust
and proposes to invest the proceeds from such offering, together with
the proceeds of the issuance and sale by the Trust to the Company of
its common securities, in $154,640,000 aggregate principal amount of
the Debentures;
WHEREAS, the Trust may offer and issue 8.65% Capital Trust
Pass-through Securities (the "Exchange Capital Securities") in
exchange for the Initial Capital Securities; and
WHEREAS, the Company has requested that the Trustee execute
and deliver this First Supplemental Indenture; all requirements
necessary to make this First Supplemental Indenture a valid instrument
in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the
Trustee, the valid obligations of the Company,
<PAGE>
have been performed; and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects;
NOW THEREFORE, in consideration of the purchase and
acceptance of the Initial Debentures by the holders thereof, and for
the purpose of setting forth, as provided in the Indenture, the form
and substance of each series of Debentures and the terms, provisions
and conditions thereof, the Company covenants and agrees with the
Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1
-----------
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when
used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture
has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and do not
affect interpretation;
(f) the following terms have the meanings given to them in the
Declaration: (i) Administrators; (ii) Business Day; (iii) Capital Security
Certificate; (iv) Clearing Agency; (v) Delaware Trustee; (vi) Depositary;
(vii) Distribution; (viii) Institutional Trustee; (ix) Purchase Agreement;
(x) Redemption Tax Opinion; and (xi) Tax Event;
(g) the following terms have the meanings given to them in this
Section 1.1(g):
<PAGE>
"Additional Interest" shall have the meaning set forth in
Section 2.5(c).
"Call Price" shall have the meaning set forth in Section 3.2.
"Compounded Interest" shall have the meaning set forth in
Section 4.1.
"Declaration" means the Amended and Restated Declaration of
Trust of the Trust, dated as of January 21, 1997, as amended or
supplemented from time to time.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
"Dissolution Event" means that the Trust is to be dissolved
in accordance with the Declaration, and the Debentures held by the
Institutional Trustee are to be distributed to the holders of the
Trust Securities issued by the Trust pro rata in accordance with the
Declaration.
"Extension Period" shall have the meaning set forth in
Section 4.1.
"Global Debenture" shall have the meaning set forth in
Section 2.4(a)(i).
"interest" shall include all interest payable on a series of
Debentures including any Additional Interest, Compounded Interest and
Special Interest, if applicable.
"Maturity Date" means January 15, 2027.
"Non-Book-Entry Capital Securities" shall have the meaning
set forth in Section 2.4(a)(ii).
"Record Date" shall have the meaning set forth in the
Debentures.
"Registration Agreement" means the Registration Rights
Agreement, dated January 21, 1997, relating to the Debentures and the
other securities described therein among the Company, the Trust and
the initial purchasers named therein.
"Registered Exchange Offer" has the meaning set forth in the
Registration Agreement.
"Shelf Registration Event" has the meaning set forth in
Section 2.5(e)(ii).
<PAGE>
"Special Interest" has the meaning set forth in Section
2.5(e)(iv).
"Tax Contingency" means that the Company shall determine in
good faith that there is a reasonable likelihood that, or a material
uncertainty as to whether, consummation of the Registered Exchange
Offer would result in an adverse tax consequence to the Company.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1
-----------
The Initial Debentures and the Exchange Debentures are
hereby authorized as two series of Debt Securities. The aggregate
principal amount of Debentures outstanding at any time shall not
exceed $154,640,000 (except as set forth in Section 2.03(2) of the
Indenture). Upon receipt of a written order of the Company for the
authentication and delivery of a series of Debentures and satisfaction
of the requirements of Section 2.04 of the Indenture, the Trustee
shall authenticate (a) Initial Debentures for original issuance in an
aggregate principal amount not to exceed $154,640,000 (except as set
forth in Section 2.03(2) of the Indenture) or (b) Exchange Debentures
for issuance pursuant to a Registered Exchange Offer for Initial
Debentures in a principal amount equal to the principal amount of
Initial Debentures exchanged in such Registered Exchange Offer.
The Initial Debentures shall be issued pursuant to an
exemption from registration under the Securities Act and the
Restricted Securities Legend shall appear thereon, unless otherwise
determined by the Company in accordance with applicable law. The
Initial Debentures may not be transferred except in compliance with
the Restricted Securities Legend set forth in Section 2.07 of the
Indenture, unless otherwise determined by the Company in accordance
with applicable law. The Initial Debentures shall be issued in
minimum denominations of $100,000 and any integral multiple of $1,000
in excess thereof, and the Exchange Debentures shall be issuable in
minimum denominations of $1,000 and any integral multiple of $1,000 in
excess thereof.
SECTION 2.2
-----------
At the Maturity Date, the Debentures shall mature and the
principal thereof shall be due and payable together with all accrued
and unpaid interest thereon including Compounded Interest, Additional
Interest and Special Interest thereon, if any.
<PAGE>
SECTION 2.3
-----------
Except as provided in Section 2.4, Debentures of a series
shall be issued in fully registered certificated form without interest
coupons. Principal and interest on Debentures of a series issued in
certificated form will be payable, the transfer of such Debentures
will be registrable and such Debentures will be exchangeable for
Debentures of such series bearing identical terms and provisions at
the office or agency of the Company in the Borough of Manhattan, The
City of New York, which office or agency shall initially be the
corporate trust office of the Trustee; provided, however, that payment
-------- -------
of interest may be made at the option of the Company by check mailed
to the holder of any Debenture at such address as shall appear in the
Debt Security Register for such series of Debentures or by wire
transfer to an account appropriately designated by such holder.
Notwithstanding the foregoing, so long as the holder of any Debentures
of a series is the Institutional Trustee, the payment of the principal
of (and premium, if any) and interest (including Compounded Interest,
Additional Interest and Special Interest, if any) on the Debentures
held by the Institutional Trustee will be made at such place and to
such account as may be designated by the Institutional Trustee.
SECTION 2.4
-----------
(a) In connection with a Dissolution Event,
(i) except as provided in clause (ii) of this sentence,
Debentures of a series in certificated form may be presented to the
Trustee by the Institutional Trustee in exchange for a Global
Security for such series in an aggregate principal amount equal to
the aggregate principal amount of all outstanding Debentures of such
series (a "Global Debenture"), to be registered in the name of The
Depository Trust Company, New York, New York, or its nominee (hereby
designated to be the Depositary for Debentures of such series), and
delivered by the Trustee to the Depositary or its custodian for
crediting to the accounts of the Depositary s participants pursuant
to the instructions of the Administrators of the Trust, which
instructions shall be provided in accordance with the terms of the
Declaration; the Company upon any such presentation shall execute a
Global Debenture for such series in such aggregate principal amount
and deliver the same to the Trustee for authentication and delivery
in accordance with the Indenture and this First Supplemental
Indenture; payments on the
<PAGE>
Debentures of a series issued as a Global Debenture will be made to
the Depositary;
(ii) if any Capital Securities of a series are not held by the
Clearing Agency or its nominee ("Non-Book-Entry Capital
Securities"), the Debentures in certificated form of the series held
by the Trust corresponding to such Capital Securities of such series
may be presented to the Trustee by the Institutional Trustee and any
Capital Security Certificate which represents such Non-Book-Entry
Capital Securities will be deemed to represent beneficial interests
in Debentures so presented to the Trustee by the Institutional
Trustee having an aggregate principal amount equal to the aggregate
liquidation amount of such Non-Book-Entry Capital Securities until
such Capital Security Certificates are presented to the Debt
Security registrar for registration of transfer or reissuance at
which time such Capital Security Certificates will be canceled and a
Debenture of the series previously held by the Trust registered in
the name of the holder of the Capital Security Certificate or the
transferee of the holder of such Capital Security Certificate, as
the case may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Capital Security Certificate
canceled, will be executed by the Company and delivered to the
Trustee for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture; upon issue of such
Debentures of such series, Debentures of such series with an
equivalent aggregate principal amount that were presented by the
Institutional Trustee to the Trustee will be deemed to have been
canceled; and
(iii) prior to the distribution of Debentures of a series held
by the Institutional Trustee to the holders of Trust Securities, the
Company and the Trustee shall enter into a supplemental indenture
pursuant to Article IX of the Indenture to provide for transfer
procedures and restrictions with respect to such Debentures of such
series substantially similar to those contained in the Declaration
with respect to Capital Securities of the corresponding series to
the extent applicable in the circumstances existing at the time of
distribution of Debentures of such series in connection with a
Dissolution Event for purposes of assuring that no registration of
Debentures of such series is required under the Securities Act of
1933, as amended.
<PAGE>
(b) A Global Debenture may be transferred, in whole but not in
part, only 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,
or to a successor Depositary selected or approved by the Company or to a
nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the
Depositary shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Depositary is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of
such condition, as the case may be, the Company will execute, and, subject
to Article II of the Indenture, the Trustee, upon written request of the
Company, will authenticate and make available for delivery, Debentures of
each series in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture of such series in exchange for such Global
Debenture. In addition, the Company may at any time determine that the
Debentures of a series shall no longer be represented by a Global
Debenture. In such event the Company will execute, and subject to Section
2.07 of the Indenture, the Trustee, upon receipt of an Officers Certificate
evidencing such determination by the Company, will authenticate and deliver
Debentures of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Debenture of such series in exchange for
such Global Debenture. A Global Debenture shall also be exchangeable for
Debentures in definitive form upon the occurrence of an Event of Default.
Upon the exchange of a Global Debenture for Debentures in definitive
registered form without coupons, in authorized denominations, such Global
Debenture shall be canceled by the Trustee. Such Debentures in definitive
registered form issued in exchange for such 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 Trustee. The Trustee shall
deliver such Debentures to the Depositary for delivery to the Persons in
whose names such Debentures are so registered.
SECTION 2.5
-----------
(a) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except as
<PAGE>
provided in the following sentence, the amount of interest payable for
any period shorter than a full semiannual period for which interest is
computed, will be computed on the basis of the actual number of days
elapsed in such a period (assuming each full month elapsed in such
period consists of 30 days). In the event that any date on which
interest is payable on the Debentures of a series is not a Business
Day, then payment of interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
(b) The indebtedness evidenced by all Debentures of a series is
subordinate and junior in right of payment to the prior payment in full of
all present and future Senior Indebtedness and pari passu in right of
payment with all Debentures of each other series.
(c) If, at any time while the holder of any Debentures of a
series is the Institutional Trustee, the Trust is required to pay any
taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any other
taxing authority, then, in any such case, the Company shall pay as
additional interest ("Additional Interest") on the Debentures held by the
Institutional Trustee, such additional amounts as shall be required so that
the net amounts received and retained by the Trust after paying such taxes,
duties, assessments or other governmental charges will be equal to the
amounts the Trust and the Institutional Trustee would have received had no
such taxes, duties, assessments or other governmental charges been imposed.
(d) If an Initial Debenture is exchanged in a Registered Exchange
Offer prior to the Record Date for the first Interest Payment Date
following such exchange, accrued and unpaid interest, if any, on such
Initial Debenture, up to but not including the date of issuance of the
Exchange Debenture or Exchange Debentures issued in exchange for such
Initial Debenture, shall be paid on the first Interest Payment Date for
such Exchange Debenture or Exchange Debentures to the Securityholder or
Securityholders of such Exchange Debenture or Exchange Debentures on the
first Record Date with respect to such Exchange Debenture or Exchange
Debentures. If an Initial Debenture is exchanged in a Registered Exchange
Offer subsequent to the Record Date for the first
<PAGE>
Interest Payment Date following such exchange but on or prior to such
Interest Payment Date, then any such accrued and unpaid interest with
respect to such Initial Debenture and any accrued and unpaid interest
on the Exchange Debenture or Exchange Debentures issued in exchange
for such Initial Debenture, through the day before such Interest
Payment Date, shall be paid on such Interest Payment Date to the
Securityholder of such Initial Debenture on such Record Date.
(e) The following terms relate to Special Interest:
(i) Except as described in paragraph (ii), in the event that
either (A) the Exchange Offer Registration Statement (as such term
is defined in the Registration Agreement) is not filed with the
Securities and Exchange Commission (the "Commission") on or prior to
the 120th day following the Closing Date (as such term is defined in
the Registration Agreement), (B) the Exchange Offer Registration
Statement is not declared effective by the Commission on or prior to
the 180th day following the Closing Date or (C) the Registered
Exchange Offer (as such term is defined in the Registration
Agreement) is not consummated or a Shelf Registration Statement (as
such term is defined in the Registration Agreement) with respect to
the Initial Debentures is not declared effective by the Commission
on or prior to the 210th day following the Closing Date, interest
shall accrue on Initial Debentures (in addition to the stated
interest on Initial Debentures) from and including the next day
following each of (1) such 120-day period in the case of clause (A)
above, (2) such 180-day period in the case of clause (B) above and
(3) such 210- day period in the case of clause (C) above. In each
case, such additional interest shall accrue at a rate per annum
equal to --- ----- 0.25% of the principal amount of the Initial
Debentures (determined daily). The aggregate amount of additional
interest payable pursuant to the above provisions will in no event
exceed 0.25% per annum of the principal amount of the Initial
Debentures --- ----- (determined daily). Upon (X) the filing of the
Exchange Offer Registration Statement or the occurrence of a Shelf
Registration Event (as defined below), if applicable, after the
120-day period described in clause (A) above, (Y) the effectiveness
of the Exchange Offer Registration Statement (if applicable) (or the
filing of a Shelf Registration Statement, in the event of a Shelf
Registration Event, if applicable) after the 180-day period
described in clause (B) above or (Z) the consummation of the
Registered Exchange Offer or the effectiveness of a Shelf
Registration Statement, as the case may be, after the 210-
<PAGE>
day period described in clause (C) above (or the effectiveness of a
Shelf Registration Statement after the 240-day period specified
below, in the event of a Shelf Registration Event, if applicable),
the additional interest payable on the Initial Debentures, with
respect to such clause (A), (B) or (C), as the case may be, from the
date of such filing, effectiveness or consummation, as the case may
be, shall cease to accrue.
(ii) In the event that on or before the 120th day following
the Closing Date, applicable law or applicable interpretations of
the staff of the Commission do not permit the Company and the Trust
to effect the Registered Exchange Offer, or if a Tax Contingency
exists (each, a "Shelf Registration Event"), then clauses (A) and
(1) of paragraph (i) shall not apply. To the extent that such a
Shelf Registration Event exists and the Company has filed a Shelf
Registration Statement covering resales of the Initial Debentures by
the 180th day following the Closing Date, then clauses (B) and (2)
of paragraph (i) shall not apply, and to the extent a Shelf
Registration Event exists on the 210th day following the Closing
Date, the period specified in clauses (C) and (3) of paragraph (i)
will be 240 days.
(iii) In the event that the Shelf Registration Statement is
declared effective pursuant to the terms of the Registration
Agreement, if the Company or the Trust fails to keep such Shelf
Registration Statement filed pursuant to Section 3(i) or Section
3(ii) of the Registration Agreement continuously effective for the
period required by the Registration Agreement, then from the next
day following such time as the Shelf Registration Statement is no
longer effective until the earlier of (A) the date that the Shelf
Registration Statement is again deemed effective, (B) the date that
is the third anniversary of the Closing Date or (C) the date as of
which all of the Initial Debentures are sold pursuant to the Shelf
Registration Statement or may be sold without registration pursuant
to Rule 144 under the Securities Act of 1933, interest shall accrue
on the Initial Debentures (in addition to the stated interest on the
Initial Debentures) at a rate per annum equal to 0.25% of the
principal amount of the --- ----- Initial Debentures (determined
daily), it being understood that if the Registered Exchange Offer
shall have been consummated, no special interest shall be payable in
respect of any Initial Debentures.
(iv) Any additional interest that accrues with respect to the
<PAGE>
Initial Debentures as provided in this paragraph is referred to as
Special Interest. For all purposes of the Indenture, this
Supplemental Indenture and the Initial Debentures, Special Interest
shall be treated as interest and shall be payable on the same
Interest Payment Dates and to the Securityholders of record on the
same record dates as would be the case for stated interest.
SECTION 2.6
-----------
If at any time the holder of all Debentures of a series
ceases to be the Institutional Trustee and, at such time, the Capital
Securities issued by the Trust are rated by at least one nationally
recognized statistical rating agency, then the Company shall use its
best efforts to obtain from at least one nationally recognized
statistical rating agency a rating for the Debentures of such series.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1
-----------
If a Tax Event has occurred and is continuing and the
Company has received a Redemption Tax Opinion, then the Company shall
have the right, within 90 days following the occurrence of such Tax
Event (the "90 Day Period"), upon not less than 30 days nor more than
60 days notice, to redeem the Debentures held by the Institutional
Trustee, in whole or in part, for cash at a redemption price equal to
100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon to the date of such redemption (the "Tax Event
Redemption Price"), provided that if at the time there is available to
--------
the Company or the Trust the opportunity to eliminate, within the 90
Day Period and before any such notice is given, the adverse effects of
such Tax Event by taking some ministerial action ("Ministerial
Action"), such as filing a form or making an election or pursuing some
other similar reasonable measure that will have no adverse effect on
the Company, the Trust or the holders of the Trust Securities, the
Company or the Trust shall pursue such Ministerial Action in lieu of
redemption.
SECTION 3.2
-----------
Subject to the provisions of Article XIV of the Indenture,
and in addition to the rights set forth in Section 3.1 of this First
Supplemental Indenture, except as otherwise may be specified in this
First Supplemental Indenture, the Company shall have the right to
redeem the Debentures, in whole or in part, at
<PAGE>
any time and from time to time on or after January 15, 2007, at the
call prices (expressed as a percentage of principal amount per
Debenture being redeemed) specified below (each, a "Call Price"), plus
any accrued and unpaid interest thereon to the date of such
redemption:
If redeemed during
the 12-month period:
Beginning January 15, Call Price
2007 104.2790%
2008 103.8511
2009 103.4232
2010 102.9953
2011 102.5674
2012 102.1395
2013 101.7116
2014 101.2837
2015 100.8558
2016 100.4279
2017 100.0000
2018 100.0000
2019 100.0000
2020 100.0000
2021 100.0000
2022 100.0000
2023 100.0000
2024 100.0000
2025 100.0000
2026 100.0000
Any redemption pursuant to the preceding paragraph will be
made upon not less than 30 days nor more than 60 days notice to the
holder of the relevant Debentures, at the Call Price plus any accrued
and unpaid interest to the date of such redemption. If Debentures are
only partially redeemed pursuant to this Section 3.2, Debentures shall
be redeemed pro rata.
The Debentures are not entitled to the benefit of any
sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1
-----------
The Company shall have the right, subject to the conditions
set forth herein, to defer payments of interest on the
<PAGE>
Debentures of a series by extending the interest payment period on the
Debentures of a series at any time and from time to time during the
term of the Debentures, for up to 10 consecutive semiannual periods
(each such extended interest payment period, an "Extension Period"),
during which Extension Periods no interest shall be due and payable;
provided that (i) no Extension Period may extend beyond the Maturity
-------- ----
Date and (ii) no Extension Period may commence or be extended so long
as the Company is in default in the payment of any interest upon any
Debentures of such series or has not paid all Deferred Interest from a
prior completed Extension Period. At the termination of an Extension
Period for the Debentures of a series or, if not an Interest Payment
Date, on the Interest Payment Date immediately following termination
of such Extension Period for the Debentures of such series, the
Company shall pay all interest then accrued and unpaid on the
Debentures, together with interest thereon at the rate of 8.65% per
annum, compounded semiannually (to the extent permitted by applicable
law) ("Compounded Interest") and any Additional Interest (together
with Compounded Interest, "Deferred Interest"), which Deferred
Interest shall be payable to the holders of the Debentures of such
series in whose names the Debentures are registered in the Debt
Security Register on the record date for the payment of interest on
such Interest Payment Date. Before the termination of any Extension
Period, the Company may further extend such period, provided that such
period together with all such previous and further consecutive
extensions thereof shall not exceed 10 consecutive semiannual periods,
or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all Deferred Interest then
due, the Company may commence a new Extension Period, subject to the
foregoing requirements.
SECTION 4.2
-----------
(a) If the Institutional Trustee is the only registered holder of
the Debentures of a series at the time the Company initiates an Extension
Period, the Company shall give written notice to the Administrators, the
Institutional Trustee and the Trustee of its initiation of such Extension
Period one Business Day before the earlier of (i) the date on which
distributions on the Capital Securities of the corresponding series are
payable, or (ii) the date the Administrators are required to give notice to
holders of the Capital Securities of the corresponding series (or any
national securities exchange or other organization on which such Capital
Securities are listed, if any) of the record date or the distribution
payment date, in each case with respect to distributions on the Trust
Securities the payment of which is being deferred.
<PAGE>
(b) If the Institutional Trustee is not the only registered
holder of the Debentures of a series at the time the Company initiates an
Extension Period, the Company shall give the holders of the Debentures of
such series and the Trustee written notice of its initiation of such
Extension Period at least ten Business Days before the earlier of (i) the
next succeeding Interest Payment Date or (ii) the date the Company is
required to give notice to holders of the Debentures of such series (or any
national securities exchange or other organization on which the Capital
Securities of the corresponding series are listed, if any) of the record or
payment date of such interest, in each case with respect to interest
payments the payment of which is being deferred.
ARTICLE V
EXPENSES AND GUARANTEE
SECTION 5.1
-----------
In connection with the offering, sale and issuance of the
Debentures of a series and in connection with the sale of any Trust
Securities by the Trust, the Company, in its capacity as borrower with
respect to the Debentures of such series, shall:
(a)pay all costs and expenses relating to the offering, sale and
issuance of Debentures of such series, including commissions to the
underwriters payable pursuant to the Purchase Agreement and compensation of
the Trustee under the Indenture in accordance with the provisions of
Section 6.06 of the Indenture;
(b) pay all debts and other obligations (other than with respect
to the Trust Securities) and 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 Trust Securities (including
commissions to the underwriters in connection therewith), the fees and
expenses, if any, of the Institutional Trustee, the Delaware Trustee and
each Administrator, 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
of the Trust);
<PAGE>
(c) be primarily and fully liable for any indemnification
obligations arising with respect to the Declaration or the Purchase
Agreement or the Registration Agreement; and
(d) pay any and all taxes, duties, assessments or governmental
charges of whatever nature and all liabilities, costs and expenses with
respect thereto (other than United States withholding taxes attributable to
the Trust or assets of the Trust) to which the Trust may become subject.
SECTION 5.2
-----------
Upon termination of the Declaration or the removal or
resignation of the Delaware Trustee or the Institutional Trustee, as
the case may be, pursuant to Section 5.7 of the Declaration, the
Company shall pay to the Delaware Trustee or the Institutional
Trustee, as the case may be, all amounts owing to the Delaware Trustee
or the Institutional Trustee, as the case may be, under Sections 10.4
and 10.6 of the Declaration accrued to the date of such termination,
removal or resignation.
ARTICLE VI
FORM OF DEBENTURE
The Debentures and the Trustee s certificate of
authentication to be endorsed thereon are to be substantially in the
following forms and are expressly made a part of this First
Supplemental Indenture:
(FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT: 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 of this series registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Debenture may be
registered except in limited circumstances. Except as otherwise
provided in Section 2.11 of the Indenture, this Debenture may be
transferred, in whole but not in part, only to another nominee of the
Depositary or to a successor Depositary or to a nominee of such
successor Depositary.
Unless this Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street,
<PAGE>
New York, New York) to the issuer or its agent for registration of
transfer, exchange or payment, and any Debenture of this series issued
is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
[IF THIS DEBENTURE IS ONE OF A SERIES ORIGINALLY ISSUED
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT,
AS SPECIFIED PURSUANT TO SECTION 2.03 OF THE INDENTURE, INSERT THE
FOLLOWING UNLESS OTHERWISE DETERMINED BY THE COMPANY -- THIS DEBENTURE
HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER
THIS DEBENTURE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS DEBENTURE BY
ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
DEBENTURE PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH LEUCADIA
NATIONAL CORPORATION (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS DEBENTURE (OR ANY PREDECESSOR OF THIS DEBENTURE)
(THE "RESALE RESTRICTIONS TERMINATION DATE") ONLY (A) TO THE COMPANY,
(B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE DEBENTURES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"),
TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO
AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF
SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THE DEBENTURE FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR
(E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE
HOLDER OF THIS DEBENTURE AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS. DEBENTURES OWNED BY A PURCHASER THAT IS NOT A
<PAGE>
QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTIONS TERMINATION DATE.]
<PAGE>
No. _________________
LEUCADIA NATIONAL CORPORATION
8.65% JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURE DUE 2027
LEUCADIA NATIONAL CORPORATION, a New York corporation (the
Company, which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby
promises to pay to ____________ or registered assigns, the principal
sum of ________________ Dollars ($_________) on January 15, 2027, and
to pay interest on said principal sum from January 21, 1997, or from
the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided for,
semiannually (subject to deferral as set forth herein) in arrears on
July 15 and January 15 of each year commencing July 15, 1997, at the
rate of 8.65% per annum until the principal hereof shall have become
due and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum compounded semiannually. The
amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months. In
the event that any date on which interest is payable on this Debenture
is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
date. The interest installment so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the Person in whose name this Debenture (or
one or more Predecessor Securities, as defined in said Indenture) is
registered at the close of business on the Record Date for such
interest installment, [which shall be the close of business on the
Business Day next preceding such Interest Payment Date]. [IF PURSUANT
TO THE PROVISIONS OF THE INDENTURE THE DEBENTURES OF THIS SERIES ARE
NO LONGER REPRESENTED SOLELY BY A GLOBAL DEBENTURE, SUBSTITUTE THE
FOLLOWING FOR THE FOREGOING BRACKETED TEXT -- which shall be the close
of business on the 15th day next preceding such Interest Payment
Date.] Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered
holders on such Record Date and may be paid to the Person in whose
name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be
fixed by the Trustee for the payment of such defaulted
<PAGE>
interest, notice whereof shall be given to the registered holders of
this series of Debentures not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
the Debentures of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the
Indenture. In the event the Debentures of this series are issued in
non-book entry form, the principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of
the Trustee (or other paying agent appointed by the Company)
maintained for that purpose in any coin or currency of the United
States of America that at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment
-------- -------
of interest may be made at the option of the Company by check mailed
to the registered holder at such address as shall appear in the Debt
Security Register or by wire transfer to an account appropriately
designated by the holder hereof. Notwithstanding the foregoing, so
long as the holder of this Debenture is the Institutional Trustee, the
payment of the principal of (and premium, if any) and interest on this
Debenture will be made in immediately available funds at such place
and to such account as may be designated by the Institutional Trustee.
The indebtedness evidenced by this Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior Indebtedness, and
this Debenture is issued subject to the provisions of the Indenture
with respect thereto. Each holder of this Debenture, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate
the subordination so provided and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each holder hereof,
by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
If this Debenture is exchanged in a Registered Exchange
Offer prior to the Record Date for the first Interest Payment Date
following such exchange, accrued and unpaid interest, if any, on this
Debenture, up to but not including the date of issuance of the
Exchange Debenture or Exchange Debentures issued in exchange for this
Debenture, shall be paid on the first Interest Payment Date for such
Exchange Debenture or Exchange Debentures to the Securityholder or
Securityholders of such Exchange Debenture or Exchange Debentures on
the first Record
<PAGE>
Date with respect to such Exchange Debenture or Exchange Debentures.
If this Debenture is exchanged in a Registered Exchange Offer
subsequent to the Record Date for the first Interest Payment Date
following such exchange but on or prior to such Interest Payment Date,
then any such accrued and unpaid interest with respect to this
Debenture and any accrued and unpaid interest on the Exchange
Debenture or Exchange Debentures issued in exchange for this
Debenture, through the day before such Interest Payment Date, shall be
paid on such Interest Payment Date to the Securityholder of this
Debenture on such Record Date.
If any time the Trust shall be required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States or any other
taxing authority, then, in any such case, the Company shall pay as
additional interest on the Debentures held by the Institutional
Trustee such additional amounts as shall be required so that the net
amounts received and retained by the Trust after paying any such
taxes, duties, assessments or other governmental charges will equal
the amounts the Trust and the Institutional Trustee would have
received had no such taxes, duties, assessments or other governmental
charges been imposed. [IF THIS DEBENTURE IS AN INITIAL DEBENTURE
INSERT -- In addition, the interest rate payable on the Debentures of
this series is subject to increase as provided in the Indenture if,
pursuant to the Registration Agreement, except as provided in the
following paragraph, either (A) the Exchange Offer Registration
Statement (as such term is defined in the Registration Agreement) is
not filed with the Securities and Exchange Commission (the
"Commission") on or prior to the 120th day following the Closing Date
(as such term is defined in the Registration Agreement), (B) the
Exchange Offer Registration Statement is not declared effective by the
Commission on or prior to the 180th day following the Closing Date or
(C) the Registered Exchange Offer (as such term is defined in the
Registration Agreement) is not consummated or a Shelf Registration
Statement (as such term is defined in the Registration Agreement) is
not declared effective by the Commission on or prior to the 210th day
following the Closing Date.
In the event that on or after the 120th day following the
Closing Date applicable law or applicable interpretations of the staff
of the Commission do not permit the Company and the Trust to effect
the Registered Exchange Offer, or if a Tax Contingency exists (each, a
"Shelf Registration Event"), then clause (A) of the preceding
paragraph shall not apply. To the extent that such a Shelf
Registration Event exists and the Company has filed a Shelf
Registration Statement covering resales of the Initial Debentures by
the 180th day following the Closing
<PAGE>
Date, then clause (B) of the preceding paragraph shall not apply, and
to the extent a Shelf Registration Event exists on the 210th day
following the Closing ate, the period specified in clause (C) of the
preceding paragraph will be 240 days. The interest rate payable on
the Debentures of this series is also subject to adjustment in certain
circumstances if a Shelf Registration Statement filed pursuant to
Section 3(i) or Section 3(ii) of the Registration Agreement is not
kept continuously effective for a specified period, as provided in the
Indenture.]
This Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become obligatory
for any purpose until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee.
The provisions of this Debenture are continued on the
reverse side hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed this ______ day of _____________, ____.
LEUCADIA NATIONAL CORPORATION
By:
-----------------------------
Name:
Title:
[Seal]
By:
-----------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
------------------------------
This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated ________________
THE CHASE MANHATTAN BANK,
as Trustee
By:
-----------------------------
Authorized Officer
<PAGE>
(REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Debt
Securities of the Company, all issued or to be issued in one or more
series under and pursuant to an Indenture dated as of January 21,
1997, duly executed and delivered between the Company and The Chase
Manhattan Bank, as Trustee (the "Trustee"), as supplemented by the
First Supplemental Indenture dated as of January 21, 1997, between the
Company and the Trustee (the Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the series of Debt
Securities (referred to herein as the "Debentures") of which this
Debenture is a part. The summary of the terms of this Debenture
contained herein does not purport to be complete and is qualified by
reference to the Indenture. By the terms of the Indenture, the Debt
Securities are issuable in series that may vary as to amount, date of
maturity, rate of interest and in other respects as provided in the
Indenture. This series of Debentures is limited in aggregate
principal amount as specified in said First Supplemental Indenture.
Upon the occurrence and continuation of a Tax Event, in
certain circumstances, this Debenture may become due and payable, in
whole, or in part, at a redemption price equal to 100% of the
principal amount being redeemed together with any accrued and unpaid
interest thereon. The Company shall also have the right to redeem
this Debenture at the option of the Company, in whole or in part, at
any time or from time to time on or after January 15, 2007 (an
"Optional Redemption"), at the call price (the "Call Price")
(expressed as a percentage of the principal amount being redeemed)
specified below, plus accrued and unpaid interest to the redemption
date:
If redeemed during the
12-month period Call Price
commencing January 15,
2007 104.2790%
2008 103.8511
2009 103.4232
2010 102.9953
2011 102.5674
2012 102.1395
2013 101.7116
2014 101.2837
2015 100.8558
2016 100.4279
<PAGE>
If redeemed during the
12-month period Call Price
commencing January 15,
2017 100.0000
2018 100.0000
2019 100.0000
2020 100.0000
2021 100.0000
2022 100.0000
2023 100.0000
2024 100.0000
2025 100.0000
2026 100.0000
Any redemption pursuant to the preceding paragraph will be
made upon not less than 30 days nor more than 60 days notice, at a
redemption price equal to 100% of the principal amount being redeemed
or at the Call Price, as the case may be, plus any accrued and unpaid
interest to the date of such redemption. If the Debentures are only
partially redeemed by the Company, the Debentures will be redeemed pro
rata; provided that if, at the time of redemption, the Debentures are
registered as a Global Debenture, the Depositary shall determine the
principal amount of such Debentures held by each of its direct
participants to be redeemed pro rata.
In the event of redemption of this Debenture in part only, a
new Debenture or Debentures of this series for the unredeemed portion
hereof will be issued in the name of the holder hereof upon the
cancellation hereof.
In case an Event of Default, as defined in the Indenture,
shall have occurred and be continuing, the principal of all of the
Debentures may be declared due and payable, and upon such declaration
of acceleration shall become due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Debt Securities of any
series at the time outstanding affected thereby, as specified in the
Indenture, to execute supplemental indentures for the purpose of
adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or
of modifying in any manner the rights of the holders of the Debt
Securities; provided, however, that no such supplemental indenture
-------- -------
shall, among other things, without the consent of the holders of each
Debt Security then outstanding and affected thereby (i) extend
<PAGE>
the fixed maturity of any Debt Securities of any series, or reduce the
principal amount thereof or any redemption premium thereon, or reduce
the rate or extend the time of payment of interest thereon, or make
the principal of, or interest or premium on, the Debt Securities
payable in any coin or currency other than that provided in the Debt
Securities, or impair or affect the right of any holder of Debt
Securities to institute suit for the payment thereof, or (ii) reduce
the aforesaid percentage of Debt Securities, the holders of which are
required to consent to any such supplemental indenture. The Indenture
also contains provisions permitting the holders of a majority in
aggregate principal amount of the Debt Securities of a series at the
time outstanding affected thereby as provided in the Indenture, on
behalf of all of the holders of the Debt Securities of such series, to
waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture
with respect to such series, and its consequences, except a default in
the payment of the principal of or premium, if any, or interest on any
of the Debt Securities of such series. Any such consent or waiver by
the registered holder of this Debenture (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such holder and
upon all future holders and owners of this Debenture and of any
Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not
any notation of such consent or waiver is made upon this 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 on this Debenture
at the time and place and at the rate and in the money herein
prescribed.
The Company shall have the right at any time during the term
of the Debentures and from time to time, subject to certain
conditions, to defer payment of interest on the Debentures of a series
by extending the interest payment period for Extension Periods, each
not exceeding 10 consecutive semiannual periods as provided in the
Indenture. Notwithstanding the foregoing, no Extension Period may
extend beyond the maturity date of the Debentures. In the event that
the Company exercises its right to extend an interest payment period,
then during any Extension Period (a) the Company shall not declare or
pay any dividends on, make any distribution with respect to, or
redeem, purchase, acquire, or make a liquidation payment with respect
to, any of its capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of any such
capital stock or rights to acquire such capital stock in connection
with
<PAGE>
the satisfaction by the Company of its obligations under any employee
benefit plans or any other contractual obligations of the Company
(other than a contractual obligation ranking pari passu with or junior
to the Debentures), (ii) as a result of a reclassification of the
Company s capital stock or rights to acquire such capital stock or the
exchange or conversion of one class or series of the Company s capital
stock or rights to acquire such capital stock for another class or
series of the Company s capital stock or rights to acquire such
capital stock, (iii) the purchase of fractional interests in shares of
the Company s capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or
exchanged, (iv) dividends and distributions made on the Company s
capital stock or rights to acquire such capital stock with the
Company s capital stock or rights to acquire such capital stock, or
(v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto), or make guarantee payments with
respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or
junior to the Debentures (other than payments under the Capital
Securities Guarantee or the Common Securities Guarantee for the Trust)
and (b) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company that rank pari passu with or junior
to the Debentures. Prior to the termination of any such Extension
Period, the Company may further defer payments of interest by
extending the interest payment period; provided, however, that each
-------- -------
such Extension Period, including all such previous and further
extensions thereof, may not exceed 10 consecutive semiannual periods
or extend beyond the maturity of the Debentures. Upon the termination
of any Extension Period and the payment of all amounts then due, the
Company may commence a new Extension Period, subject to the terms set
forth in the Indenture. No interest during an Extension Period,
except on the date on which such Extension Period terminates (or if
such date is not an Interest Payment Date, on the immediately
following Interest Payment Date), shall be due and payable.
As provided in the Indenture and subject to certain
limitations herein and therein set forth, this Debenture is
transferable by the registered holder hereof on the Debt Security
Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee in the
City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered holder hereof or his attorney
duly authorized in writing, and thereupon
<PAGE>
one or more new Debentures of authorized denominations and for the
same aggregate principal amount and series will be issued to the
designated transferee or transferees. No service charge will be made
for any such registration of transfer, but the Company may require
payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
Prior to due presentment for registration of transfer of
this Debenture, the Company, the Trustee, any Authenticating Agent,
any paying agent, any transfer agent and the Debt Security registrar
may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Debenture shall be overdue and
notwithstanding any notice of ownership or writing hereon) for the
purpose of receiving payment of or on account of the principal hereof
and premium, if any, and interest due hereon and for all other
purposes, and neither the Company nor the Trustee nor any
Authenticating Agent nor any paying agent nor any transfer agent nor
any Debt Security registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal
of, the premium, if any, on or the interest on this Debenture, or for
any claim based hereon, or otherwise in respect hereof, or based on or
in respect of the Indenture, against any incorporator, stockholder,
officer or director, past, present or future, as such, of the Company
or of any predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.
The Debentures of this series are issuable only in
registered form without coupons. A Global Debenture is exchangeable
for Debentures in definitive form only under certain limited
circumstances set forth in the Indenture. As provided in the
Indenture and subject to certain limitations herein and therein set
forth, Debentures of this series are exchangeable for a like aggregate
principal amount of Debentures of this series of a different
authorized denomination, as requested by the holder surrendering the
same.
[IF THIS DEBENTURE IS AN INITIAL DEBENTURE INSERT -- The
Debentures of this series are issuable only in minimum denominations
of $100,000 and any integral multiple of $1,000 in excess thereof.
The Debentures of this series may be transferred only in blocks having
an aggregate principal amount of not less than $100,000. Any transfer
of Debentures of this series in a block having an aggregate principal
amount of less than $100,000 shall be deemed to be void and of no
legal effect whatsoever.
<PAGE>
Any transferee of Debentures of this series having an aggregate
principal amount of less than $100,000 shall be deemed not to be the
holder of such Debentures for any purpose, including, but not limited
to, the receipt of payments on such Debentures, and such transferee
shall be deemed to have no interest whatsoever in such Debentures.]
All terms used in this Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INDENTURE AND THE DEBENTURES, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1
-----------
The Indenture, as supplemented by this First Supplemental Indenture,
is in all respects ratified and confirmed, and this First Supplemental
Indenture shall be deemed part of the Indenture in the manner and to
the extent herein and therein provided.
SECTION 7.2
-----------
The recitals herein contained are made by the Company and
not by the Trustee, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this First Supplemental Indenture.
SECTION 7.3
-----------
This First Supplemental Indenture and each Debenture shall
be deemed to be a contract made under the internal laws of the State
of New York, and for all purposes shall be construed in accordance
with the laws of said State without regard to conflict of laws
principles thereof.
SECTION 7.4
-----------
In case any one or more of the provisions contained in this
First Supplemental Indenture or in a series of Debentures shall for
any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not
affect any other provisions of this
<PAGE>
First Supplemental Indenture or of such series of the Debentures, but
this First Supplemental Indenture and such series of the Debentures
shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
This First Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
First Supplemental Indenture to be duly executed, and their respective
corporate seals to be hereunto affixed and attested, as of the day and
year first above written.
LEUCADIA NATIONAL CORPORATION
By: /s/ Barbara Lowenthal
----------------------------
Name: Barbara Lowenthal
Title: Vice President
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ Patricia Kelly
-----------------------------
Name: Patricia Kelly
Title: Vice President
NYFS04...:\30\76830\0146\1197\IND1297X.030
EXHIBIT 4.4
CERTIFICATE OF TRUST
OF
LEUCADIA CAPITAL TRUST I
THIS Certificate of Trust of Leucadia Capital Trust I (the
"Trust"), dated as of January 10, 1997, 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
----
Leucadia Capital Trust I.
2. Delaware Trustee. The name and business address of the
----------------
trustee of the Trust with a principal place of business in the State
of Delaware are Chase Manhattan Bank Delaware, 1201 Market Street,
Wilmington, Delaware 19801.
3. Effective Date. This Certificate of Trust shall be
--------------
effective upon filing.
IN WITNESS WHEREOF, the undersigned, being the trustee of
the Trust, has executed this Certificate of Trust as of the date
first-above written.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely as
trustee of the Trust
By:/s/ John J. Cashin
--------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
NYFS04...:\30\76830\0146\1197\EXH1317P.520
EXHIBIT 4.7
CAPITAL SECURITIES GUARANTEE AGREEMENT
Leucadia Capital Trust I
Dated as of January 21, 1997
<PAGE>
CROSS-REFERENCE TABLE*
----------------------
Section of Trust Indenture Section of Capital
Act of 1939, as amended Securities Guarantee
Agreement
310(a).....................................................4.1(a)
310(b).....................................................4.1(c)
310(c)..............................................Inapplicable
311(a).....................................................2.2(a)
311(b).....................................................2.2(b)
311(c)..............................................Inapplicable
312(a).....................................................2.2(a)
312(b).....................................................2.2(b)
312(c).....................................................2.2(c)
313........................................................2.3
314(a).....................................................2.4
314(b)...............................................Inapplicable
314(c).....................................................2.5
314(d)...............................................Inapplicable
314(e).....................................................2.5
314(f)...............................................Inapplicable
315(a).....................................................3.1(b)
315(b).....................................................2.7
315(c).....................................................3.1(c)
315(d).....................................................3.1(d)
316(a).............................................5.4(a), 2.6
318(a).....................................................2.1(c)
_____________
* This Cross-Reference Table does not constitute part of this
Guarantee Agreement and shall not affect the interpretation of any of
its terms or provisions.
<PAGE>
TABLE OF CONTENTS
-----------------
Page
CROSS-REFERENCE TABLE . . . . . . . . . . . . . . . . . . . . . . . i
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . 6
SECTION 2.3 Reports by the Guarantee Trustee . . . . . . . . . . . 6
SECTION 2.4 Periodic Reports to Guarantee Trustee . . . . . . . . 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . 7
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . 7
SECTION 2.7 Events of Default; Notice . . . . . . . . . . . . . . 7
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee . . . . . . 8
SECTION 3.2 Certain Rights of Guarantee Trustee . . . . . . . . . 10
SECTION 3.3 Not Responsible for Recitals or Issuance of
Capital Securities Guarantee . . . . . . . . . . . . . 13
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility . . . . . . . . . . . . 13
SECTION 4.2 Appointment, Removal and Resignation of
Guarantee Trustee . . . . . . . . . . . . . . . . . . 14
ARTICLE V
GUARANTEE
SECTION 5.1 Capital Securities Guarantee . . . . . . . . . . . . . 15
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . 15
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . 15
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . 16
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . 17
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . 18
<PAGE>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . 18
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . 20
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . 20
SECTION 8.3 Compensation; Reimbursement of Expenses . . . . . . . 21
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . 21
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . . 23
<PAGE>
GUARANTEE AGREEMENT
-------------------
This GUARANTEE AGREEMENT (the "Capital Securities
Guarantee"), dated as of January 21, 1997, is executed and delivered
by Leucadia National Corporation, a New York corporation (the
"Guarantor"), and The Chase Manhattan Bank, a New York banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Capital
Securities (as defined herein) of Leucadia Capital Trust I, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of January 21, 1997, among the
trustees named therein of the Issuer, Leucadia National Corporation,
as sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the
date hereof securities, having an aggregate liquidation amount of up
to $150,000,000, designated the 8.65% Capital Trust Pass-through
SecuritiesSM (the "Initial Capital Securities") and may issue in the
future, pursuant to the Registration Rights Agreement (as defined in
the Declaration) securities solely to be exchanged for Initial Capital
Securities, with terms that are substantially identical to those of
the Initial Capital Securities (the "Exchange Capital Securities" and
together with the Initial Capital Securities, the "Capital
Securities");
WHEREAS, as incentive for the Holders to purchase the
Capital Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this Capital
Securities Guarantee, to pay to the Holders of Capital 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 Capital Securities Guarantee for
the benefit of the holders of the Common Securities (as defined in the
Declaration) of the Issuer, except that if a Declaration Event of
Default (as defined herein), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the
rights of Holders of the Capital Securities to receive Guarantee
Payments under this Capital Securities Guarantee.
<PAGE>
NOW, THEREFORE, in consideration of the purchase by each
Holder of the Capital Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Capital Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
-------------------------------------------
In this Capital Securities Guarantee, unless the context
otherwise requires:
(a) capitalized terms used in this Capital Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Capital Securities
Guarantee has the same meaning throughout;
(c) all references to the Capital Securities Guarantee or
this Capital Securities Guarantee are to this Capital
Securities Guarantee as modified, supplemented or amended from
time to time;
(d) all references in this Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Capital Securities Guarantee, unless otherwise specified;
(e) terms defined in the Declaration as at the date of
execution of this Capital Securities Guarantee or in the Trust
Indenture Act, as the case may be, have the same meanings when
used in this Capital Securities Guarantee, unless otherwise
defined in this Capital Securities Guarantee or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Corporate Trust Office" means 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 450 West 33rd Street, 15th Floor, New York, New York 10001.
<PAGE>
"Covered Person" means any Holder of Capital Securities.
"Debentures" means the junior subordinated debentures of the
Leucadia National Corporation designated the 8.65% Junior Subordinated
Deferrable Interest Debentures due 2027, held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.
"Declaration Event of Default" means an "Event of Default"
as defined in the Declaration.
"Event of Default" has the meaning set forth in Section 2.6.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by the Issuer: (i) any
accrued and unpaid Distributions (as defined in the Declaration) which
are required to be paid on such Capital Securities to the extent the
Issuer shall have funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price") to the extent the Issuer has funds
available therefor, with respect to any Capital Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to the
Holders of the Capital Securities in exchange therefor as provided in
the Declaration), the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid Distributions on the Capital
Securities to the date of payment, to the extent the Issuer shall have
funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantees" means the Common Securities Guarantee and this
Capital Securities Guarantee, collectively.
"Guarantee Trustee" means The Chase Manhattan Bank, a New
York banking corporation, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of
this Capital Securities Guarantee and thereafter means each such
Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books
and records of the Issuer, of any Capital Securities; provided,
--------
however, that, in determining whether the holders of
-------
<PAGE>
the requisite percentage of Capital Securities have given any request,
notice, consent or waiver hereunder, Holder shall not include the
Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, 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 January 21,
1997, between the Guarantor and The Chase Manhattan Bank, not in its
individual capacity but solely as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued
to the Institutional Trustee of the Issuer.
"Liquidation Distribution" has the meaning set forth in the
definition of Guarantee Payments herein.
"Majority in liquidation amount of the Capital Securities"
means Holder(s) of outstanding Capital Securities, voting together as
a class, but separately from the holders of Common Securities, of more
than 50% of the aggregate liquidation amount of all Capital Securities
then outstanding.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any
Officer's Certificate delivered with respect to compliance with a
condition or covenant provided for in this Capital Securities
Guarantee 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 such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion
as to whether or not such covenant or condition has been complied
with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
<PAGE>
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the
Guarantee Trustee with direct responsibility for the administration of
this Capital Securities Guarantee and also means, with respect to a
particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor 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.
"Trust Securities" means the Common Securities and the
Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
---------------------------------------------
(a) This Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that would be required to
be part of this Capital Securities Guarantee if this Capital
Securities Guarantee were qualified under the Trust Indenture Act
and shall, to the extent applicable, be governed by such
provisions;
(b) This Capital Securities Guarantee will be qualified
under the Trust Indenture Act upon effectiveness of a
Registration Statement with respect to this Capital Securities
Guarantee; and
(c) If and to the extent that any provision of this Capital
Securities Guarantee limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
<PAGE>
SECTION 2.2 Lists of Holders of Securities
-------------------------------------------
(a) The Guarantor shall provide the Guarantee Trustee (i)
within 14 days after each record date for payment of
Distributions, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of
the Capital Securities ("List of Holders") as of such record
date, provided that the Guarantor shall not be obligated to
provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the
Guarantee Trustee by the Guarantor, and (ii) at any other time
within 30 days of receipt by the Guarantor of a written request
for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Guarantee Trustee. The
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 Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
(c) The Guarantor, the Issuer, the Guarantee Trustee and
anyone else shall have the protection of Section 312(c) of the
Trust Indenture Act.
SECTION 2.3 Reports by the Guarantee Trustee
---------------------------------------------
Within 60 days after May 15 of each year, the Guarantee
Trustee shall provide to the Holders of the Capital Securities such
reports as are required by Section 313(a) 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 Sections 313(b), 313(c) and 313(d) of the Trust
Indenture Act. The Guarantor will notify the Guarantee Trustee if and
when any Capital Securities are listed on any stock exchange.
SECTION 2.4 Periodic Reports to Guarantee Trustee
--------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such
documents, reports and information (if any) as required by Section 314
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, provided that such compliance
certificate shall be delivered on or before 120 days after the end of
the fiscal year of the Guarantor.
<PAGE>
SECTION 2.5 Evidence of Compliance with Conditions Precedent
-------------------------------------------------------------
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with any conditions precedent provided for in
this Capital Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act may be given in the form
of an Officer's Certificate.
SECTION 2.6 Events of Default; Waiver
--------------------------------------
(a) An Event of Default under this Capital Securities
Guarantee will occur upon the failure of the Guarantor to perform any
of its payment or other obligations hereunder; provided, however,
-------- -------
that, other than with respect to a default on any payment under this
Capital Securities Guarantee, the Guarantor shall have received notice
of default and shall not have cured such default within 90 days after
receipt of such notice.
(b) The Holders of a Majority in liquidation amount of
Capital Securities may, voting or consenting as a class, on behalf of
the Holders of all of the Capital Securities, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and shall be deemed to have been cured,
for every purpose of this Capital Securities Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.7 Events of Default; Notice
--------------------------------------
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default known to a Responsible Officer
of the Guarantee Trustee, transmit by mail, first class postage
prepaid, to the Holders of the Capital Securities, notices of all
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, however, that the Guarantee
-------- -------
Trustee shall be 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 of the Capital Securities.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee
<PAGE>
Trustee shall have received written notice from the Guarantor or
a Holder of the Capital Securities (except in the case of a
payment default), or a Responsible Officer of the Guarantee
Trustee charged with the administration of this Capital
Securities Guarantee shall have obtained actual knowledge,
thereof.
SECTION 2.8 Conflicting Interests
----------------------------------
The Indenture, the Debt Securities (as defined therein)
issued or to be issued thereunder, the Declaration, the Trust
Securities issued or to be issued thereunder and the Capital
Securities Guarantee and Common Securities Guarantee in connection
therewith shall be deemed to be specifically described in this Capital
Securities Guarantee for the purposes of clause (i) of the proviso
contained in Section 310(b)(1) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Guarantee Trustee
-------------------------------------------------------
(a) This Capital Securities Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the Capital
Securities, and the Guarantee Trustee shall not transfer this
Capital Securities Guarantee to any Person except a Holder of
Capital Securities exercising his or her rights pursuant to
Section 5.4(b) 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, 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 Capital Securities
Guarantee for the benefit of the Holders of the Capital
Securities.
(c) In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Guarantee
<PAGE>
Trustee, the Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Capital Securities Guarantee, and
use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Capital Securities Guarantee 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:
(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 Capital Securities Guarantee, and
the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Capital Securities
Guarantee, and no implied covenants or obligations
shall be read into this Capital Securities Guarantee
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 Capital Securities Guarantee; but in the case of
any such certificates or opinions furnished to the
Guarantee Trustee, the Guarantee Trustee shall be under
a duty to examine the same to determine whether or not
they conform to the requirements of this Capital
Securities Guarantee;
(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 such Responsible Officer of the Guarantee Trustee or
the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
<PAGE>
(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 amount of the
Capital 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 Capital
Securities Guarantee; and
(iv) no provision of this Capital Securities Guarantee
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 is not reasonably assured to it under the terms
of this Capital Securities Guarantee or indemnity,
reasonably satisfactory to the Guarantee Trustee, against
such risk or liability is not reasonably assured to it.
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, 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 Capital Securities Guarantee shall be
sufficiently evidenced by an Officer's Certificate.
(iii) Whenever, in the administration of this Capital
Securities Guarantee, the Guarantee Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting 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
<PAGE>
conclusively rely upon an Officer's Certificate which, upon
receipt of such request, shall be delivered by the Guarantor
as soon as practicable.
(iv) The Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument
(or any rerecording, refiling or registration thereof).
(v) The Guarantee Trustee may consult with counsel of
its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning
the administration of this Guarantee from any court of
competent jurisdiction.
(vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Capital Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee 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 or custodians) and liabilities that might be
incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by
the Guarantee Trustee; provided, however, that nothing
-------- -------
contained in this Section 3.2(a)(vi) 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 Capital Securities
Guarantee.
(vii) The Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its
discretion, may make such
<PAGE>
further inquiry or investigation into such facts or matters
as it may see fit.
(viii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees,
custodians or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders of the Capital
Securities, and the signature of the Guarantee Trustee or
its agents alone shall be sufficient and effective to
perform any such action. No third party shall be required
to inquire as to the authority of the Guarantee Trustee to
so act or as to its compliance with any of the terms and
provisions of this Capital Securities Guarantee, both of
which shall be conclusively evidenced by the Guarantee
Trustee s or its agent s taking such action.
(x) Whenever in the administration of this Capital
Securities Guarantee 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 (i) may request instructions from the
Holders of a Majority in liquidation amount of the Capital
Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(xi) The Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good
faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it
by this Capital Securities Guarantee.
(b) No provision of this Capital Securities Guarantee 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
<PAGE>
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 Capital
----------------------------------------------------------------
Securities Guarantee
--------------------
The recitals contained in this Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Guarantee
Trustee does not assume any responsibility for their correctness. The
Guarantee Trustee makes no representation as to the validity or
sufficiency of this Capital Securities Guarantee.
ARTICLE IV
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 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
Person permitted by the Securities and Exchange Commission
to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the 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).
<PAGE>
(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 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 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
except during an Event of Default.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) 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 to office 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 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 of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed may
petition 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 to act of any Successor Guarantee Trustee.
(f) Upon termination of this Capital Securities Guarantee
or removal or resignation of the Guarantee Trustee pursuant to
this Section 4.2, the Guarantor shall pay to the Guarantee
Trustee all amounts owing to the Guarantee Trustee
<PAGE>
under Sections 8.2 and 8.3 accrued to the date of such
termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Capital Securities Guarantee
-----------------------------------------
(a) The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due,
regardless of any defense (except the defense of payment by the
Issuer), right of set-off or counterclaim that the Issuer may have or
assert. Such obligations will not be discharged except by payment of
the Guarantee Payments in full. The Guarantor s obligation to make a
Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to
pay such amounts to the Holders.
(b) The obligations of Guarantor under Section 5.1(a) shall
not apply except to the extent the Issuer has funds available for the
payment of Distributions.
SECTION 5.2 Waiver of Notice and Demand
----------------------------------------
The Guarantor hereby waives notice of acceptance of this
Capital Securities Guarantee and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a
proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3 Obligations Not Affected
-------------------------------------
The obligations, covenants, agreements and duties of the
Guarantor under this Capital Securities Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition
relating to the Capital Securities to be performed or observed by
the Issuer;
<PAGE>
(b) the extension of time for the payment by the Issuer of
all or any portion of the Distributions, Redemption Price,
Liquidation Distribution or any other sums payable under the
terms of the Capital Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Capital Securities (other than an extension
of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from
the extension of any interest payment period on the Debentures or
any extension of the maturity date of the Debentures permitted by
the Indenture);
(c) any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to
the terms of the Capital Securities, or any action on the part of
the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice
to, or obtain consent of, the Guarantor with respect to the happening
of any of the foregoing.
SECTION 5.4 Rights of Holders
------------------------------
(a) The Holders of a Majority in liquidation amount of the
Capital Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy
<PAGE>
available to the Guarantee Trustee in respect of this Capital
Securities Guarantee or to direct the exercise or exercising of
any trust or power conferred upon the Guarantee Trustee under
this Capital Securities Guarantee; provided however, that
-------- -------
(subject to Section 3.1) the Guarantee Trustee shall have the
right to decline to follow any such direction if the Guarantee
Trustee shall determine that the actions so directed would be
unjustly prejudicial to the Holders not taking part in such
direction or if the Guarantee Trustee being advised by counsel
determines that the action or proceeding so directed may not
lawfully be taken or if the Guarantor Trustee in good faith by
its board of directors or trustees, executive committees or a
trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so
directed would involve the Guarantee Trustee in personal
liability.
(b) Any Holder of Capital Securities may institute a legal
proceeding directly against the Guarantor to enforce the
Guarantee Trustee s rights under this Capital Securities
Guarantee, without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee or any other Person. The
Guarantor waives any right or remedy to require that any such
action be brought first against the Issuer or any other Person
before so proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
---------------------------------
This Capital Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
-----------------------
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Capital Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Capital
Securities Guarantee; provided, however, that the Guarantor shall not
-------- -------
(except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any right that it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in
all cases as a result of payment under this Capital Securities
Guarantee, if, after giving effect to any such payment, any amounts
are due and unpaid under this Capital Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding
<PAGE>
sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
------------------------------------
The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Issuer with respect to the
Capital Securities and that the Guarantor shall be liable as principal
and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Capital Securities Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g),
inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
---------------------------------------
So long as any Capital Securities remain outstanding, if (i)
the Guarantor shall be in default with respect to its Guarantee
Payments or other obligations hereunder or (ii) there shall have
occurred and be continuing an Event of Default or a Declaration Event
of Default, then (a) the Guarantor shall not declare or pay any
dividend on, make any distributions with respect to, or redeem,
purchase, or make a liquidation payment with respect to, any of the
Guarantor s capital stock or rights to acquire such capital stock
(other than (i) purchases or acquisitions of shares of the Guarantor s
capital stock or rights to acquire such capital stock in connection
with the satisfaction by the Guarantor of its obligations under any
employee benefit plans or any other contractual obligations of the
Guarantor (other than a contractual obligation ranking pari passu with
---- -----
or junior to the Debentures), (ii) as a result of a reclassification
of the Guarantor s capital stock or rights to acquire such capital
stock or the exchange or conversion of one class or series of the
Guarantor s capital stock or rights to acquire such capital stock for
another class or series of the Guarantor s capital stock or rights to
acquire any such stock, (iii) the purchase of fractional interests in
shares of the Guarantor s capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being
converted or exchanged, (iv) dividends and distributions made on the
Guarantor s capital stock or rights to acquire such capital stock with
the Guarantor s capital stock or rights to acquire such capital stock,
or (v) any declaration of a dividend in connection with the
implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto), or
<PAGE>
make guarantee payments with respect to any guarantee by the Company
of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior to the Debentures (other
---- -----
than payments under the Guarantees) and (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or
repay, repurchase or redeem any debt securities issued by the
Guarantor which rank pari passu with or junior to the Debentures.
---- -----
SECTION 6.2 Ranking
--------------------
This Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank subordinate and
junior in right of payment to all present and future Senior
Indebtedness (as defined in the Indenture) of the Guarantor. By their
acceptance thereof, each Holder of Capital Securities agrees to the
foregoing provisions of this Capital Securities Guarantee and the
other terms set forth herein.
The right of the Guarantor to participate in any
distribution of assets of any of its subsidiaries upon any such
subsidiary s liquidation or reorganization or otherwise is subject to
the prior claims of creditors of that subsidiary, except to the extent
the Guarantor may itself be recognized as a creditor of that
subsidiary. Accordingly, the Guarantor s obligations under this
Capital Securities Guarantee will be effectively subordinated to all
existing and future liabilities of the Guarantor s subsidiaries, and
claimants should look only to the assets of the Guarantor for payments
thereunder. This Capital Securities Guarantee does not limit the
incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any
indenture that the Guarantor may enter into in the future or
otherwise.
If a Declaration Event of Default has occurred and is
continuing, the rights of holders of the Common Securities of the
Issuer to receive payments under the Common Securities Guarantee are
subordinated to the rights of Holders of Capital Securities to receive
Guarantee Payments.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
------------------------
This Capital Securities Guarantee shall terminate as to the
Capital Securities (i) upon full payment of the Redemption
<PAGE>
Price of all Capital Securities, (ii) upon the distribution of the
Debentures to the Holders of all of the Capital Securities or (iii)
upon full payment of the amounts payable in accordance with the
Declaration upon dissolution of the Issuer. This Capital Securities
Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Capital Securities must
restore payment of any sums paid under the Capital Securities or under
this Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
-----------------------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Capital Securities
Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on
such Indemnified Person by this Capital Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified
Person s negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Issuer or the
Guarantor and upon such information, opinions, reports or
statements presented to the Issuer or 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, if selected by such Indemnified Person, has been selected
with reasonable care by such Indemnified Person, 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 Capital Securities might properly be
paid.
SECTION 8.2 Indemnification
----------------------------
The Guarantor agrees to indemnify each Indemnified Person
for, and to hold each Indemnified Person harmless against,
<PAGE>
any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 8.2 shall survive
the resignation or removal of the Guarantee Trustee and the
termination of this Capital Securities Guarantee.
SECTION 8.3 Compensation; Reimbursement of Expenses
---------------------------------------------------
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time
reasonable compensation for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by it in
accordance with any provision of this Capital Securities Guarantee
(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.
The provisions of this Section 8.3 shall survive the
resignation or removal of the Guarantee Trustee and the termination of
this Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
----------------------------------
All guarantees and agreements contained in this Capital
Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Capital Securities then outstanding.
Except in connection with any merger or consolidation of the Guarantor
with or into another entity or any sale, transfer or lease of the
Guarantor s assets to another entity, in each case, to the extent
permitted under the Indenture, the Guarantor may not assign its rights
or
<PAGE>
delegate its obligations under this Capital Securities Guarantee
without the prior approval of the Holders of at least a Majority in
liquidation amount of the Capital Securities.
SECTION 9.2 Amendments
-----------------------
Except with respect to any changes that do not adversely
affect the rights of Holders of the Capital Securities in any material
respect (in which case no consent of Holders will be required), this
Capital Securities Guarantee may be amended only with the prior
approval of the Holders of not less than a Majority in liquidation
amount of the Capital Securities. The provisions of the Declaration
with respect to amendments thereof apply to the giving of such
approval.
SECTION 9.3 Notices
-------------------
All notices provided for in this Capital Securities
Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by first class
mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee
Trustee s mailing address set forth below (or such other address
as the Guarantee Trustee may give notice of to the Holders of the
Capital Securities):
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Corporate Trustee Administration Department
Telecopy: (212) 946-8159 or 8160
(b) If given to the Guarantor, at the Guarantor s mailing
address set forth below (or such other address as the Guarantor
may give notice of to the Holders of the Capital Securities and
to the Guarantee Trustee):
Leucadia National Corporation
315 Park Avenue South
New York, NY 10010
Attention: Corporate Secretary
Telecopy: (212) 460-1900
(c) If given to any Holder of the Capital Securities, at
the address set forth on the books and records of the Issuer.
<PAGE>
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid except that if a notice or other
document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other
document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 9.4 Benefit
-------------------
This Capital Securities Guarantee is solely for the benefit
of the Guarantee Trustee and the Holders of the Capital Securities
and, subject to Section 3.1(a), is not separately transferable from
the Capital Securities.
SECTION 9.5 Governing Law
-------------------------
THIS CAPITAL SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
<PAGE>
THIS CAPITAL SECURITIES GUARANTEE is executed as of the day
and year first above written.
LEUCADIA NATIONAL CORPORATION,
as Guarantor
By: /s/ Barbara Lowenthal
-------------------------------
Name: Barbara Lowenthal
Title: Vice President
THE CHASE MANHATTAN BANK,
as Guarantee Trustee
By: /s/ Patricia Kelly
-------------------------------
Name: Patricia Kelly
Title: Vice President
NYFS04...:\30\76830\0146\1197\AGR1297V.270
EXHIBIT 4.8
LEUCADIA CAPITAL TRUST I
$150,000,000 8.65% CAPITAL TRUST PASS-THROUGH SECURITIES(SM) (TRUPS(SM))
FULLY AND UNCONDITIONALLY GUARANTEED AS TO DISTRIBUTIONS
AND OTHER PAYMENTS BY
LEUCADIA NATIONAL CORPORATION
REGISTRATION RIGHTS AGREEMENT
-----------------------------
New York, New York
January 21, 1997
Salomon Brothers Inc
As Representative of the several Initial Purchasers
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Leucadia Capital Trust I (the "Trust"), a statutory
business trust formed under the laws of the state of Delaware by
Leucadia National Corporation (the "Company"), proposes to issue
and sell to the Initial Purchasers (the "Initial Purchasers")
named in the Purchase Agreement of even date herewith (the
"Purchase Agreement"), for whom you are acting as representative
(the "Representative"), the 8.65% Capital Trust Pass-through
Securities (the "Capital Securities") of the Trust. The issue
and sale of the Capital Securities pursuant to the Purchase
Agreement is referred to herein as the "Initial Placement." The
Capital Securities, together with the guarantee of the Company
with respect thereto (the "Guarantee") and the 8.65% Junior
Subordinated Deferrable Interest Debentures due 2027 of the
Company (the "Subordinated Debt Securities"), are collectively
referred to herein as the "Registrable 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 Company and the Trust
agree with you, (i) for your benefit and the benefit of the other
Initial Purchasers and (ii) for the benefit of the holders from
time to
<PAGE>
time of the Registrable Securities and the Exchange Securities
(as defined below), including the Initial Purchasers (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without
-----------
definition shall have their respective meanings set forth in the
Purchase Agreement. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended, and
---
the rules and regulations of the Commission 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.
"Capital Securities" has the meaning set forth in the
------------------
preamble hereto.
"Closing Date" has the meaning set forth in the
------------
Purchase Agreement.
"Commission" means the Securities and Exchange
----------
Commission.
"Company" has the meaning set forth in the preamble
-------
hereto.
"DTC" means the Depository Trust Company.
---
"Exchange Act" means the Securities Exchange Act of
------------
1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Exchange Offer Prospectus" means the Prospectus
-------------------------
contained in the Exchange Offer Registration Statement, as it may
be amended or supplemented from time to time.
"Exchange Offer Registration Period" means the 1-year
----------------------------------
period following the consummation of the Registered Exchange
Offer, exclusive of any period during which any stop order shall
be in effect suspending the effectiveness of the Exchange Offer
Registration Statement or during which Exchanging Dealers have
been advised to suspend use of the Exchange Offer Prospectus in
accordance with Section 4(l) hereof, which 1-year period shall
<PAGE>
be extended by the aggregate number of days during which any such
stop order or suspension is in effect.
"Exchange Offer Registration Statement" means a
-------------------------------------
registration statement of the Company and the Trust on an
appropriate form under the Act with respect to the Registered
Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in
each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference
therein.
"Exchange Securities" means the securities of the
-------------------
Company and the Trust issued pursuant to a Registered Exchange
Offer in the same aggregate principal amount or in the same
number or liquidation amount, as the case may be, and containing
terms that are identical in all material respects to the terms of
the Registrable Securities except (i) the Exchange Securities
shall have been registered for sale under the Act to Holders and
(ii) the interest rate step-up provisions and the transfer
restrictions in the Registrable Securities will be modified or
eliminated, as appropriate, in the Exchange Securities.
"Exchanging Dealer" means any Holder (which may include
-----------------
the Initial Purchasers) which is a broker-dealer registered under
Section 15 of the Exchange Act electing to exchange Registrable
Securities, acquired for its own account as a result of market-
making activities or other trading activities, for Exchange
Securities.
"Final Offering Memorandum" means the final Offering
-------------------------
Memorandum issued in connection with the Initial Placement and
dated as of January 13, 1997 relating to the Registrable
Securities.
"Guarantee" has the meaning set forth in the preamble
---------
hereto.
"Holder" has the meaning set forth in the preamble
------
hereto.
"Initial Placement" has the meaning set forth in the
-----------------
preamble hereto.
"Initial Purchasers" has the meaning set forth in the
------------------
preamble hereto.
"Interest Payment Date" has the meaning set forth in
---------------------
Section 3(c) hereof.
"Managing Underwriters" means the investment banker or
---------------------
investment bankers and manager or managers that shall administer
an underwritten offering.
<PAGE>
"Prospectus" means the prospectus included in any
----------
Registration Statement (including, without limitation, a
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), as amended or
supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Registrable
Securities or the Exchange Securities, covered by such
Registration Statement, and all amendments and supplements to the
Prospectus, including post-effective amendments.
"Purchase Agreement" has the meaning set forth in the
------------------
preamble hereto.
"Registered Exchange Offer" means the offer to the
-------------------------
Holders to issue and deliver to such Holders, in exchange for the
Registrable Securities, a like principal amount, stated
liquidation preference or number, as the case may be, of the
Exchange Securities.
"Registrable Securities" has the meaning set forth in
----------------------
the preamble hereto.
"Registration Statement" means any Exchange Offer
----------------------
Registration Statement or Shelf Registration Statement that
covers any of the Registrable Securities or the Exchange
Securities pursuant to the provisions of this Agreement,
amendments and supplements to such registration statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Representative" has the meaning set forth in the
--------------
preamble hereto.
"Shelf Registration" means a registration effected
------------------
pursuant to Section 3 hereof.
"Shelf Registration Event" has the meaning set forth in
------------------------
Section 2(g) hereof.
"Shelf Registration Period" has the meaning set forth
-------------------------
in Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf"
----------------------------
registration statement of the Company and the Trust pursuant to
the provisions of Section 3 hereof which covers some or all of
the Registrable Securities or Exchange Securities, as applicable,
on an appropriate form under Rule 415 under the Act, or any
similar rule that may be adopted by the Commission, amendments
and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material
incorporated by reference therein.
<PAGE>
"Special Payment" has the meaning set forth in Section
---------------
3(c) hereof.
"Subordinated Debt Securities" has the meaning set
----------------------------
forth in the preamble hereto.
"Tax Contingency" has the meaning set forth in Section
---------------
2(g) hereof.
"Trust" has the meaning set forth in the preamble
-----
hereto.
"underwriter" means any underwriter of Registrable
-----------
Securities or Exchange Securities in connection with an offering
thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of Exchange
----------------------------------------------
Securities by Exchanging Dealers; Private Exchange. (a) Except
--------------------------------------------------
as otherwise provided herein, the Company and the Trust shall
prepare and, not later than 120 days following the Closing Date,
shall file with the Commission the Exchange Offer Registration
Statement with respect to the Registered Exchange Offer. The
Company and the Trust shall use their best efforts to cause the
Exchange Offer Registration Statement be declared effective under
the Act within 180 days of the Closing Date. The Company and the
Trust shall use their best efforts to consummate the Registered
Exchange Offer within 210 days of the Closing Date.
(b) Promptly after the Exchange Offer Registration
Statement is declared effective, the Company and the Trust shall
commence the Registered Exchange Offer, it being the objective of
such Registered Exchange Offer to enable each Holder electing to
exchange Registrable Securities for Exchange Securities (assuming
that such Holder is not an affiliate of the Company within the
meaning of the Act, acquires the Exchange Securities in the
ordinary course of such Holder's business and has no arrangements
with any person to participate in a public distribution (within
the meaning of the Act) of the Exchange Securities) to trade such
Exchange Securities from and after their receipt without any
limitations or restrictions under the Act and without material
restrictions under the securities laws of a substantial
proportion of the several states of the United States.
(c) In connection with the Registered Exchange Offer,
the Company and the Trust shall:
(i) mail to each Holder a copy of the Prospectus
forming part of the Exchange Offer Registration
Statement, together with an appropriate letter of
transmittal and related documents;
<PAGE>
(ii) keep the Registered Exchange Offer open for
not less than 30 days (or longer if required by
applicable law) after the date notice thereof is mailed
to the Holders;
(iii) utilize the services of a depositary for the
Registered Exchange Offer with an address in the
Borough of Manhattan, The City of New York; and
(iv) comply in all respects with all applicable
laws.
(d) As soon as practicable after the close of the
Registered Exchange Offer, the Company and the Trust shall:
(i) accept for exchange and cancel all
Registrable Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer;
and
(ii) issue Exchange Securities to each Holder in a
principal amount, stated liquidation preference or
number, as the case may be, equal to the Registrable
Securities accepted for exchange and canceled pursuant
to the Registered Exchange Offer.
(e) The Company, the Trust and the Initial Purchasers
on behalf of the Holders hereby acknowledge that, in order to
effect a Registered Exchange Offer, (i) the Company will be
required to issue new subordinated debt securities to the Trust
in exchange for a like principal amount of Subordinated Debt
Securities and (ii) the Trust will be required to issue new
capital securities in exchange for a like amount of stated
liquidation preference of Capital Securities. The parties hereto
acknowledge that the Guarantee by its express terms covers the
Exchange Securities corresponding to the Capital Securities as
well as such Capital Securities. The parties hereto further
acknowledge that the new subordinated debt securities, capital
securities and guarantee issuable as described in this paragraph,
which collectively constitute the Exchange Securities, shall be
identical in all material respects to the securities they
replace, except that (x) such Exchange Securities shall be
registered for sale under the Act to Holders and (y) the interest
rate step-up provisions and the transfer restrictions in the
securities being replaced by the Exchange Securities will be
eliminated in the Exchange Securities.
(f) The Initial Purchasers, the Company and the Trust
acknowledge that, pursuant to current interpretations by the
staff of the Commission of Section 5 of the Act,
<PAGE>
and in the absence of an applicable exemption therefrom, each
Exchanging Dealer may be deemed an "underwriter" within the
meaning of the Act and, therefore, is required to deliver a
Prospectus in connection with any resales of any Exchange
Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer in exchange for Registrable Securities
acquired for its own account as a result of market-making
activities or other trading activities. Accordingly, the Company
and the Trust shall:
(i) include the information set forth in Annex A
hereto on the cover of the Prospectus forming a part of
the Exchange Offer Registration Statement, in Annex B
hereto in the forepart of the Prospectus forming a part
of the Exchange Offer Registration Statement in a
section setting forth details of the Exchange Offer,
and in Annex C hereto in the underwriting or plan of
distribution section of the Prospectus forming a part
of the Exchange Offer Registration Statement, and such
other information with respect to resales of the
Exchange Securities by Exchanging Dealers that the
Commission may require in connection therewith and
include the information set forth in Annex D hereto in
the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; and
(ii) use their best efforts to keep the Exchange
Offer Registration Statement continuously effective
under the Act during the Exchange Offer Registration
Period for delivery by Exchanging Dealers in connection
with sales of Exchange Securities received pursuant to
the Registered Exchange Offer, as contemplated by
Section 4(i) below.
(g) In the event that applicable law or applicable
interpretations of the staff of the Commission do not permit the
Company and the Trust to effect the Registered Exchange Offer ,
or if the Company shall determine in good faith that there is a
reasonable likelihood that, or a material uncertainty exists as
to whether, consummation of the Registered Exchange Offer would
result in an adverse tax consequence to the Company (a "Tax
Contingency" and together with the foregoing, each a "Shelf
Registration Event"), the Company and the Trust may elect, in
lieu of the commencement of such Registered Exchange Offer, to
effect a Shelf Registration of the Registrable Securities
pursuant to Section 3 hereof.
3. Shelf Registration. (i) In the event of Shelf
------------------
Registration Event, (ii) if for any other reason the Exchange
Offer Registration Statement is not declared effective by the
Commission within 180 days of the Closing Date, (iii) if any
Initial Purchaser so requests with respect to Registrable
Securities held by it following consummation of the Registered
<PAGE>
Exchange Offer that are not "freely tradable" Exchange
Securities, (iv) if any Holder that is a broker-dealer, is not an
affiliate of the Company or the Trust and is not eligible to
participate in the Registered Exchange Offer so requests with
respect to Registrable Securities held by it following the
consummation of the Registered Exchange Offer that are not
"freely tradable" Exchange Securities (it being understood that,
for purposes of this Section 3, (x) the requirement that an
Initial Purchaser deliver a Prospectus containing the information
required by Items 507 and/or 508 of Regulation S-K under the Act
in connection with sales of Exchange Securities acquired in
exchange for such Registrable Securities shall result in such
Exchange Securities being not "freely tradable" but (y) the
requirement that an Exchanging Dealer deliver a Prospectus in
connection with sales of Exchange Securities acquired in the
Registered Exchange Offer in exchange for Registrable Securities
acquired as a result of market-making activities or other trading
activities shall not result in such Exchange Securities being not
"freely tradable"), the following provisions shall apply:
(a) The Company and the Trust shall, as promptly as
practicable, file with the Commission the Shelf Registration
Statement covering resales of the Registrable Securities or the
Exchange Securities, as applicable, by the Holders from time to
time in accordance with the methods of distribution elected by
such Holders and set forth in such Shelf Registration Statement,
and use their best efforts to cause the Shelf Registration
Statement to be declared effective under the Act by the 210th day
(or, if a Shelf Registration Event exists on the 210th day
following the Closing Date, by the 240th day) after the Closing
Date (or promptly in the event of a request by an Initial
Purchaser); provided, that with respect to Exchange Securities
--------
received by an Initial Purchaser in exchange for Registrable
Securities constituting any portion of an unsold allotment, the
Company and the Trust may, if permitted by current
interpretations by the Commission's staff, file a post-effective
amendment to the Exchange Offer Registration Statement containing
the information required by Regulation S-K Items 507 and/or 508,
as applicable, in satisfaction of their obligations under this
paragraph (a) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to
herein as, and governed by the provisions herein applicable to, a
Shelf Registration Statement; and provided further, that with
-------- -------
respect to a Shelf Registration Statement required pursuant to
clause (ii) of the preceding paragraph, the consummation of a
Registered Exchange Offer shall relieve the Company and the Trust
of their obligations under this Section 3(a) but only in respect
of their obligations under such clause (ii).
(b) The Company and the Trust shall each use its best
efforts to keep effective the Shelf Registration Statement until
three years after the Closing Date, or, if Rule 144(k) under the
Act is amended to provide a shorter restrictive period, such
shorter period (or until one year (plus the aggregate number of
days during which any stop order is in effect in respect of such
Shelf Registration Statement or during which use of the relevant
prospectus
<PAGE>
has been suspended pursuant to Section 4(l) hereof) after its
effective date if such Shelf Registration Statement is filed at
the request of an Initial Purchaser) or such shorter period that
will terminate when all the Registrable Securities or Exchange
Securities, as applicable, covered by such Shelf Registration
Statement have been sold pursuant thereto (in any such case, such
period being called the "Shelf Registration Period").
Furthermore, the Company and the Trust shall each use its best
efforts, upon the effectiveness of the Shelf Registration
Statement, to promptly upon the request of any Holder to take any
action reasonably necessary to register the sale of any
Registrable Securities or Exchange Securities of such Holder and
compliance by such Holder with the terms hereof and to identify
such Holder as a selling securityholder, provided that such
Holder provides the Company with all information reasonably
necessary to effect such registration. The Company and the Trust
shall be deemed not to have used their best efforts to keep the
Shelf Registration Statement effective during the requisite
period if either the Company or the Trust voluntarily takes any
action that would result in Holders of securities covered thereby
not being able to offer and sell such securities during that
period, unless (i) such action is required by applicable law, or
(ii) such action is taken by the Company in good faith and for
valid business reasons (not including avoidance of the Company's
obligations hereunder), including the acquisition or divestiture
of assets, so long as the Company promptly thereafter complies
with the requirements of Section 4(l) hereof, if applicable.
(c) Except as described below, in the event that either
(a) the Exchange Offer Registration Statement is not filed with
the Commission on or prior to the 120th day following the Closing
Date, (b) the Exchange Offer Registration Statement is not
declared effective on or prior to the 180th day following the
Closing Date or (c) the Exchange Offer is not consummated or a
Shelf Registration Statement with respect to the Registrable
Securities is not declared effective on or prior to the 210th day
following the Closing Date, interest will accrue (in addition to
the stated interest on the Registrable Securities) from and
including the next day following each of (i) such 120-day period
in the case of clause (a) above, (ii) such 180-day period in the
case of clause (b) above, and (iii) such 210-day period in the
case of clause (c) above. In each case such additional interest
(the "Special Payment") will be payable in cash semiannually in
arrears on each January 15 and July 15, (each an "Interest
Payment Date"), at a rate per annum equal to 0.25% of the
principal amount or liquidation amount, as applicable, of the
Registrable Securities. The aggregate amount of Special Payment
payable pursuant to the above provisions will in no event exceed
0.25% per annum of the principal amount or the liquidation
amount, as applicable, of the Registrable Securities.
(d) If a Shelf Registration Event shall exist on or
before the 120th day following the Closing Date, then clauses (a)
and (i) of the preceding paragraph shall not
<PAGE>
apply. To the extent that such a Shelf Registration Event exists
and the Company has filed a Shelf Registration Statement covering
resales of the Registrable Securities by the 180th day following
the Closing Date, then clauses (b) and (ii) of the preceding
paragraph shall not apply, and to the extent a Shelf Registration
Event exists on the 210th day following the Closing Date, the
period specified in clauses (c) and (iii) of the preceding
paragraph will be 240 days. Upon (x) the filing of the Exchange
Offer Registration Statement or the occurrence of a Shelf
Registration Event, if applicable, as described above, after the
120-day period described in clause (a) of the preceding
paragraph, (y) the effectiveness of the Exchange Offer
Registration Statement (if applicable) (or the filing of a Shelf
Registration Statement, in the event of a Shelf Registration
Event, if applicable, as described above) after the 180-day
period described in clause (b) of the preceding paragraph or (z)
the consummation of the Exchange Offer or the effectiveness of a
Shelf Registration Statement after the 210-day period described
in clause (c) of the preceding paragraph (or the effectiveness of
a Shelf Registration Statement after the 240-day period specified
above, in the event of a Shelf Registration Event, if applicable,
as described above), the Special Payment payable on the
Registrable Securities from the date of such filing,
effectiveness or consummation, as the case may be, will cease to
accrue and all accrued and unpaid Special Payments as of the
occurrence of (x), (y) or (z) shall be paid to the holders of the
Registrable Securities on the next interest payment date.
(e) In the event that a Shelf Registration Statement is
declared effective hereunder, if the Company or the Trust fails
to keep such Shelf Registration Statement continuously effective
for the period required hereby, then from the next day following
such time as the Shelf Registration Statement is no longer
effective until the earlier of (i) the date that the Shelf
Registration Statement is again deemed effective, (ii) the date
that is the third anniversary of the date of the original
issuance of the Registrable Securities or (iii) the date as of
which all of the Registrable Securities covered by the Shelf
Registration Statement are sold pursuant thereto or may sold
without registration pursuant to Rule 144 under the Securities
Act, Special Payments shall accrue at a rate per annum equal to
0.25% of the principal amount or liquidation amount, as
applicable, of the Registrable Securities and shall be payable in
cash, semiannually in arrears on each Interest Payment Date; it
being understood that after the Registered Exchange Offer has
been consummated, no Special Payments shall accrue in respect of
Registrable Securities, without prejudice to any other claim that
any Holder may have for any failure by the Company to obtain or
maintain continuous effectiveness of the Exchange Offer
Registration Statement or a Shelf Registration Statement in
accordance with the terms of this Agreement.
<PAGE>
4. Registration Procedures. In connection with any
-----------------------
Shelf Registration Statement and, to the extent applicable, any
Exchange Offer Registration Statement, the following provisions
shall apply:
(a) The Company and the Trust shall furnish to the
Initial Purchasers, prior to the filing thereof with the
Commission, a copy of any Registration Statement, and each
amendment thereof and each amendment or supplement, if any, to
the Prospectus included therein and shall use their best efforts
to reflect in each such document, when so filed with the
Commission, such comments as the Initial Purchasers reasonably
may propose.
(b) The Company and the Trust shall ensure that (i) any
Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement
thereto (and each document incorporated therein by reference)
complies in all material respects with the Act and the Exchange
Act and the respective rules and regulations thereunder, (ii) any
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) any Prospectus forming part of any
Registration Statement, and any amendment or supplement to such
Prospectus, does not as of the date thereof include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
(c) (1) The Company and the Trust shall advise the
Initial Purchasers and, in the case of a Shelf Registration
Statement, the Holders of securities covered thereby, and, if
requested by the Initial Purchasers or any such Holder, confirm
such advice in writing:
(i) when the Registration Statement and any
amendment thereto has been filed with the Commission
and when the Registration Statement or any post-
effective amendment thereto has become effective; and
(ii) of any request by the Commission for
amendments or supplements to the Registration Statement
or the Prospectus included therein or for additional
information.
(2) The Company and the Trust shall advise the Initial
Purchasers and, in the case of a Shelf Registration Statement,
the Holders of securities covered thereby, and, in the case of an
Exchange Offer Registration Statement, any Exchanging Dealer that
has provided in writing to the Company a telephone or facsimile
number and address for notices, and, if
<PAGE>
requested by the Initial Purchasers or any such Holder or
Exchanging Dealer, confirm such advice in writing of:
(i) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that
purpose;
(ii) the receipt by the Company or the Trust of
any notification with respect to the suspension of the
qualification of the securities included therein for
sale in any jurisdiction or the initiation or overtly
threatening of any proceeding for such purpose;
(iii) the happening of any event that requires the
making of any changes in the Registration Statement or
the Prospectus so that, as of such date, the statements
therein are not misleading 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); and
(iv) the Company's or the Trust's determination
that a post-effective amendment to a Registration
Statement would be appropriate.
(d) The Company and the Trust shall use their best
efforts to prevent the issuance, and if issued to obtain the
withdrawal, of any order suspending the effectiveness of any
Registration Statement at the earliest possible time.
(e) On or prior to the time that an Exchange Offer
Registration Statement or Shelf Registration Statement is first
effective under the Securities Act, the Company shall use its
reasonable best efforts to cause the Capital Securities or
Exchange Securities corresponding to such Capital Securities,
respectively, to be duly authorized for listing, subject in the
case of an Exchange Offer Registration Statement to official
notice of issuance, on the New York Stock Exchange as a fixed
income security (or, if such listing is unavailable, as an equity
security) and thereafter shall use its reasonable best efforts to
maintain such listing; or, in the alternative, the Company shall
have taken such action satisfactory to the Initial Purchasers as
to have caused the Capital Securities or Exchange Securities
corresponding to such Capital Securities, respectively, to be
freely tradable to the
<PAGE>
same extent as if duly authorized for listing on the New York
Stock Exchange as described above.
(f) The Company and the Trust shall furnish to each
Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, at least one copy of such
Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if
the Holder so requests in writing, all exhibits filed therewith
(including those incorporated by reference).
(g) The Company and the Trust shall, during the Shelf
Registration Period, deliver to each Holder of securities
included within the coverage of any Shelf Registration Statement,
without charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company and the Trust each
consent to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of securities
in connection with the offering and sale of the securities
covered by the Prospectus or any amendment or supplement thereto.
(h) The Company and the Trust shall furnish to each
Exchanging Dealer that so requests, without charge, at least one
copy of the Exchange Offer Registration Statement and any post-
effective amendment thereto, including financial statements and
schedules, any documents incorporated by reference therein, and,
if the Exchanging Dealer so requests in writing, all exhibits
filed therewith (including those incorporated by reference).
(i) The Company and the Trust shall, during the
Exchange Offer Registration Period, promptly deliver to each
Exchanging Dealer, without charge, as many copies of the final
Prospectus included in such Exchange Offer Registration Statement
and any amendment or supplement thereto as such Exchanging Dealer
may reasonably request for delivery by such Exchanging Dealer in
connection with a sale of Exchange Securities received by it
pursuant to the Registered Exchange Offer; and the Company and
the Trust each consent, subject to the provisions hereof, to the
use of the Prospectus or any amendment or supplement thereto by
any such Exchanging Dealer, as aforesaid.
(j) Prior to the Registered Exchange Offer or any other
offering of securities pursuant to any Registration Statement,
the Company and the Trust shall register or qualify or cooperate
with the Holders of securities included therein and their
respective counsel in connection with the registration or
qualification of such securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such
Holders reasonably request in writing and do any and all other
acts or things necessary or advisable to enable the offer and
<PAGE>
sale in such jurisdictions of the securities covered by such
Registration Statement; provided, however, that in no event shall
-------- -------
the Company or the Trust be required to qualify to do business in
any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so
subject.
(k) The Company and the Trust shall cooperate with the
Holders of Registrable Securities or Exchange Securities, as the
case may be, to facilitate the timely preparation and delivery
within the times required by normal-way settlement of
certificates representing securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in
such denominations and registered in such names as Holders may
request prior to sales of securities pursuant to such
Registration Statement.
(l) If (a) Shelf Registration is filed pursuant to
Section 3 hereof, or (b) a Prospectus contained in the Exchange
Offer Registration Statement filed pursuant to Section 2 hereof
is required to be delivered under the Act by any Exchanging
Dealer who seeks to sell Registrable Securities or Exchange
Securities during the Shelf Offer Registration Period or the
Exchange Offer Registration Period, as the case may be, upon the
occurrence of any event contemplated by paragraph 4(c)(2)(iii) or
4(c)(2)(iv) hereof, the Company and the Trust as promptly as
practicable, prepare and file with the Commission, at the sole
expense of the Company, a supplement or post-effective amendment
to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be
incorporated therein by reference, or file any other required
document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder or to the
purchasers of the Exchange Securities to whom such Prospectus
will be delivered by an Exchanging Dealer, any such Prospectus
will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Notwithstanding the foregoing, the Company shall not be required
to amend or supplement a Registration Statement, any related
prospectus or any document incorporated therein by reference in
the event that, and for a period not to exceed 90 days (or an
aggregate of 120 days in any 18-month period) if (x) an event
occurs and is continuing as a result of which a Registration
Statement, any related prospectus or any document incorporated
therein by reference as then amended or supplemented would, in
the Company's good faith judgment, contain an untrue statement of
a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (y)
the disclosure relates to a material pending financing,
acquisition, divestiture or corporate reorganization transaction
involving the Company or any of its subsidiaries which has not
yet been publicly disclosed and the
<PAGE>
Company determines in good faith that the disclosure of such
event at such time would have a material adverse effect on the
business, operations or prospects of the Company.
(m) Not later than the effective date of any such
Registration Statement hereunder, the Company and the Trust shall
provide a CUSIP number for the Capital Securities or the Exchange
Securities corresponding to the Capital Securities, as the case
may be, registered under such Registration Statement. In the
event of and at the time of any distribution of the Subordinated
Debt Securities to Holders, the Company and the Trust shall
provide a CUSIP number for the Subordinated Debt Securities or
the Exchange Securities corresponding to the Subordinated Debt
Securities and provide the applicable trustee with certificates
for such securities, in a form eligible for deposit with DTC.
The Company and the Trust shall use their reasonable best efforts
to cause the CUSIP Service Bureau to issue the same CUSIP number
for all Exchange Securities or Registrable Securities, as the
case may be, delivered pursuant to a Registration Statement as
was originally issued for the Registrable Securities.
(n) The Company and the Trust shall use their best
efforts to comply with all applicable rules and regulations of
the Commission to the extent and so long as they are applicable
to the Registered Exchange Offer, the Exchange Offer Registration
Statement or the Shelf Registration and shall make generally
available to their security holders as soon as practicable after
the effective date of the applicable Registration Statement an
earnings statement satisfying the provisions of Section 11(a) of
the Act.
(o) The Company and the Trust shall cause the indenture
relating to the Subordinated Debt Securities, the Capital
Securities Guarantee and the declaration of trust of the Trust
pursuant to which the terms of the Capital Securities are
established, or any corresponding documents in respect of the
Exchange Securities, as the case may be, to be qualified under
the Trust Indenture Act in a timely manner.
(p) The Company and the Trust may require each Holder
of securities to be sold pursuant to any Shelf Registration
Statement to furnish to the Company and the Trust such
information regarding the Holder and the distribution of such
securities as the Company and the Trust may from time to time
reasonably require for inclusion in such Registration Statement.
The Company and the Trust may require each such Holder to provide
to the Company and the Trust an undertaking confirming the
Holder's obligations to the Company and the Trust pursuant to
this Section 4(p) and Section 6(b) hereof and the Holder's
obligations to the Company and the Trust referred to in Annex D
hereto.
<PAGE>
(q) In the case of any Shelf Registration Statement,
the Company and the Trust shall enter into such customary
agreements (including, if requested, an underwriting agreement in
customary form (including, without limitation, indemnification
provisions)) and take all other appropriate actions, if any, in
order to facilitate the registration or the disposition of the
Registrable Securities or the Exchange Securities, as the case
may be, to be registered thereunder.
(r) In the case of any underwritten offering under a
Shelf Registration Statement or at the request of an Initial
Purchaser to the extent that an Initial Purchaser has Registrable
Securities or Exchange Securities eligible for resale thereunder,
the Company and the Trust shall (i) make reasonably available for
inspection by a representative of the Holders of a majority of
the securities to be registered thereunder, any Initial Purchaser
(if applicable) and any underwriter participating in any
disposition pursuant to such Registration Statement, and any
attorney, accountant or other agent retained by any such Holders,
Initial Purchaser or underwriter all relevant financial and other
records, pertinent corporate documents and properties of the
Company, its subsidiaries and the Trust; (ii) cause the Company's
officers, directors and employees and the trustees of the Trust
to supply all relevant information reasonably requested by the
representative of the Holders, the Initial Purchaser (if
applicable) or any such underwriter, attorney, accountant or
agent in connection with any such Registration Statement as is
customary for similar due diligence examinations; provided,
--------
however, that the foregoing inspection and information gathering
-------
shall be coordinated on behalf of the parties by one counsel
designated by and on behalf of Holders representing a majority of
the principal or liquidation amount of the Registrable Securities
included therein and reasonably satisfactory to the Company; and
further provided that any information that is designated in
------- --------
writing by the Company and the Trust, in good faith, as
confidential at the time of delivery of such information shall be
kept confidential by the Holders, the Initial Purchaser (if
applicable) or any such underwriter, attorney, accountant or
agent, unless such disclosure is made in connection with a court
proceeding or required by law, or such information becomes
available to the public generally or through a third party
without an accompanying obligation of confidentiality; (iii) make
such customary representations and warranties to the Holders of
securities registered thereunder, the Initial Purchaser (if
applicable) and the underwriters, if any, in form, substance and
scope as are customarily made; (iv) obtain opinions of counsel to
the Company and the Trust in customary form and scope addressed
to each selling Holder, Initial Purchaser (if applicable) and the
underwriters, if any; (v) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants
of the Company, addressed to each selling Holder of securities
registered thereunder, the Initial Purchaser (if applicable) and
the underwriters, if any, in customary form and scope; and (vi)
deliver such documents and certificates as may be reasonably
requested by any such Holders, the Initial Purchaser (if
applicable) or the
<PAGE>
Managing Underwriters, if any. In any registration in which the
Registrable Securities or Exchange Securities are sold to an
underwriter for reoffering to the public, the investment
banker(s) and manager(s) shall be selected by the Holders of a
majority in aggregate principal amount of the Registrable
Securities or Exchange Securities that will be included in such
sale; provided, however, that if other than an Initial Purchaser,
-------- -------
such investment banker(s) and/or manager(s) shall be reasonably
satisfactory to the Company.
5. Registration Expenses. The Company shall bear all
---------------------
expenses incurred in connection with the performance of its
obligations under Sections 2, 3 and 4 hereof and, in the event of
any Shelf Registration Statement, will reimburse the Holders for
the reasonable fees and disbursements of one firm of counsel
designated by the majority of the Holders of the Registrable
Securities or Exchange Securities, as the case may be, covered by
such Shelf Registration Statement to act as counsel for the
Holders in connection therewith, which counsel shall be
reasonably satisfactory to the Company and, in the case of any
Exchange Offer Registration Statement, will reimburse the Initial
Purchasers for the reasonable fees and disbursements of one
counsel acting in connection therewith.
6. Indemnification and Contribution. (a) In connection
--------------------------------
with any Registration Statement, the Company agrees to indemnify
and hold harmless the Trust, each Holder of securities covered
thereby (including each Initial Purchaser and, with respect to
any Prospectus delivery as contemplated in Section 4(i) hereof,
each Exchanging Dealer), the directors, officers, employees and
agents of each such Holder and each person who controls any such
Holder within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under
the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (including all documents incorporated by
referenced therein) as originally filed or in any amendment
thereof, or in any preliminary prospectus or Prospectus, or in
any amendment thereof 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 agrees to
reimburse each such indemnified party, as incurred, for any
reasonable legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company
-------- -------
will not be liable in any case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf
of any such
<PAGE>
Holder specifically for inclusion therein; further, provided,
------- --------
that this indemnity agreement with respect to any untrue
statement or omission in any preliminary Prospectus shall not
inure to the benefit of any indemnified party (or to the benefit
of any person controlling such indemnified party) from whom the
person asserting any such loss, expense, liability or claim
purchased the Registrable Securities or Exchangeable Securities,
as the case may be, which is the subject thereof, if the
Prospectus corrected any such alleged untrue statement or
omission and if such indemnified party failed to send or give a
copy of the Prospectus, excluding any documents incorporated by
reference, to such person at or prior to the written confirmation
of the sale of Registrable Securities or Exchange Securities, as
the case may be, so long as the Company has complied with its
obligations to deliver any amended Prospectus as required by
Section 3(l). This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
The Company also agrees to indemnify or contribute to
Losses (as defined herein) of, as provided in Section 6(d), any
underwriters of Securities registered under a Shelf Registration
Statement, their officers and directors and each person who
controls such underwriters on substantially the same basis as
that of the indemnification of the Initial Purchasers and the
selling Holders provided in this Section 6(a) and shall, if
requested by any Holder, enter into an underwriting agreement
reflecting such agreement, as provided in Section 4(q) hereof.
(b) Each Holder of securities covered by a Registration
Statement (including each Initial Purchaser and, with respect to
any Prospectus delivery as contemplated in Section 4(i) hereof,
each Exchanging Dealer) severally agrees to indemnify and hold
harmless the Company, the Trust, each of their directors,
trustees, administrators, officers and each person who controls
the Company or the Trust within the meaning of either the Act or
the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each such Holder, but only with reference to
written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion
in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which
any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party
under this Section 6 or notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 6,
notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent the indemnifying party did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and
<PAGE>
defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at
the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the
-------- -------
indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in
an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying
party shall bear the reasonable fees, costs and expenses of one
such separate counsel (in addition to local counsel) designated
by the indemnified parties if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual
or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available
to the indemnifying party, (iii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after
notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit
or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 6 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall have a joint and
several obligation to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which such indemnified party may
be subject in such proportion as is appropriate to reflect the
relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the
Initial Placement and the Registration Statement which resulted
in such Losses; provided, however, that in no case shall any
-------- -------
Initial Purchaser or any subsequent Holder of
<PAGE>
any Registrable Security or Exchange Security be responsible, in
the aggregate, for any amount in excess of the purchase discount
or commission applicable to such security, or in the case of an
Exchange Security, applicable to the Registrable Security which
was exchangeable into such Exchange Security, as set forth on the
cover page of the Final Offering Memorandum, nor shall any
underwriter be responsible for any amount in excess of the
underwriting discount or commission applicable to the securities
purchased by such underwriter under the Registration Statement
which resulted in such Losses. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in
such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such
indemnifying party, on the one hand, and such indemnified party,
on the other hand, in connection with the statements or omissions
which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company shall
be deemed to be equal to the sum of (x) the total net proceeds
from the Initial Placement (before deducting expenses) as set
forth on the cover page of the Final Offering Memorandum and
(y) the total amount of additional interest which the Company was
not required to pay as a result of registering the securities
covered by the Registration Statement which resulted in such
Losses. Benefits received by the Initial Purchasers shall be
deemed to be equal to the total purchase discounts and
commissions as set forth on the cover page of the Final Offering
Memorandum, and benefits received by any other Holders shall be
deemed to be equal to the value of receiving Registrable
Securities or Exchange Securities, as applicable, registered
under the Act. Benefits received by any underwriter shall be
deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus
forming a part of the Registration Statement which resulted in
such Losses. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to
information provided by the indemnifying party, on the one hand,
or by the indemnified party, on the other hand. The parties
agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of
this Section 6, each person who controls a Holder within the
meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who
controls the Company and the Trust within the meaning of either
the Act or the Exchange Act, each officer of the Company or
trustee of the Trust who shall have signed the Registration
Statement and each director of the Company or trustee of the
Trust shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of
this paragraph (d).
<PAGE>
(e) The provisions of this Section 6 will remain in
full force and effect, regardless of any investigation made by or
on behalf of any Holder or the Company or any of the officers,
directors or controlling persons referred to in Section 6 hereof,
and will survive the sale by a Holder of securities covered by a
Registration Statement.
7. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company and the
Trust have not, as of the date hereof, entered into, nor shall
they, on or after the date hereof, enter into, any agreement with
respect to their securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the
provisions hereof.
(b) Amendments and Waivers. The provisions of this
----------------------
Agreement, including the provisions of this sentence, may not be
amended, qualified, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be
given, unless the Company and the Trust have obtained the written
consent of the Holders of at least a majority in liquidation
amount of the Capital Securities then outstanding (or, after the
consummation of any Exchange Offer in accordance with Section 2
hereof, of Exchange Securities then outstanding); provided that,
--------
with respect to any matter that directly or indirectly affects
the rights of any Initial Purchaser hereunder, the Company shall
obtain the written consent of each such Initial Purchaser against
which such amendment, qualification, supplement, waiver or
consent is to be effective. Notwithstanding the foregoing
(except the foregoing proviso), a waiver or consent to departure
from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose securities are being
sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be
given by the majority of such affected Holders, determined on
the basis of securities being sold rather than registered under
such Registration Statement.
(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 the most current address
given by such Holder to the Company;
(ii) if to the Initial Purchasers, initially at
the respective addresses set forth in the Purchase
Agreement; and
<PAGE>
(iii) if to the Company or the Trust, initially at
their addresses set forth in the Purchase Agreement.
All such notices and communications shall be deemed to
have been duly given when received. The Initial Purchasers, the
Company or the Trust by notice to the others may designate
additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure
----------------------
to the benefit of and be binding upon the successors and assigns
of each of the parties, including, without the need for an
express assignment or any consent by the Company and the Trust
thereto, subsequent Holders of Registrable Securities and/or
Exchange Securities. The Company and the Trust hereby agree to
extend the benefits of this Agreement to any Holder of
Registrable Securities and/or Exchange Securities and any such
Holder may specifically enforce the provisions of this Agreement
as if an original party hereto.
(e) Counterparts. This agreement may be executed in
------------
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(f) Headings. The headings in this agreement are for
--------
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) Governing Law. This agreement shall be governed by
-------------
and construed in accordance with the internal laws of the State
of New York applicable to agreements made and to be performed in
said State.
(h) Severability. In the event that any one of 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 shall be enforceable to the
fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the
------------------------------------
consent or approval of Holders of a specified number, or
percentage of principal amount or liquidation amount, as the case
may be, of, Registrable Securities or Exchange Securities is
required hereunder, Registrable Securities or Exchange
Securities, as applicable, held by the Company or its Affiliates
(other than subsequent Holders of Registrable Securities or
Exchange Securities if
<PAGE>
such subsequent Holders are deemed to be Affiliates solely by
reason of their holdings of such Registrable Securities or
Exchange Securities) shall not be counted in determining whether
such consent or approval was given by the Holders of such
required percentage.
<PAGE>
Please confirm your agreement by having your authorized
officer sign a copy of this Registration Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
LEUCADIA NATIONAL CORPORATION
By: /s/ Barbara Lowenthal
----------------------------------
Name: Barbara Lowenthal
Title: Vice President
LEUCADIA CAPITAL TRUST I
By: Leucadia National Corporation,
as Sponsor
By: /s/ Barbara Lowenthal
----------------------------------
Name: Barbara Lowenthal
Title: Vice President
Accepted:
SALOMON BROTHERS INC
By: /s/ Scott Littlejohn
------------------------------
Name: Scott Littlejohn
Title: Vice President
Date: January 21, 1997
NYFS04...:\30\76830\0146\1197\AGR1297X.460
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
LEUCADIA NATIONAL CORPORATION and LEUCADIA CAPITAL TRUST I on Form S-4 of our
report dated March 22, 1996 on our audits of the consolidated financial
statements and financial statement schedules of LEUCADIA NATIONAL CORPORATION as
of December 31, 1995 and 1994, and for the years ended December 31, 1995, 1994,
and 1993, which report is included in the Annual Report on Form 10-K of Leucadia
National Corporation. We also consent to the reference to our firm under the
caption "Experts."
/s/ Coopers & Lybrand L.L.P.
New York, New York
February 5, 1997
