<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1998.
REGISTRATION NO. 333-50517
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
<TABLE>
<S> <C>
TEXAS INDUSTRIES, INC. TXI CAPITAL TRUST I
(Exact name of Registrant as specified in its (Exact name of Registrant as specified in its
charter) charter)
1341 WEST MOCKINGBIRD LANE 1341 WEST MOCKINGBIRD LANE
DALLAS, TX 75247-6913 DALLAS, TX 75247-6913
(972) 647-6700 (972) 647-6700
(Address, including zip code, and telephone number, (Address, including zip code,telephone number,
including area code, of registrant's principal including area
executive offices) code, of registrant's principal executive offices)
DELAWARE DELAWARE
(State or other jurisdiction of incorporation or (State or other jurisdiction of incorporation or
organization) organization)
75-0832210 APPLIED FOR
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
</TABLE>
---------------------
ROBERT C. MOORE
VICE PRESIDENT, GENERAL COUNSEL & SECRETARY
1341 WEST MOCKINGBIRD LANE
DALLAS, TX 75247-6913
(972) 647-6700
(Name, address, including zip code, and telephone number, including the area
code, of agent for service)
With Copies to:
<TABLE>
<S> <C>
DAN BUSBEE
VAN M. JOLAS STEVEN R. FINLEY
LOCKE PURNELL RAIN HARRELL GIBSON, DUNN & CRUTCHER LLP
2200 ROSS AVENUE, SUITE 2200 200 PARK AVENUE
DALLAS, TEXAS 75201-6776 NEW YORK, NEW YORK 10166-0193
(214)740-8000 (212) 351-4000
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the Registration Statement.
---------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER UNIT(1) PRICE(2) REGISTRATION FEE(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities of Texas Industries, Inc.(4)
Preferred Stock of Texas Industries, Inc.(4)
Common Stock of Texas Industries, Inc.(4)(5)
Warrants of Texas Industries, Inc.(8) $500,000,000(6)(7) 100% $500,000,000(6)(7) $147,500
Trust Preferred Securities of TXI Capital Trust
I representing indirectly
undivided beneficial interests in Convertible
Subordinated Debentures of
Texas Industries, Inc. held by TXI Capital
Trust I
Guarantee of Trust Preferred Securities of TXI
Capital Trust I(9)
=================================================================================================================================
</TABLE>
(1) In United States dollars or the equivalent thereof in foreign currency or
currency units.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o).
(3) Of this amount, $66,375 has already been paid in connection with the initial
filing of this registration statement on April 20, 1998.
(4) Also includes such indeterminate amount of Debt Securities and indeterminate
numbers of shares of Preferred and Common Stock as may be issued upon
conversion or exchange of any other Debt Securities or shares of Preferred
Stock that provide for conversion or exchange into such securities or upon
exercise of Warrants for such securities.
(5) The registration statement also pertains to preferred share purchase rights
to purchase shares of Common Stock of TXI. One right is attached to and
trades with each share of Common Stock of TXI. Until the occurrence of
certain events, the rights are not exercisable and will not be evidenced or
transferred apart from the Common Stock.
(6) Such amount represents the aggregate of the principal amount of any Debt
Securities issued, the issue price of any Debt Securities issued at an
original issue discount, the liquidation preference of any Preferred Stock,
the amount computed pursuant to Rule 457(c) for any Common Stock, the issue
price of any Warrants and the exercise price of any Warrants.
(7) No separate cash consideration will be received for the Debt Securities,
Preferred Stock or Common Stock issuable upon conversion or exchange of
other Debt Securities or Preferred Stock.
(8) Warrants to purchase Debt Securities, Preferred Stock or Common Stock may be
sold separately or with Debt Securities, Preferred Stock or Common Stock.
(9) The TXI Capital Trust I Preferred Securities will be guaranteed as to the
payment of principal, interest and premium, if any, by TXI. No cash
consideration will be received by TXI for the Guarantees.
---------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE 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> 2
EXPLANATORY NOTE
This Registration Statement contains two forms of Prospectuses to be used
in connection with offerings of the following securities: (1) debt securities
(both senior and subordinated) of the Company, preferred stock and common stock
of the Company and warrants to purchase debt securities, preferred stock and
common stock of the Company and (2) preferred securities of TXI Capital Trust I,
subordinated debt securities of the Company and guarantees by the Company of
preferred securities issued by TXI Capital Trust I. Each offering of securities
made under this Registration Statement will be made pursuant to one of these two
Prospectuses, with the specification of the securities offered thereby set forth
in an accompanying Prospectus Supplement.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 1, 1998
<TABLE>
<S> <C> <C>
TXI Logo $
TEXAS INDUSTRIES, INC.
</TABLE>
Debt Securities and Warrants to Purchase Debt Securities
Common Stock, Preferred Stock and Warrants
to Purchase Common Stock and Preferred Stock
---------------------
Texas Industries, Inc. ("TXI" or the "Company") intends to offer from time
to time in one or more series debt securities consisting of unsecured
debentures, notes or other evidences of indebtedness (the "Debt Securities"). At
the option of the Company, the Debt Securities may be offered as Senior Debt
Securities ("Senior Debt Securities") and as Subordinated Debt Securities
("Subordinated Debt Securities"). TXI may also offer from time to time warrants
to purchase Debt Securities ("Debt Warrants"), which may be issued independently
or together with Debt Securities. TXI may offer from time to time Common Stock
("Common Stock"), Preferred Stock ("Preferred Stock") and warrants to purchase
Common or Preferred Stock ("Equity Warrants"), which may be issued independently
or together with Common Stock or Preferred Stock. Such Common Stock and
Preferred Stock also may be issued upon conversion or exchange of Debt
Securities and such Common Stock may be issued upon conversion of Preferred
Stock. The Debt Securities, Debt Warrants, Common Stock, Preferred Stock and
Equity Warrants are referred to collectively as the "Securities." No more than
an aggregate of $ public offering price of Securities, including the
exercise price of Debt Warrants and Equity Warrants, may be sold pursuant to
this Prospectus. The Securities may be sold for United States dollars, foreign
currency or currency units.
Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered will be set forth in the accompanying
Prospectus Supplement, including, where applicable: (i) in the case of Debt
Securities, the title, aggregate principal amount, authorized denominations,
maturity, interest rate (which may be fixed or variable) and time of payment of
interest, terms for redemption, terms for sinking fund payments, terms for
conversion or exchange into other Securities, currency or currencies of
denomination and payment (if other than U.S. dollars), listing on a securities
exchange and any other terms in connection with the offering and sale of the
Debt Securities in respect of which this Prospectus is delivered, as well as the
initial public offering price; (ii) in the case of Preferred Stock, the specific
title, number of shares, dividend (including the method of calculation),
seniority, liquidation, redemption, voting and other rights, terms for any
conversion or exchange into other Securities, listing on a securities exchange,
initial public offering price and any other terms; (iii) in the case of Common
Stock, the number of shares and the terms of the offering thereof; and (iv) in
the case of Debt Warrants and Equity Warrants, the designation and number,
exercise price, any listing of the Debt Warrants, Equity Warrants or the
underlying Securities on a securities exchange and any other terms in connection
with the offering, sale and exercise of the Debt Warrants and Equity Warrants.
Debt Securities of a series may be issued in registered form, in a form
registered as to principal only, or in bearer form (with or without coupons
attached), or any combination of such forms. In addition, all or a portion of
the Debt Securities may be issued in temporary or definitive global form. Debt
Securities in bearer form are offered only outside the United States to
non-United States persons and to offices located outside the United States of
certain United States financial institutions and other exempt persons. See
"Limitations on the Issuance of Bearer Securities."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The Securities will be sold directly, through agents designated from time
to time or through underwriters or dealers, which may be a group of
underwriters. The Securities also may be exchanged for outstanding securities of
the Company and resold by the holder pursuant to this Prospectus in the
over-the-counter market, through negotiated transactions or otherwise, at market
prices prevailing at the time of sale or at prices otherwise negotiated. The
terms of any such exchange and the method of resale by the holder will be set
forth in a Prospectus Supplement. If any agents of the Company or any dealers or
underwriters are involved in the sale of the Securities, the names of such
agents, underwriters or dealers and any applicable commissions or discounts will
be set forth in a Prospectus Supplement.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE> 4
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), through the Electronic Data Gathering, Analysis and Retrieval
System ("EDGAR"), a registration statement on Form S-3 under the Securities Act
of 1933, as amended (the "Securities Act") with respect to the Securities
offered hereby (the "Registration Statement"). This Prospectus, filed as part of
the Registration Statement, does not contain all of the information included in
the Registration Statement and the exhibits and schedules thereto, certain
portions of which have been omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Securities offered hereby, reference is hereby made to the Registration
Statement and the exhibits and schedules filed therewith or incorporated by
reference thereto. Statements contained in this Prospectus as to the contents of
any contract, agreement or other document are not necessarily complete and in
each such instance, reference is made to the copy of such contract, agreement or
other document filed as an exhibit to the Registration Statement, including
documents incorporated by reference, for a more complete description of the
matters involved and each such statement shall be deemed qualified in its
entirety by such reference. The Registration Statement, including the exhibits
and schedules thereto, may be inspected without charge and copied at the offices
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at 7
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials may be obtained at the prescribed rates from the Commission's Public
Reference Section at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Electronic registration statements filed through EDGAR
may also be accessed electronically through the Commission's home page on the
World Wide Web at http://www.sec.gov.
The Company is subject to the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, it files reports, proxy statements and other information
required thereby with the Commission via EDGAR. Copies of such material may be
inspected and copied at the offices of the Commission and accessed
electronically through the Commission's home page on the World Wide Web.
Reports, proxy statements, other required information statements and other
information concerning the Company may also be inspected at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference:
1. Annual Report on Form 10-K for the fiscal year ended May 31, 1997.
2. Quarterly Report on Form 10-Q for the quarter ended August 31, 1997.
3. Quarterly Report on Form 10-Q for the quarter ended November 30, 1997.
4. Quarterly Report on Form 10-Q for the quarter ended February 28, 1998.
5. Current Report on Form 8-K dated July 30, 1997.
6. Current Report on Form 8-K dated September 16, 1997.
7. Current Report on Form 8-K dated January 26, 1998.
8. Proxy Statement for the Annual Meeting of Stockholders held on October
21, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent
2
<PAGE> 5
that a statement contained herein or in any other subsequently filed document
which is or is 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.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the documents
incorporated herein by reference (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference into such
documents). Requests for such copies should be directed to the Director-Investor
Relations, of the Company at Texas Industries, Inc., 1341 West Mockingbird Lane,
Dallas, Texas 75247-6913 or by telephone at (972) 647-6700.
USE OF PROCEEDS
TXI will use the net proceeds from the sale of the Securities for the
reduction of indebtedness incurred in the normal and ordinary course of its
business, and for other general corporate purposes.
THE COMPANY
TXI is a leading supplier of construction materials through two business
segments: cement, aggregate and concrete products; and structural steel and
specialty bar products. The Company is the largest producer of cement in Texas
and the second largest supplier of structural steel products in North America.
Demand for structural steel, cement, aggregate and concrete products is
primarily driven by construction activity, while specialty bar products supply
the original equipment manufacturer, tool and oil country goods markets.
The Company is the only major North American producer of both cement and
steel. TXI has derived significant benefits therefrom, primarily in lowering
production costs and enhancing productivity through the innovative recycling of
by-products of manufacturing. The Company has extensive operating experience in
both of its business segments. Founded in 1951, the Company began its cement
operations in 1960 with the opening of its Midlothian, Texas facility and added
its steel operations in 1975 with the construction of a plant in Midlothian.
The Company is a Delaware corporation, with its principal executive office
at 1341 West Mockingbird Lane, Dallas, TX 75247-6913, and its telephone number
at that address is (972) 647-6700.
3
<PAGE> 6
HISTORICAL CONSOLIDATED
SELECTED FINANCIAL INFORMATION
The selected consolidated statement of income data and the selected
consolidated balance sheet data as of May 31, 1993, 1994, 1995, 1996 and 1997
and for the fiscal years then ended have been derived from the Company's audited
consolidated financial statements and should be read in conjunction with those
statements, which are included in this Prospectus or incorporated herein by
reference. The selected consolidated statement of income data for the nine month
periods ended February 28, 1997 and 1998 and the consolidated balance sheet data
as of February 28, 1998 were derived from the unaudited consolidated financial
statements included herein. In the opinion of management, the unaudited
information includes all adjustments, consisting of only normal recurring
adjustments, necessary for a fair presentation of the financial position and
results of operations of the Company at the dates and for the periods presented.
Results for the nine month period ended February 28, 1998 are not necessarily
indicative of the results that may be expected for the full fiscal year. The
selected consolidated financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and notes
thereto which are included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEARS ENDED MAY 31, FEBRUARY 28,
---------------------------------------------------- -------------------------
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- -------- -------- --------------
(IN THOUSANDS EXCEPT DATA PER COMMON SHARE)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net sales................................. $614,292 $707,147 $830,526 $967,449 $973,824 $696,936 $ 861,168
Costs and expenses (income)
Cost of products sold................... 545,200 598,601 681,824 756,715 767,030 554,956 683,116
Selling, general and administrative..... 43,116 47,341 58,275 68,852 76,535 56,006 67,798
Interest................................ 32,596 26,231 20,117 19,960 18,885 14,165 14,418
Other income............................ (6,639) (8,614) (7,571) (13,119) (11,848) (7,169) (10,603)
-------- -------- -------- -------- -------- -------- ----------
614,273 663,559 752,645 832,408 850,602 617,958 754,729
-------- -------- -------- -------- -------- -------- ----------
Income before the following items......... 19 43,588 77,881 135,041 123,222 78,978 106,439
Income taxes.............................. (646) 15,556 25,700 47,256 41,189 26,767 35,252
-------- -------- -------- -------- -------- -------- ----------
665 28,032 52,181 87,785 82,033 52,211 71,187
Minority interest in Chaparral(1)......... 393 (2,281) (4,164) (7,831) (6,559) (4,298) (4,400)
-------- -------- -------- -------- -------- -------- ----------
Net income................................ $ 1,058 $ 25,751 $ 48,017 $ 79,954 $ 75,474 $ 47,913 $ 66,787
======== ======== ======== ======== ======== ======== ==========
PER SHARE DATA:
Basic
Average common shares................... 22,076 22,473 24,567 22,203 21,751 22,012 21,066
Net income per common Share............. $ 0.06 $ 1.15 $ 1.96 $ 3.61 $ 3.48 $ 2.18 $ 3.18
======== ======== ======== ======== ======== ======== ==========
Diluted
Average common shares................... 25,201 25,273 24,817 22,682 22,163 22,457 21,717
Net income per common share............. $ 0.05 $ 1.03 $ 1.94 $ 3.53 $ 3.42 $ 2.14 $ 3.08
======== ======== ======== ======== ======== ======== ==========
Cash dividends per common share........... $ 0.10 $ 0.10 $ 0.15 $ 0.20 $ 0.25 $ 0.18 $ 0.23
OTHER DATA:
EBITDA(2)................................. $ 82,414 $118,781 $147,340 $204,281 $196,016 $134,122 $ 165,858
Capital expenditures...................... 17,212 23,305 48,751 79,300 85,188 65,262 344,335
Long-term debt to total capitalization (at
end of period).......................... 48.6% 32.7% 35.1% 27.6% 28.0% 30.3% 41.6%
</TABLE>
<TABLE>
<CAPTION>
MAY 31, FEBRUARY 28,
---------------------------------------------------- ------------
1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Net working capital....................... $159,408 $161,383 $187,603 $219,345 $242,994 $ 221,532
Total assets.............................. 757,300 749,120 753,055 801,063 847,923 1,117,368
Long-term debt............................ 267,243 171,263 185,274 160,209 176,056 369,404
Shareholders' equity...................... 282,511 352,671 343,109 420,022 452,811 517,549
</TABLE>
- ---------------
(1) On December 31, 1997, TXI acquired the 15.7% in Chaparral previously held
by public shareholders.
(2) EBITDA is earnings before interest, income taxes, depreciation and
amortization. EBITDA should not be considered as an alternative to income
from operations or cash flow from operating activities (each determined in
accordance with generally accepted accounting principles).
4
<PAGE> 7
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
FISCAL YEAR ENDED MAY 31, FEBRUARY 28,
------------------------------------ ------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(1).............. 1.01 2.37 4.05 6.00 5.70 5.10 5.72
</TABLE>
- ---------------
(1) For purposes of this ratio, earnings consist of earnings from continuing
operations (before an extraordinary item (the early extinguishment of debt))
before taxes on income and fixed charges. Fixed charges consist of interest
on indebtedness and capital lease obligations, amortization of debt
discount, debt premium and issuance expense and that portion of operating
lease rental expense which is representative of the interest factor (assumed
to be one-third).
5
<PAGE> 8
DESCRIPTION OF THE DEBT SECURITIES
Described below are certain general terms and provisions of the Debt
Securities to which a Prospectus Supplement may relate or for which Debt
Warrants may be exercisable. The particular terms of the Debt Securities and the
extent, if any, to which such general provisions may apply to a particular
series of Debt Securities ("Offered Debt Securities") will be described in the
Prospectus Supplement relating to such Offered Debt Securities.
The Senior Debt Securities will be issued under a proposed indenture (the
"Senior Indenture") among the Company and a trustee to be named in any
Prospectus Supplement relating to Senior Debt (the "Senior Trustee"). The
Subordinated Debt Securities will be issued under a proposed indenture (the
"Subordinated Indenture") among the Company and a trustee to be named in any
Prospectus Supplement relating to Subordinated Debt Securities (the
"Subordinated Trustee"). The Senior Indenture and the Subordinated Indenture are
referred to collectively as the "Indentures" and individually as an "Indenture."
Neither of the Indentures will limit the amount of Debt Securities which may be
issued thereunder. Each of the Indentures will provide that Debt Securities of
any series may be issued thereunder up to the aggregate principal amount which
may be authorized from time to time by the Company.
The following summaries of certain provisions of the Debt Securities and
the Indentures do not purport to be complete and are subject to, and qualified
in their entirety by reference to, all provisions of the Indentures, including
the definitions of certain terms used therein. Wherever the Indentures or terms
that are defined in the Indentures are referred to herein or in an accompanying
Prospectus Supplement, it is intended that such terms will be incorporated by
reference as a part of the statements made herein or therein, and the statements
are qualified in their entirety by such reference. Unless otherwise indicated,
when used in this Prospectus the term "principal" will mean principal of, and
any premium on, the Debt Securities.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company.
The Senior Debt Securities will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company, and will have a right of payment
prior to any Subordinated Debt Securities, in the case of Senior Debt
Securities. The indebtedness represented by the Subordinated Debt Securities
will be subordinated in right of payment to the prior payment in full of the
Senior Debt of the Company as described below under "Subordination." The Debt
Securities may be issued in one or more series with the same or various
maturities at or above par or with an original issue discount. Offered Debt
Securities bearing no interest or interest at a rate which at the time of
issuance is below market rates ("Original Issue Discount Securities") will be
sold at a discount (which may be substantial) below their stated principal
amount. In the event of redemption or acceleration of the maturity of an
Original Issue Discount Security, the amount payable to the holder of such
Security upon such redemption or acceleration will be determined in accordance
with the terms of the Security, but will be an amount less than the amount
payable at the Stated Maturity of such Security.
Reference is made to the Prospectus Supplement relating to the Offered Debt
Securities for the following terms thereof:
(1) the title of the Offered Debt Securities;
(2) any limit upon the aggregate principal amount of the Offered Debt
Securities;
(3) the percentage of their principal amount for which the Offered
Debt Securities will be issued;
(4) the date or dates on which the principal of the Offered Debt
Securities will be payable;
(5) the rate or rates (which may be fixed or variable) at which the
Offered Debt Securities will bear interest, if any, or the method by which
such rate or rates will be determined;
(6) the date or dates from which any such interest will accrue or the
method by which such date or dates will be determined;
6
<PAGE> 9
(7) the dates on which payment of any such interest will be payable
and the record dates for such interest payment dates;
(8) the place or places where the principal of and any interest on the
Offered Debt Securities (and Coupons, if any) will be payable and the
offices or agencies of the Company maintained for such purposes and each
office or agency where the Offered Debt Securities may be presented for
registration of transfer or exchange;
(9) the period or periods within which, the price or prices at which,
and the terms and conditions upon which, the Offered Debt Securities may be
redeemed in whole or in part, at the option of the Company;
(10) the obligation of the Company, if any, to redeem, repay or
purchase, in whole or in part, the Offered Debt Securities pursuant to any
sinking fund or analogous provision or at the option of a holder of an
Offered Debt Security and the period or periods within which, the price or
prices at which, and the terms and conditions upon which, the Offered Debt
Securities will be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation;
(11) any restrictive covenants included for the benefit of holders of
the Offered Debt Securities;
(12) any additional Events of Default with respect to the Offered Debt
Securities;
(13) the principal amount of the Offered Debt Securities that are
Original Issue Discount Securities payable upon declaration of acceleration
of the maturity of the Offered Debt Securities;
(14) the currency or currency unit for which the Offered Debt
Securities may be purchased, the currency or currency unit in which the
payment of principal and interest on such Offered Debt Securities will be
payable, the right of the Company or the holder to elect a currency
different from that in which the Offered Debt Securities are denominated
for payments of principal and interest, and the Exchange Rate Agent, if
any;
(15) any index used to determine the amount of payments of principal
of and interest on the Offered Debt Securities;
(16) whether the Offered Debt Securities will be issued in registered
form, in a form registered only as to principal, or in bearer form, or any
combination thereof;
(17) whether and on what terms the Offered Debt Securities will be
convertible or exchangeable into shares of Preferred Stock or Common Stock;
(18) whether any of the Offered Debt Securities will be issuable
initially as a temporary Global Security (as defined in "Form, Exchange,
Registration and Transfer") and whether any of the Offered Debt Securities
are to be issuable as a permanent Global Security, or any combination
thereof and, if so, the Depositary (as defined in "Global Securities") or
Depositaries therefor;
(19) if a temporary Global Security is to be issued with respect to
such series, the requirements for certification of ownership by non-United
States persons that will apply prior to (a) the issuance of a definitive
Bearer Security (as defined in "Form, Exchange, Registration and Transfer")
or (b) the payment of interest on an Interest Payment Date that occurs
before the issuance of a definitive Bearer Security;
(20) the circumstances under which Offered Debt Securities may be
exchanged for Debt Securities issued in a different form;
(21) any paying agents, transfer agents, registrars or other agents
with respect to the Offered Debt Securities;
(22) whether and under what circumstances the Company will pay
additional amounts to any holder of Offered Debt Securities who is not a
United States person (as defined under "Limitations on the Issuance of
Bearer Securities") in respect of any tax, assessment or governmental
charge required to
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be withheld or deducted and, if so, whether the Company will have the
option to redeem rather than pay any additional amounts;
(23) whether any of the provisions described in "Events of Default,"
"Subordination," "Conversion and Exchange," "Form, Exchange, Registration
and Transfer," and "Defeasance" will not apply to the Offered Debt
Securities;
(24) any other terms of the Offered Debt Securities not inconsistent
with the applicable Indenture; and
(25) a discussion of certain federal income tax considerations, if
required.
INTEREST AND FOREIGN CURRENCY
Principal and interest will be payable, and the Offered Debt Securities
will be transferable, in the manner described in the Prospectus Supplement
relating to such Offered Debt Securities.
If any of the Offered Debt Securities are sold for any foreign currency or
currency unit or if principal of or any interest on any of the Offered Debt
Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such Offered Debt Securities and such foreign currency or
currency unit will be specified in a Prospectus Supplement.
EVENTS OF DEFAULT
The Senior Indenture and the Subordinated Indenture will define an Event of
Default with respect to any series of Debt Securities as being any one of the
following events: (i) default in the payment of any interest on any Debt
Security of that series when due, continued for 30 days, (ii) default in the
payment of the principal of a Debt Security of that series when due, (iii)
default in the deposit of any sinking fund payment when and as due by the terms
of a Debt Security of such series, (iv) default in any material respect in the
performance in any other of the Company's material covenants in the applicable
Indenture (other than a covenant included in such Indenture solely for the
benefit of another series of Debt Securities), continued for 90 days after
written notice has been given by the Trustee to the Company or by holders of at
least 25% in principal amount of the Outstanding Debt Securities of such series
to the Company and the Trustee, (v) a default resulting in acceleration of any
other indebtedness for borrowed money, in an aggregate principal amount
exceeding $10,000,000, of the Company under the terms of the instrument or
instruments under which such indebtedness is issued or secured, unless such
acceleration is annulled, or such indebtedness is discharged, or there is
deposited in trust a sum of money sufficient to discharge such indebtedness,
within 20 days after written notice has been given by the Trustee to the Company
or by holders of at least 25% in principal amount of the Outstanding Debt
Securities of such series to the Company and the Trustee, and (vi) certain
events of bankruptcy, insolvency or reorganization.
No holder of any Debt Security of a series will have any right to institute
any proceeding with respect to the applicable Indenture or for any remedy
thereunder, unless such holder previously has given to the Trustee written
notice of an Event of Default with respect to such series and unless the holders
of at least 25% in aggregate principal amount of the Debt Securities of that
series at the time outstanding have made written request upon the Trustee, and
have offered reasonable security or indemnity, to institute such proceeding as
trustee under such Indenture, and the Trustee for 60 days shall have failed to
institute such proceeding. However, the right of any holder of any Debt Security
to institute suit for enforcement of any payment of principal of and interest on
such Debt Security on or after the due date expressed in such Debt Security may
not be impaired or affected without such holder's consent.
The holders of a majority in principal amount of Debt Securities of any
series at the time outstanding may 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 Debt Securities of
that series, provided that such holders have offered reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
the Trustee in compliance with any such direction and subject to certain other
restrictions.
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The Company will be required to furnish to the Trustee within 120 days
after the end of each fiscal year a statement as to its compliance with all
conditions and covenants under the Indentures.
SUBORDINATION
The indebtedness represented by the Subordinated Debt Securities will be
subordinate and junior in right of payment to the prior payment in full of all
Senior Debt of the Company, whether outstanding on the date of the Subordinated
Indenture or thereafter incurred. "Senior Debt" is defined as (i) all
indebtedness of the Company, as the case may be, for borrowed money, (ii) all
indebtedness for borrowed money of others guaranteed by the Company and (iii)
any obligation of the Company under any interest rate or currency swap
agreement, in each case whether outstanding on the date of the Indenture or
incurred thereafter that is not by its terms subordinate and junior in right of
payment to any other indebtedness of the Company, as the case may be, and
includes all indebtedness at any time evidenced by Senior Debt Securities.
In the event (i) of any liquidation, dissolution or other winding up of the
Company, or of any receivership, insolvency, bankruptcy, readjustment,
reorganization or other similar proceedings relative to the Company or any of
its property, all principal of and any interest due on all Senior Debt will be
paid in full, or provided for, before any principal, sinking fund, if any, or
interest payment is made on the Subordinated Debt Securities, or (ii) that the
Subordinated Debt Securities are declared due and payable because of the
occurrence of an Event of Default (under circumstances such that the preceding
clause (i) will not be applicable), the holders of the Subordinated Debt
Securities will be entitled to payment only after all principal of and any
interest due on the Senior Debt has been paid or has been provided for.
By reason of such subordination, creditors of the Company who are holders
of Senior Debt Securities may recover more, ratably, than holders of
Subordinated Debt Securities.
CONVERSION AND EXCHANGE
The terms, if any, on which Offered Debt Securities are convertible into or
exchangeable for Preferred Stock or Common Stock will be set forth in the
Prospectus Supplement relating thereto. Such terms may include provisions for
conversion or exchange, either mandatory, at the option of the holder or at the
option of the Company.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
The Debt Securities may be issued in fully registered form without coupons,
in a form registered as to principal only with or without bearer coupons
("Registered Securities") or in bearer form with or without coupons ("Bearer
Securities") or any combination thereof. Debt Securities also may be issued in
whole or in part, in the form of one or more temporary or permanent global
securities (each a "Global Security"). Unless otherwise specified in the
applicable Prospectus Supplement relating to the Offered Debt Securities, the
Debt Securities will be only Registered Securities. The Debt Securities
denominated in United States Dollars will be issued, unless otherwise set forth
in the applicable Prospectus Supplement relating to the Offered Debt Securities,
in denominations of $1,000 for Registered Securities and in denominations of
$5,000 for Bearer Securities, and in any integral multiple of such
denominations. See "Limitations on the Issuance of Bearer Securities." One or
more Global Securities will be issued in a denomination or aggregate
denominations equal to the aggregate principal amount of Outstanding Debt
Securities of the series to be represented by such Global Security or
Securities. The Prospectus Supplement relating to a series of Debt Securities
denominated in a foreign or composite currency will specify the denomination
thereof.
Registered Securities of any series (other than a Global Security, except
as set forth below) will be exchangeable for other Registered Securities of the
same series and of a like aggregate principal amount and tenor of different
authorized denominations. In addition, if Debt Securities of any series are
issuable as both Registered Securities and Bearer Securities, at the written
request of the holder, and subject to the terms of the applicable Indenture,
Bearer Securities (with all unmatured coupons, except as provided below, and all
mature coupons in default) of such series will be exchangeable into Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. No Bearer Securities will be
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delivered in the United States. Bearer Securities with coupons appertaining
thereto surrendered in exchange for Registered Securities between a Regular
Record Date, or, in certain circumstances a Special Record Date, and the
relevant date for payment of interest must be surrendered without the coupon
relating to such date for payment of interest and such interest will not be
payable in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the holder of such coupon when due in
accordance with the terms of the applicable Indenture. Unless otherwise stated
in a Prospectus Supplement, Registered Securities will not be exchangeable into
Bearer Securities. If a holder elects to receive a definitive Bearer Security,
rather than hold an interest in a permanent global Bearer Security, then, at the
option of the Company, such holder must pay to the Company a service charge and
a proportionate share of the cost of printing such definitive Bearer Security.
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or at the office of any
transfer agent designated by the Company for such purpose with respect to any
series of Debt Securities and specified in the applicable Prospectus Supplement,
upon payment of any required service charges and taxes and other governmental
charges. The holders of the Debt Securities will be required to pay all service
charges for the exchange or transfer of any Debt Security, except the Company
shall pay for such service charges (i) for the transfer from a temporary global
Debt Security to any other form of Debt Security, (ii) if the Debt Securities
are listed on a stock exchange that requires the issuer to pay such charges as a
condition to listing or (iii) if the applicable Prospectus Supplement otherwise
specifies. Such transfer or exchange will be effected once the Security
Registrar or such transfer agent, as the case may be, is satisfied with the
document of title and identity of the person making the request. Bearer
Securities will be transferable by delivery.
The Company will appoint the Senior Trustee under the Senior Indenture and
the Subordinated Trustee under the Subordinated Indenture, as Security
Registrar. The identity and address of the Senior and Subordinated Trustee will
appear in the applicable Prospectus Supplement. If the applicable Prospectus
Supplement specifies any transfer agents in addition to the Security Registrar
with respect to any series of Debt Securities, the Company may at any time
rescind the designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that, if Debt
Securities of a series are issuable only as Registered Securities, the Company
will be required to maintain a transfer agent in each Place of Payment for such
series and, if Debt Securities of a series are issuable as Bearer Securities,
the Company will be required to maintain (in addition to the Security Registrar)
a transfer agent in a Place of Payment for such series located outside the
United States. The Company may at any time designate additional transfer agents
with respect to any series of Debt Securities.
In the event of any redemption in part, the Company shall not be required
to: (i) issue, register the transfer or exchange of Debt Securities of any
series during a period beginning at the opening of 15 Business Days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on (a) the day of mailing of the relevant notice of
redemption, if Debt Securities of the series are issuable only as Registered
Securities, (b) the day of the first publication of the relevant notice of
redemption, if Debt Securities of the series are issuable only as Bearer
Securities, or (c) the day of mailing of the relevant notice of redemption, if
Debt Securities of the series are issuable as Registered Securities and Bearer
Securities and there is no publication; (ii) register the transfer or exchange
of any Registered Security, or portion thereof, called for redemption, except
the unredeemed portion of any Registered Security being redeemed in part; or
(iii) exchange any Bearer Security called for redemption, except to exchange
such Bearer Security for a Registered Security of that series and like tenor
which is simultaneously surrendered for redemption.
PAYMENT AND PAYING AGENTS
Payment of principal of, and any interest on, Registered Securities, unless
otherwise specified in the applicable Prospectus Supplement, will be made at the
office of the Paying Agent or Paying Agents as the Company may designate from
time to time, except that at the option of the Company payment of any interest
may be made by check mailed to the address of the person entitled thereto as
such address shall appear in the Security Register. Payment of any installment
of interest on Registered Securities will be made to the person
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in whose name such Registered Security is registered at the close of business on
the Regular Record Date for such interest, except as otherwise specified in the
applicable Prospectus Supplement.
Payment of principal of, and any interest on, Bearer Securities will be
payable in United States dollars, unless a different currency is designated in
the applicable Prospectus Supplement, subject to any applicable laws and
regulations, at the offices of such Paying Agents outside the United States as
the Company may designate from time to time. Payment of interest on Bearer
Securities with coupons appertaining thereto on any Interest Payment Date will
be made only against surrender of the coupon relating to such Interest Payment
Date, unless otherwise indicated in the applicable Prospectus Supplement. No
payment with respect to any Bearer Security will be made at the Corporate Trust
Office of the Trustee or any office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
an account maintained in the United States. Notwithstanding the foregoing,
payments of principal of, and any interest on, Bearer Securities denominated and
payable in United States Dollars will be made at the office of the Company's
Paying Agent in New York City, if (but only if) payment of the full amount
thereof in United States Dollars at all offices or agencies outside the United
States is illegal or effectively precluded by exchange controls or other similar
restrictions.
The Company will designate the New York City Corporate Trust Office of the
Senior Trustee and the New York City Corporate Trust Office of the Subordinated
Trustee, as the sole Paying Agent for payments with respect to Offered Debt
Securities that are issuable as Registered Securities, and as the Paying Agent
in New York City for payments with respect to Offered Debt Securities (subject
to the limitations described above in the case of Bearer Securities) that are
issuable solely as Bearer Securities or as both Registered Securities and Bearer
Securities. Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by the Company for the Offered
Debt Securities will be named in the applicable Prospectus Supplement. The
Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts. However, the Company will be required to maintain a
Paying Agent in each Place of Payment for Debt Securities of each series that is
issuable solely as Registered Securities, and the Company will be required to
maintain for each series of Bearer Securities a Paying Agent (i) in New York
City for payments with respect to any Registered Securities of the series (and
for payments with respect to Bearer Securities of the series in the
circumstances described above, but not otherwise), (ii) in a place of payment
located outside the United States where Debt Securities of such series and any
coupons appertaining thereto may be presented and surrendered for payment and
(iii) each place outside the United States required by any stock exchange on
which Debt Securities of such series are listed.
All amounts paid by the Company to a Paying Agent for the payment of
principal of, and any interest on, any Debt Securities that remain unclaimed at
the end of two years after such principal or interest has become due and payable
will be repaid to the Company and the holder of such Debt Security or any coupon
appertaining thereto will thereafter look only to the Company for payment
thereof.
GLOBAL SECURITIES
The Offered Debt Securities may be issued in whole or in part in the form
of one or more Global Securities that will be deposited with, or on behalf of, a
depositary (the "Depositary") identified in the applicable Prospectus
Supplement. Global Securities may be issued in either registered or bearer form
and in either temporary or definitive form. Unless and until it is exchanged in
whole or in part for Debt Securities in definitive form, a Global Security may
not be transferred except as a whole by the Depositary for such Global Security
to a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any
Offered Debt Securities will be described in the applicable Prospectus
Supplement. The Company anticipates that the following provisions will apply to
all depositary arrangements.
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Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such Depositary
("Participants"). The accounts to be credited shall be designated by the
underwriters of such Debt Securities, by certain agents of the Company or by the
Company, if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Security will be limited to
Participants or persons that may hold interests through Participants. Ownership
of beneficial interests in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depositary for such Global Security or by Participants or by persons that
hold through Participants. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such ownership limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture
governing such Debt Securities. Except as set forth below, owners of beneficial
interests in a Global Security will not be entitled to have Debt Securities of
the series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt Securities of
such series in definitive form and will not be considered the owners or holders
thereof under the Indenture governing such Debt Securities.
Subject to the restrictions discussed under "Limitations on the Issuance of
Bearer Securities," principal and interest payments on Debt Securities
registered in the name of or held by a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner or
the holder of the Global Security representing such Debt Securities. None of the
Company, the Trustee for such Debt Securities, any paying agent or the Security
Registrar for such Debt Securities 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 such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal or interest in respect of a definitive
Global Security, will immediately credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security as shown on the records of such Depositary. The
Company also expects that payments by Participants to owners of beneficial
interests in such Global Security held through such Participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such participants.
If a Depositary for Debt Securities of a series is at any time unwilling or
unable to continue as Depositary and a successor Depositary is not appointed by
the Company within 90 days, the Company will issue Debt Securities of such
series in definitive form in exchange for the Global Security or Securities
representing the Debt Securities of such series. In addition, the Company may at
any time and in its sole discretion determine not to have any Debt Securities of
a series represented by one or more Global Securities and, in such event, will
issue Debt Securities of such series in definitive form in exchange for the
Global Security or Securities representing such Debt Securities. Further, an
owner of a beneficial interest in a Global Security representing Debt Securities
of such series may, under certain circumstances and on terms acceptable to the
Company and the Depositary for such Global Security, receive Debt Securities of
such series in definitive form. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery in
definitive form of Debt Securities of the series represented by such Global
Security equal in principal amount to such beneficial interest and to have such
Debt Securities registered in its name (if the Debt Securities of such series
are issuable as Registered Securities). Unless otherwise specified by the
Company, Debt Securities of such series so issued in definitive form will be
issued: (i) as Registered Securities in denominations of $1,000 and integral
multiples thereof, if the Debt Securities of such series are issuable as
Registered Securities; (ii) as Bearer Securities in the denominations of $5,000,
if the Debt Securities of such series are issuable as Bearer Securities; or
(iii) as either Registered or Bearer Securities in such denominations, if the
Debt Securities of
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such series are issuable in either form. See "Limitations on the Issuance of
Bearer Securities" for a description of certain restrictions on the issuance of
a Bearer Security in definitive form in exchange for an interest in a Global
Security.
MEETINGS, MODIFICATION AND WAIVER
Modification of Indentures. The Senior Indenture and the Subordinated
Indenture will provide that the Company and the Trustee thereunder may, without
the consent of any holders of Debt Securities, enter into supplemental
indentures for the purposes, among other things, of adding to the Company's
covenants, adding additional Events of Default, establishing the form or terms
of Debt Securities or curing ambiguities or inconsistencies in such Indenture or
making other provisions; provided such action shall not adversely affect the
interests of the holders of any series of Debt Securities in any material
respect. In addition, modifications and amendments of each Indenture may be made
by 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 then outstanding
of each series affected by such modification or amendment; provided, however,
that no such modification or amendment may, without the consent of the holder of
each Debt Security then outstanding that is affected thereby, (i) change the
Stated Maturity of the principal of, or any installment of principal of or
interest on any Debt Security, (ii) reduce the principal amount of or interest
on any Debt Security, (iii) change any obligation to pay additional amounts,
(iv) reduce the amount of principal of an Original Issue Discount Security
payable upon acceleration of the Maturity thereof, (v) change the Place of
Payment or the currency or currency unit in which any Debt Security or interest
thereon is payable, (vi) impair the right to institute suit for the enforcement
of any payment on or with respect to any Debt Security, (vii) reduce the
percentage in principal amount of Debt Securities then outstanding of any
series, the consent of whose holders is required for modification or amendment
of the applicable Indenture or for any waiver of compliance with certain
provisions of the Indenture or for waiver of certain defaults, (viii) change any
obligation of the Company to maintain an office or agency in the places and for
the purposes required by an Indenture, (ix) if the Debt Securities are
convertible into any other security of the Company, make any change that would
materially adversely affect the right to convert such Debt Securities, or (x)
modify any of the above provisions. If the Debt Securities of any series are
issuable upon the exercise of Debt Warrants, then each holder of a Debt Warrant
with respect to such series shall be treated as a holder of such Debt Securities
in the amount issuable upon exercise of such Debt Warrant for purposes of voting
under the Indenture.
Waiver of Default. The holders of a majority in aggregate principal amount
of the Debt Securities then outstanding of each series may, on behalf of the
holders of all the Debt Securities of that series, waive, insofar as that series
is concerned, compliance by the Company with certain restrictive provisions of
the applicable Indenture. The holders of a majority in aggregate principal
amount of the Debt Securities then outstanding of each series may, on behalf of
all holders of Debt Securities of that series and any coupons appertaining
thereto, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default (a) in the payment of principal of
or any interest on any Debt Security of such series and (b) in respect of a
covenant or provision of the Indenture which cannot be modified or amended
without the consent of the holder of each Debt Security then outstanding of such
series affected.
Calculating Outstanding Principal. The Senior Indenture and the
Subordinated Indenture will provide that in determining whether the holders of
the requisite principal amount of the Debt Securities that are outstanding have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or are present at a meeting of holders of Debt Securities for quorum
purposes, (i) the principal amount of an Original Issue Discount Security that
will be deemed to be outstanding will be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof, and (ii) the principal amount of a Debt
Security denominated in a foreign currency or currency unit will be deemed to be
that amount of United States dollars that could be obtained for such principal
amount on the basis of the spot rate of exchange for such foreign currency or
currency unit as determined by the Company or an Exchange Rate Agent up to ten
days before the date of the action by the holders.
Meetings and Voting. The Senior Indenture and the Subordinated Indenture
will contain a provision for convening meetings of the holders of Debt
Securities of a series, including Debt Securities issuable as Bearer
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Securities. A meeting may be called at any time by the Trustee, and upon
request, by the Company or the holders of at least 25% in principal amount of
the Debt Securities then outstanding of such series, in any such case upon
notice given in accordance with "Notices." Except as described under
"Modifications of Indentures" and "Waiver of Default," a resolution presented at
a meeting or reconvened meeting at which a quorum of the holders of Debt
Securities then outstanding of the applicable series is present may be adopted
by the affirmative vote of the lesser of (i) the holders of a majority in
principal amount of the Debt Securities then outstanding of such series, or (ii)
the holders of 66 2/3% in principal amount of the Debt Securities then
outstanding of such series represented and voting at the meeting; provided,
however, that if any consent, waiver, or other action which the applicable
Indenture expressly provides may be made, given or taken by the holders of a
specified percentage, which is less than a majority of the principal amount of
the Debt Securities then outstanding of a series, such action may be adopted at
a meeting or reconvened meeting at which a quorum is present by the affirmative
vote of the lesser of (a) the holders of such specified percentage in principal
amount of the Debt Securities then outstanding of that series or (b) a majority
in principal amount of Debt Securities then outstanding of such series
represented and voting at the meeting. Any resolution passed or decision taken
at any meeting of holders of Debt Securities of any series duly held in
accordance with the Indenture will be binding on all holders of Debt Securities
of that series and the related coupons whether or not present or represented at
the meeting.
The quorum at a meeting of the holders of a series of Debt Securities will
be persons holding or representing a majority in principal amount of the Debt
Securities then outstanding of a series, unless otherwise specified in a
Prospectus Supplement.
The record date for purposes of determining the identity of holders
entitled to vote regarding, or consent to, actions by the Trustee and certain
waivers will be the later of (i) 30 days prior to the first solicitation of such
consent or (ii) the date of the most recent list of holders of securities
furnished to the Trustee prior to such solicitation.
NOTICES
Except as otherwise provided in the applicable Indenture, notices to
holders of Bearer Securities will be given by publication at least once in a
newspaper published on a Business Day in New York City and London and in such
other city or cities as may be required with respect to such Bearer Securities
and will be mailed to such persons whose names and addresses were previously
filed with the Trustee under the applicable Indenture, within the time
prescribed for the giving of such notice. Notices to holders of Registered
Securities will be given by mail to the address of such holders as they appear
in the Security Register.
TITLE
Title to any Bearer Securities (including Bearer Securities in permanent
global bearer form) and any coupons appertaining thereto will pass by delivery.
The Company, the appropriate Trustee and any agent of the Company or such
Trustee may treat the bearer of any Bearer Securities, the bearer of any coupon
and the registered owner of any Registered Security as the absolute owner
thereof (whether or not such Debt Security or coupon is overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all the other purposes.
DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement, the
obligations of the Company with respect to the payment of the principal of and
interest on the Offered Debt Securities and its obligations under certain
provisions of the Indenture will be terminated if: (i) the Company irrevocably
deposits or causes to be deposited with the appropriate Trustee, under the terms
of an escrow trust agreement in form and substance satisfactory to the
appropriate Trustee, as trust funds pledged as security for, and dedicated
solely to, the benefit of the holders of the Offered Debt Securities, (a) money
or (b) in the case of Offered Debt Securities and coupons denominated in United
States Dollars, U.S. Government Obligations (as defined in the Indenture), and
in the case of Offered Debt Securities and coupons denominated in a foreign
currency,
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Foreign Government Securities (as defined in the Indenture), which through the
payment of interest thereon and principal thereof in accordance with their terms
will provide money or (c) a combination of (a) and (b), in each case in an
amount sufficient to pay in the currency or currency unit in which the Offered
Debt Securities are payable all the principal of and interest on the Offered
Debt Securities on the dates such payments are due in accordance with the terms
of the Offered Debt Securities; and (ii) the Company furnishes to the
appropriate Trustee a ruling by the Internal Revenue Service, in form and
substance satisfactory to such Trustee, or an Opinion of Counsel, in form and
substance satisfactory to the appropriate Trustee, to the effect, in either
case, that the holders of such Offered Debt Securities (a) will not recognize
income, gain or loss for Federal income tax purposes as a result of the
Company's exercise of the defeasance provisions of the Indenture and (b) will be
subject to Federal income tax in the same amount, in the same manner and at the
same time as would have been the case if the Company had not exercised its
defeasance rights under the Indenture.
THE TRUSTEES
A Trustee may resign or be removed with respect to one or more series of
Debt Securities and a successor Trustee may be appointed by the Company to act
with respect to such series. In the event that two or more Persons are acting as
Trustee with respect to different series of Debt Securities under one of the
Indentures, each such Trustee will be deemed to be a Trustee of a trust under
the applicable Indenture, separate and apart from the trust administered by any
other such Trustee, and any action described herein to be taken by the "Trustee"
may then be taken by each such Trustee with respect to, and only with respect
to, the one or more series of Debt Securities for which it is Trustee.
GOVERNING LAW
The Indentures, the Debt Securities and the coupons will be governed by,
and construed in accordance with, the laws of the State of New York.
DESCRIPTION OF THE PREFERRED STOCK
The following description of Preferred Stock sets forth certain general
terms and provisions of the series of Preferred Stock to which any Prospectus
Supplement may relate. The specific terms of an offered series of Preferred
Stock will be described in the Prospectus Supplement relating to such series. If
so indicated in the Prospectus Supplement relating thereto, the terms of any
such series of Preferred Stock may differ from the terms set forth below. The
description of Preferred Stock set forth below and the description of the terms
of an offered series of Preferred Stock set forth in the Prospectus Supplement
relating thereto do not purport to be complete and are qualified in their
entirety by reference to the Company's Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), and the Certificate of Designations
relating to such offered series of Preferred Stock, which will be filed with the
Commission and incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part at or prior to the time of the sale
of such offered series.
Under the Company's Certificate of Incorporation, the Company's Board of
Directors is authorized, without further stockholder action, to provide for the
issuance of up to 100,000 shares of cumulative preferred stock, no par value, in
one or more series, with or without voting powers, and with such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions, as the Board of Directors shall
determine. Of these shares, 20,000 shares have been designated $5 Cumulative
Preferred Stock (voting) redeemable at $105 per share and entitled to $100 per
share upon dissolution. The Company has reserved for issuance and designated
25,000 shares of preferred stock as Series B Preferred Stock in connection with
the Rights Plan described below under "Description of the Common Stock -- Rights
to Purchase Series B Preferred Stock." As of the date of this Prospectus, the
Company has no outstanding shares of Preferred Stock.
15
<PAGE> 18
GENERAL
The applicable Prospectus Supplement will set forth the following specific
terms regarding the series of Preferred Stock offered thereby: (i) the
designation, number of shares and liquidation preference per share; (ii) the
initial public offering price; (iii) the dividend rate or rates, if any, or the
method of determining the dividend rate or rates; (iv) the index, if any, upon
which the amount of dividends is to be determined; (v) the dates on which
dividends will accrue and be payable and the designated record dates for
determining the holders entitled to such dividends; (vi) any redemption or
sinking fund provisions; (vii) any conversion or exchange provisions; (viii) any
provisions for the issuance of global securities; (ix) the currency (which may
be composite currency) in which liquidation preferences, redemption prices and
dividends shall be payable, if other than United States dollars; (x) voting
rights, if different from those described under "Voting Rights"; and (xi) any
additional terms, preferences or rights.
The shares of Preferred Stock will, when issued, be fully paid and
nonassessable and will have no preemptive rights.
The transfer agent, registrar, dividend disbursing agent, redemption agent
and, if applicable, conversion agent for the offered series of Preferred Stock
will be specified in the applicable Prospectus Supplement relating thereto.
DIVIDENDS
The holders of the Preferred Stock of each series offered will be entitled
to receive, when, as and if declared by the Board of Directors of the Company,
out of funds legally available therefor, cumulative or non-cumulative cash or
other dividends at such rate or rates and on such dates as will be set forth in
the applicable Prospectus Supplement. Such rates may be fixed or variable or
both. If variable, the formula used for determining the dividend rate for each
dividend period will be set forth in the Prospectus Supplement. Dividends will
be payable to the holders of record as they appear on the stock register of the
Company on such record dates, not more than 60 days nor less than ten days
preceding the payment dates thereof, as will be fixed by the Board of Directors
of the Company. If the Board of Directors of the Company fails to declare a
dividend payable on a dividend payment date on any series of Preferred Stock for
which dividends are noncumulative ("Noncumulative Preferred Stock"), then the
holders of such series of Noncumulative Preferred Stock will have no right to
receive a dividend in respect of the dividend period ending on such dividend
payment date, and the Company will have no obligation to pay a dividend for such
period, whether or not dividends on such series are declared payable on any
future dividend payment dates. Dividends payable on any series of Preferred
Stock for any period less than a full dividend period will be computed on the
basis of a 360-day year consisting of twelve 30-day months.
REDEMPTION
The offered series of Preferred Stock may be redeemable at the option of
the Company and may be subject to mandatory redemption pursuant to a sinking
fund or otherwise, in each case upon the terms, on the date or dates and at the
redemption price or prices set forth in the applicable Prospectus Supplement. If
fewer than all shares of the offered series of Preferred Stock are to be
redeemed, the shares to be redeemed will be selected by the Company pro rata or
by lot, by any other method determined by the Board of Directors to be
equitable, or by any method set forth in the applicable Prospectus Supplement.
If any dividends on shares of the offered series of Preferred Stock are in
arrears, no shares of Common Stock or shares of capital stock ranking junior to
or on parity with the offered series of Preferred Stock may be redeemed and no
shares of such offered series of Preferred Stock may be redeemed unless all
outstanding shares of such series are simultaneously redeemed, and the Company
may not purchase or otherwise acquire any shares of such series; provided,
however, that the foregoing shall not prevent the purchase or acquisition of
shares of such series pursuant to a purchase or exchange offer made on the same
terms to holders of all outstanding shares of such series.
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<PAGE> 19
Notice of redemption will be given by mailing the same to each record
holder of the shares to be redeemed to the respective addresses of such holders
as the same shall appear on the Company's stock register. Each such notice will
state: (i) the redemption date; (ii) the number of shares and series of
Preferred Stock to be redeemed; (iii) the redemption price and the manner in
which such redemption price is to be paid and delivered; (iv) the place or
places where certificates for such shares of Preferred Stock are to be
surrendered for payment of the redemption price; and (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date. If fewer
than all shares of any series of Preferred Stock held by any holder are to be
redeemed, the notice mailed to such holder will also specify the number of
shares to be redeemed from such holder.
If notice of redemption has been given, from and after the redemption date
for the shares of the series of Preferred Stock called for redemption (unless
default shall be made by the Company in providing money for the payment of the
redemption price of the shares so called for redemption), dividends on the
shares of Preferred Stock so called for redemption will cease to accrue, any
right to convert the shares of Preferred Stock will terminate, such shares will
no longer be deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Company (except the right to receive the redemption price,
without interest) will cease. Upon surrender in accordance with such notice of
the certificates representing any shares so redeemed (properly endorsed or
assigned for transfer, if the notice shall so state), the redemption price set
forth above will be paid out of funds provided by the Company. If fewer than all
of the shares represented by any such certificate are redeemed, a new
certificate will be issued representing the unredeemed shares without cost to
the holder thereof.
LIQUIDATION PREFERENCE
The applicable Prospectus Supplement will set forth the specific
liquidation preference of the offered series of Preferred Stock.
The right of the Company, and hence the right of creditors and stockholders
of the Company, to participate in any distribution of assets of any subsidiary
upon its liquidation or reorganization or otherwise is necessarily subject to
the prior claims of creditors of the subsidiary, except to the extent that
claims of the Company itself as a creditor of the subsidiary may be recognized.
CONVERSION AND EXCHANGE
The terms, if any, on which shares of any offered series of Preferred Stock
are convertible into or exchangeable for Common Stock will be set forth in the
Prospectus Supplement relating thereto. Such terms may include provisions for
conversion or exchange, either mandatory, at the option of the holder, or at the
option of the Company.
VOTING RIGHTS
Except as indicated below or in the Prospectus Supplement relating to a
particular offered series of Preferred Stock, or except as expressly required by
applicable law, the holders of Preferred Stock will not be entitled to vote.
On matters on which holders of such offered series and holders of any other
series of Preferred Stock are entitled to vote as a single class, each full
share of any series of Preferred Stock shall be entitled to one vote. Therefore,
the voting power of such series will depend on the number of shares in such
series, not the liquidation preference or initial offering price of the shares
of such series of the Preferred Stock.
17
<PAGE> 20
DESCRIPTION OF THE COMMON STOCK
The Company's Board of Directors is authorized to issue a maximum of
40,000,000 shares of Common Stock, $1.00 par value per share, under the
Company's Certificate of Incorporation. As of February 28, 1998, 25,067,226
shares of Common Stock were outstanding and 3,979,000 shares were reserved for
issuance in connection with the Company's employee benefit plans.
The following summary of the rights of the Common Stock does not purport to
be complete and is subject in all respects to the applicable provisions of the
Delaware General Corporation Law and the Certificate of Incorporation.
Dividend Rights: Subject to the prior rights, if any, of the holders of
Preferred Stock, holders of Common Stock are entitled to receive such dividends
as are declared by the Company's Board of Directors out of funds legally
available therefor.
Voting Rights: Subject to the rights, if any, of the holders of Preferred
Stock, all voting rights are vested in the holders of shares of Common Stock,
each share being entitled to one vote on all matters presented for a vote
(except for those matters for which a separate class vote is required under
Delaware law). The holders of a majority of the shares entitled to vote
constitute a quorum at any meeting of stockholders.
Liquidation Rights: Subject to the rights, if any, of the holders of
Preferred Stock, in the event of liquidation of the Company, holders of Common
Stock will share pro rata in all assets distributable to stockholders in respect
of shares held by them.
Preemptive Rights: Holders of Common Stock are not entitled to any
preemptive rights to subscribe for any additional securities that may be issued.
Non-Cumulative Voting: Holders of shares of Common Stock have
non-cumulative voting rights, which means that holders of more than 50% of the
shares voting for the election of directors can elect 100% of the directors
standing for election if they choose to do so, and, in such event, the holders
of the remaining less than 50% of the shares voting for the election of
directors will not be able to elect any person or persons to the Board of
Directors of the Company. The Company's Board of Directors is divided into three
classes, and directors are normally elected for three-year terms. One of the
classes is presented for election at each annual meeting, so that the entire
Board of Directors is never presented for election in any one year.
ChaseMellon Shareholder Services is the transfer agent and registrar for
the Common Stock.
RIGHTS TO PURCHASE SERIES B PREFERRED STOCK
The Company has adopted a stockholder rights plan (the "Rights Plan") and
declared a dividend distribution of one preferred stock purchase right, payable
to shareholders of record as of November 1, 1996 and new Common Stock
certificates issued after such date upon transfer or new issuance of Common
Stock will contain a notation incorporating the Rights Plan by reference (a
"Right"; collectively, the "Rights"). Each Right entitles the holder thereof to
purchase one two-thousandth of a share of preferred stock designated as the
Series B Preferred Stock ("Series B Preferred Stock"). The Rights will expire on
November 1, 2006, unless redeemed earlier, and will not be exercisable or
transferable separately from the shares of Common Stock until the close of
business on the Distribution Date, which will occur on the earlier of (i) the
tenth business day following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding Common Stock or (ii) the tenth business day after the commencement
or the announcement of an intention to make a tender or exchange offer that
would cause any person or group to become an Acquiring Person.
Pursuant to the Rights Plan, 25,000 shares of Series B Preferred Stock have
been designated and reserved for issuance upon exercise of the Rights. An
additional number of shares of Series B Preferred Stock equal to one
two-thousandth of the number of shares of Common Stock will be reserved for
issuance in connection with an issuance of Preferred Stock or Common Stock,
whether issued directly, upon exercise of Equity Warrants or upon conversion of
Preferred Stock or Debt Securities.
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<PAGE> 21
A description of the Rights and the Series B Preferred Stock is set forth
in the Rights Agreement between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, which is included as exhibit to the
Registration Statement of which this Prospectus is a part.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE COMPANY
As set forth above under "Description of the Preferred Stock," the Board of
Directors has the authority, without further stockholder action, to provide for
the issuance of Preferred Stock and to fix the terms thereof. Provisions which
could render a change of control of the Company more difficult, such as
extraordinary voting, dividend, redemption or conversion rights, could be
included in such Preferred Stock.
DESCRIPTION OF THE WARRANTS
The following description sets forth certain general terms and provisions
of the Debt Warrants and Equity Warrants to which a Prospectus Supplement may
relate. The particular terms of any Debt Warrants and Equity Warrants offered
will be described in the Prospectus Supplement relating to such Debt Warrants or
Equity Warrants. The following summaries of certain provisions of the Debt
Warrants and Equity Warrants and of one or more separate Warrant Agreements
(each a "Warrant Agreement") between the Company and one or more banking
institutions or trust companies, as Warrant Agent (each a "Warrant Agent"), do
not purport to be complete and are subject to and qualified in their entirety by
reference to all provisions of the applicable Warrant Agreement. Forms of
Warrant Agreements are filed as exhibits to the Registration Statement. Each
Warrant Agreement will be governed by, and construed in accordance with, the
laws of the State of New York.
GENERAL
Debt Warrants and Equity Warrants, evidenced by Warrant Certificates (the
"Warrant Certificates"), may be issued under a Warrant Agreement independently
or together with any Debt Securities, Preferred Stock or Common Stock and may be
transferable with or separate from such Securities. If Debt Warrants to purchase
Debt Securities are offered, the applicable Prospectus Supplement will describe
the terms of the Debt Warrants, including the following: (i) the offering price,
if any, including the currency, or currency unit in which such price will be
payable; (ii) the designation, aggregate principal amount and terms of the
Offered Debt Securities with which the Debt Warrants are issued and the number
of Debt Warrants issued with each such Offered Debt Security; (iii) if
applicable, the date on or after which the Debt Warrants and the related Offered
Debt Securities will be separately transferable; (iv) the designation, aggregate
principal amount and terms of Debt Securities purchasable upon exercise of one
Debt Warrant and the price or prices at which, and the currency, or currency
unit in which such principal amount of Debt Securities may be purchased upon
exercise; (v) the date on which the right to exercise the Debt Warrants
commences and the date on which such right expires; (vi) any United States
Federal income tax consequences; (vii) whether the Debt Warrants represented by
the Warrant Certificates will be issued in registered or bearer form or both;
and (viii) any other material terms of the Debt Warrants. If Equity Warrants are
offered, the applicable Prospectus Supplement will describe the terms of the
Equity Warrants, including the following: (i) the offering price, if any,
including the currency, or currency unit in which such price will be payable;
(ii) the designation of any series of Preferred Stock purchasable upon exercise
of the Equity Warrants; (iii) the number of shares of Preferred Stock or Common
Stock purchasable upon exercise of one Equity Warrant, and the price or prices
at which, and the currency, or currency unit in which such shares may be
purchased upon exercise; (iv) the date on which the right to exercise the Equity
Warrants commences and the date on which such right expires; (v) any United
States Federal income tax consequences; (vi) whether the Equity Warrants
represented by the Warrant Certificate will be issued in registered or bearer
form or both; (vii) whether the Equity Warrants or the underlying Preferred
Stock or Common Stock will be listed on any national securities exchange; and
(viii) any other material terms of the Equity Warrants. In addition, if any Debt
Warrants or Equity Warrants are sold for any foreign currency or currency units,
the restrictions, elections, tax consequences, specific terms and other
information with respect to such issue will be specified in the applicable
Prospectus Supplement.
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<PAGE> 22
Warrant Certificates, if any, may be exchanged for new Warrant Certificates
of different denominations and may (if in registered form) be presented for
registration of transfer at the corporate trust office of the Warrant Agent,
which will be listed in the applicable Prospectus Supplement, or at such other
office as may be set forth therein. Warrantholders do not have any of the rights
of holders of Debt Securities (except to the extent that the consent of
Warrantholders may be required for certain modifications of the terms of the
Indenture under which the series of Offered Debt Securities issuable upon
exercise of the Warrants are to be issued) or the Company's Preferred or Common
stockholders and are not entitled to payments of principal and interest, if any,
on Debt Securities or to dividends or other distributions made with respect to
Preferred Stock or Common Stock.
EXERCISE OF WARRANTS
Warrants may be exercised by surrendering the Warrant Certificate, if any,
at the corporate trust office or other designated office of the Warrant Agent,
with (i) the form of election to purchase on the reverse side of the Warrant
Certificate, if any, properly completed and executed, and (ii) payment in full
of the exercise price, as set forth in the applicable Prospectus Supplement.
Upon exercise of Warrants, the Warrant Agent will, as soon as practicable,
deliver the Debt Securities, Preferred Stock or Common Stock issuable upon the
exercise of the Warrants in authorized denominations in accordance with the
instructions of the exercising Warrantholder and at the sole cost and risk of
such holder. If less than all of the Warrants evidenced by the Warrant
Certificate are exercised, a new Warrant Certificate will be issued for the
remaining amount of unexercised Warrants, if sufficient time exists prior to the
expiration date.
LIMITATIONS ON THE ISSUANCE OF BEARER SECURITIES
In compliance with United States Federal tax laws and regulations, Bearer
Securities may not, in general, be offered or sold during the Restricted Period
(as defined below) to a person within the United States or to, or for the
account or benefit of, a United States person. However, offers or sales can be
made to (i) the United States office of international organizations (as defined
in Section 7701(a)(18) of the Internal Revenue Code of 1986, as amended (the
"Code") and the regulations thereunder), (ii) the United States office of
foreign central banks (as defined in Section 895 of the Code and the regulations
thereunder) and (iii) foreign branches of United States financial institutions
which are purchasing for their own account or for resale, and which have agreed
to comply with the reporting requirements of Section 165(j)(3)(A), (B) or (C) of
the Code and the regulations thereunder. In addition, sales can be made to a
United States person acquiring a Bearer Security through a financial institution
described in clause (iii) of the preceding sentence if certain certification
requirements and other conditions are satisfied. Definitive Bearer Securities
will not be delivered within the United States, or in any event unless the
beneficial owner of the Securities has complied with the certification
requirements to be described in the relevant Prospectus Supplement.
Each underwriter, dealer and agent (or other "distributor" within the
meaning of the regulations under Section 163 of the Code) participating in the
distribution of any Bearer Securities will agree that (i) it will not offer,
sell or deliver Bearer Debt Securities within the United States or to, or for
the account or benefit of, United States persons (other than qualifying
financial institutions) (a) until 40 days after the closing date or (b) at any
time if the obligation is held as part of an unsold allotment or subscription
(the "Restricted Period"), and (ii) it has in effect procedures reasonably
designed to ensure that its employees and agents who are directly engaged in
selling the Bearer Securities are aware of the restrictions described in clause
(i) of this sentence. Bearer Securities will bear a legend on their face and on
any interest coupons that may be detached therefrom or, if the obligation is
evidenced by a book entry, a legend will appear in the book of record in which
the book entry is made substantially to the following effect: "Any United States
person who holds this obligation will be subject to limitations under the United
States income tax laws, including the limitations provided in Section 165(j) and
1287(a) of the Internal Revenue Code." The Code Sections referred to in such
legend provide that a United States person who holds a Bearer Security will not
be allowed to deduct any loss realized on the sale, exchange or redemption of
such Bearer Security and any gain (which might otherwise be characterized as
capital gain) recognized on such sale, exchange or redemption will be treated as
ordinary income. If the Company issues Warrants in bearer form, they will
specify in the applicable
20
<PAGE> 23
Prospectus Supplement what, if any, restrictions or certification requirements
will be applicable to the issuance and delivery of such bearer Warrants.
As used herein, "United States person" means an individual who is a citizen
or resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, an estate or trust the income of which is subject to United
States Federal income taxation regardless of its source; a trust that is subject
to the supervision of a court within the United States and the control of a
United States person or certain electing trusts that were in existence and
treated as domestic trusts on August 19, 1996; and "United States" means the
United States of America including the States and the District of Columbia.
PLAN OF DISTRIBUTION
The Company may offer and sell the Securities in any of three ways: (i)
directly to investors; (ii) to investors through agents; or (iii) through
underwriters or dealers. The Company also may exchange Securities for
outstanding indebtedness of the Company. The applicable Prospectus Supplement
with respect to the Securities will set forth the terms of the offering of the
Securities, including the name or names of any underwriters, the purchase price
of the Securities and the proceeds to the Company from such sale, any
underwriting discounts and other items constituting underwriters' compensation,
any initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on which such
Securities may be listed.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
Securities may be either offered to the public through underwriting syndicates
represented by managing underwriters, or directly by one or more underwriters.
Unless otherwise set forth in the applicable Prospectus Supplement, the
obligations of the underwriters to purchase the Securities will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all the Securities if any are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Except for Common Stock, each issue of Securities sold will be a new issue
of securities with no established trading market. Any underwriters or agents
with respect to an issue of Securities may make a market in such Securities, but
such underwriters or agents will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can be given as to
the liquidity of any Securities in the secondary market.
If the Securities are issued in exchange for outstanding securities of the
Company, the applicable Prospectus Supplement will set forth the terms of the
exchange, the identity of and the terms of sale of the Securities by the selling
security holders.
Securities may be sold directly by the Company or through agents designated
by the Company from time to time. Any agent involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by the Company to such agent will be set forth, in the
applicable Prospectus Supplement. Unless otherwise indicated in the applicable
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase the Securities from the Company at the public offering
price set forth in the applicable Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
applicable Prospectus Supplement and the applicable Prospectus Supplement will
set forth the commission payable for solicitation of such contracts.
Agents, selling security holders and underwriters may be entitled under
agreements entered into with the Company to indemnification by the Company
against certain civil liabilities, including certain liabilities under the
Securities Act of 1933, or to contribution with respect to payments which the
agents, selling security
21
<PAGE> 24
holders or underwriters may be required to make in respect thereof. Agents,
selling security holders and underwriters may be customers of, engage in
transactions with, or perform services for the Company in the ordinary course of
business.
EXPERTS
The Consolidated Financial Statements of Texas Industries, Inc. as of May
31, 1995, 1996 and 1997, and for each of the three fiscal years then ended,
appearing in this Prospectus and the registration statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the Securities offered hereby will be
passed upon for the Company by Locke Purnell Rain Harrell (A Professional
Corporation), Dallas, Texas.
22
<PAGE> 25
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 ANY OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS Subject to Completion, Dated June 1, 1998
- --------------------------------------------------------------------------------
Preferred Securities
TXI CAPITAL TRUST I
<TABLE>
<S> <C> <C>
% Shared Preference Redeemable Securities ("SPuRS"(SM))
(Liquidation Preference $50 per Preferred Security)
fully and unconditionally guaranteed by
and convertible into the common stock of
TXI Logo TEXAS INDUSTRIES, INC.
</TABLE>
- --------------------------------------------------------------------------------
The % Shared Preference Redeemable Securities (the "SPuRS" or "Preferred
Securities") offered hereby represent preferred undivided beneficial interests
in the assets of TXI Capital Trust I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"). Texas Industries, Inc., a
Delaware corporation ("TXI" or the "Company"), will own all the common
securities (the "Common Securities" and, together with the Preferred Securities,
the "Trust Securities") representing undivided beneficial interests in the
assets of the Trust. The Trust exists for the sole purpose of issuing the
Preferred Securities and the Common Securities and investing the proceeds
thereof in an equivalent amount of % Convertible Subordinated Debentures due
2028 (the "Convertible Subordinated Debentures") of TXI.
(continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE CIRCUMSTANCES DURING WHICH
PAYMENTS OF DISTRIBUTIONS OF THE PREFERRED SECURITIES MAY BE DEFERRED AND THE
RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
Application has been made for the listing of the SPuRS on the New York Stock
Exchange (the "NYSE").
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.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions(2)(3) Trust(3)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Per Preferred Security $ $ $
- ------------------------------------------------------------------------------------------------------
Total(4) $ $ $
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued distributions, if any, from , 1998.
(2) TXI and the Trust have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the SPuRS will be
invested in Convertible Subordinated Debentures, TXI has agreed to pay to
the Underwriters as compensation for their arranging the investment therein
of such proceeds $ per Preferred Security (or $ in the aggregate). See
"Underwriting."
(4) The Trust has granted the Underwriters an option exercisable within 30 days
from the date of this Prospectus to purchase up to [ ] additional SPuRS
on the same terms and conditions set forth above to cover over-allotments,
if any. If all such additional SPuRS are purchased, the total Price to
Public and Proceeds to the Trust will be $ .
------------------------
The SPuRS are being offered by the Underwriters as set forth under
"Underwriting" herein. It is expected that the delivery of the certificates
therefor will be made in book-entry form through the book-entry facilities of
The Depository Trust Company on or about , 1998.
The date of this Prospectus is , 1998.
<PAGE> 26
(Cover page continued)
The Convertible Subordinated Debentures will be unsecured obligations of
TXI and will be subordinate and junior in right of payment to certain other
indebtedness of TXI, as described herein.
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $50 per
Preferred Security, accruing from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing , 1998 (the "Distributions"). The payment of
Distributions out of funds held by the Trust, and payments on liquidation of the
Trust or the redemption of Preferred Securities, as set forth below, are
guaranteed by TXI (the "Preferred Securities Guarantee") to the extent the Trust
has funds available therefor as described under "Description of Preferred
Securities Guarantee." The Preferred Securities Guarantee, when taken together
with TXI's obligations under the Convertible Subordinated Debentures, the
Indenture (as defined herein) and the Trust Agreement (as defined herein),
including its obligations under the Indenture to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Securities), will
provide a full and unconditional guarantee of amounts due on the Preferred
Securities. TXI's obligations under the Preferred Securities Guarantee are
subordinate and junior in right of payment to all other liabilities of TXI and
will be pari passu with the most senior preferred stock now or hereafter issued
by TXI and with any guarantee now or hereafter issued by TXI in respect of any
preferred security of any affiliate of TXI.
The distribution rate and the distribution and other payment dates for the
Preferred Securities will correspond to the interest rate and interest and other
payment dates on the Convertible Subordinated Debentures, which will be the sole
asset of the Trust. As a result, if principal or interest is not paid on the
Convertible Subordinated Debentures, no amounts will be paid on the Preferred
Securities. If TXI does not make principal or interest payments on the
Convertible Subordinated Debentures, the Trust will not have sufficient funds to
make Distributions on the Preferred Securities. In such event, the Preferred
Securities Guarantee will not apply to such Distributions until the Trust has
sufficient funds available therefor.
TXI has the right to defer payments of interest on the Convertible
Subordinated Debentures by extending the interest payment period on the
Convertible Subordinated Debentures for up to 20 consecutive quarters (each, an
"Extension Period"), provided that no Extension Period may extend beyond the
maturity of the Convertible Subordinated Debentures. Despite such deferral,
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at an annual rate of %, compounded quarterly,
and during any Extension Period holders of Preferred Securities will be required
to include deferred interest income in their gross income for United States
federal income tax purposes in advance of receipt of the cash Distributions with
respect to such deferred interest payments. There could be multiple Extension
Periods of varying lengths throughout the term of the Convertible Subordinated
Debentures. See "Description of the Convertible Subordinated
Debentures -- Option to Extend Interest Payment Period," "Risk Factors --
Possible Adverse Effects from Extension of Interest Payment Period," "Certain
Federal Income Tax Consequences -- Interest Income and Original Issue Discount"
and "Certain Federal Income Tax Consequences -- Premium and Market Discount."
Each Preferred Security is convertible at the option of the holder thereof
into shares of common stock, par value $1.00 per share, of TXI (the "TXI Common
Stock") at a conversion rate of shares of TXI Common Stock for each
Preferred Security (equivalent to a conversion price of $ per share of TXI
Common Stock), subject to adjustment in certain circumstances. The TXI Common
Stock is quoted on the NYSE under the symbol "TXI." On , 1998, the
last reported sale price of the TXI Common Stock on the NYSE Composite Tape was
$ .
The Convertible Subordinated Debentures are redeemable by TXI (in whole or
in part) from time to time, on or after , 2001, or at any time in certain
circumstances upon the occurrence of a Tax Event (as defined herein). If TXI
redeems the Convertible Subordinated Debentures, the Trust must redeem Trust
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Convertible Subordinated Debentures so redeemed at $50
per Preferred Security plus accrued and unpaid Distributions thereon (the
"Redemption Price") to the date fixed for redemption. See "Description of
Convertible
<PAGE> 27
Subordinated Debentures -- Mandatory Redemption." The Preferred Securities will
be redeemed upon maturity of the Convertible Subordinated Debentures. The
Convertible Subordinated Debentures mature on , 2028 (such date, as
it may be advanced as described herein, the "Stated Maturity"). In addition,
upon the occurrence of a Special Event (as defined herein) arising from a change
in law or a change in legal interpretation, unless the Convertible Subordinated
Debentures are redeemed in the limited circumstances described herein, the Trust
will be dissolved with the result that the Convertible Subordinated Debentures
will be distributed to the holders of the Trust Securities on a pro rata basis,
in lieu of any cash Distribution. In the case of a Special Event that is a Tax
Event, TXI will have the right in certain circumstances to redeem the
Convertible Subordinated Debentures, which would result in the redemption by the
Trust of the Trust Securities in the same amount on a pro rata basis. If the
Convertible Subordinated Debentures are distributed to the holders of the
Preferred Securities, TXI will use its best efforts to have the Convertible
Subordinated Debentures listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed. See "Description of the
Preferred Securities -- Special Event Redemption or Distribution" and
"Description of the Convertible Subordinated Debentures."
In the event of the voluntary or involuntary dissolution, winding up or
termination of the Trust, the holders of the Preferred Securities will be
entitled to receive, for each Preferred Security, a liquidation amount of $50
plus accrued and unpaid Distributions thereon (including interest thereon) to
the date of payment, unless in connection with such dissolution, the Convertible
Subordinated Debentures are distributed to the holders of the Preferred
Securities. See "Description of the Preferred Securities -- Liquidation
Distribution Upon Dissolution."
<PAGE> 28
---------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE PREFERRED
SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN THE PREFERRED SECURITIES AND THE IMPOSITION OF A PENALTY BID
DURING AND AFTER THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
2
<PAGE> 29
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with (i) Management's Discussion and Analysis of Financial
Condition and Results of Operations and (ii) the Consolidated Financial
Statements and Notes thereto and the more detailed information appearing
elsewhere in this Prospectus or incorporated herein by reference. Unless the
context otherwise requires, references to the "Company" or "TXI" mean Texas
Industries, Inc. and its direct and indirect subsidiaries. Except as otherwise
indicated, all information in this Prospectus assumes that the Underwriters'
over-allotment option is not exercised. All financial and share data in this
Prospectus have been adjusted to give effect to the two-for-one stock split
effected on February 3, 1997. All references to a particular fiscal year refer
to the 12 months ended on May 31 of the year referenced (e.g., fiscal 1997 means
the fiscal year ended May 31, 1997).
THE COMPANY
GENERAL
TXI is a leading supplier of construction materials through two business
segments: cement, aggregate and concrete products (the "CAC" segment); and
structural steel and specialty bar products (the "Steel" segment). The Company
is the largest producer of cement in Texas and the second largest supplier of
structural steel products in North America. Demand for structural steel, cement,
aggregate and concrete products is primarily driven by construction activity,
while specialty bar products supply the original equipment manufacturer, tool
and oil country goods markets. From fiscal 1994 to fiscal 1997, TXI's net sales
and net income have grown at a compound annual rate of 11% and 43%,
respectively. For the 12 months ended February 28, 1998, the Company generated
$1.1 billion in net sales and $94.3 million in net income.
The Company is the only major North American producer of both cement and
steel. TXI has derived significant benefits therefrom, primarily in lowering
production costs and enhancing productivity through the innovative recycling of
by-products of manufacturing. The Company has extensive operating experience in
both of its business segments. Founded in 1951, the Company began its cement
operations in 1960 with the opening of its Midlothian, Texas facility and added
its steel operations in 1975 with the construction of a plant in Midlothian.
BUSINESS STRATEGY
The Company's business strategy is to grow profitably in both of its
business segments by achieving and maintaining market leadership positions in
desirable markets, capitalizing on innovation in manufacturing processes and
products, being the low cost supplier, pursuing strategic growth opportunities
and preserving financial strength and flexibility in order to capitalize on
these opportunities when they arise.
The key elements of the Company's strategy are:
Achieve and Maintain Market Leadership. The Company strives to be the
number one or two supplier in desirable markets. The Company is:
- The largest producer of cement in Texas and a major cement producer in
California, the two largest cement markets in the U.S.
- The second largest supplier of structural steel products in North
America.
- The largest supplier of light weight steel beams used in manufactured
housing in North America.
- The largest supplier of expanded shale and clay aggregate products west
of the Mississippi River.
- The largest supplier of stone, sand and gravel aggregate products and the
second largest supplier of ready-mix concrete in North Texas.
- The largest supplier of sand and gravel aggregate products and ready-mix
concrete in Louisiana.
3
<PAGE> 30
Capitalize on Innovation in Manufacturing Processes and Products. The
Company emphasizes the development and improvement of manufacturing process
technologies and the design and marketing of new products. Research and
development of manufacturing processes and products is considered to be every
employee's responsibility at TXI. All employees are empowered to seek and
implement creative ideas to improve operations and results.
- TXI pioneered and is a leader in the manufacture of wide flange beams and
other structural steel products using recycled steel.
- TXI developed and patented near net shape casting, a process which
provides energy and capital cost savings in the making of wide flange
beams and other structural steel products.
- TXI developed and patented the CemStar process, which uses a co-product
from steel-making to increase cement production with little additional
cost. TXI continues to research and refine processes for the recovery and
recycling of waste and the by-products generated by manufacturing
processes.
- TXI continues to develop new, higher-margin products, such as Bantam
Beams and Diamond Pro professional groundskeeping products.
Be the Low Cost Supplier. The Company's focus on market leadership is
accompanied by its determination to drive down production and distribution costs
in order to be the low cost supplier to its customers.
- TXI operates the largest steel shredder in the world, currently supplying
42% of its total steel raw material needs. The shredder enables the
Company to access a continuous source of low cost, unprocessed scrap
steel in order to reduce costs and exposure to increasing prices for
higher grade recycled steel.
- TXI is a leader in substituting alternative fuels for the nonrenewable
fuels typically used in the energy intensive cement manufacturing
process. The Company lowers cement manufacturing costs both by reducing
expenditures for the nonrenewable fuels and by receiving income for the
management of alternative fuels received from third party generators of
such fuels.
Pursue Strategic Growth Opportunities. The Company pursues profitable
growth by building on its business and operational expertise in order to enter
new markets and introduce new products.
- A structural steel facility being constructed in Virginia will combine a
steel shredder, near net shape casting, state-of-the-art steel melting
technology and a proprietary rolling mill design to achieve low
production costs and the widest structural steel product range available
from a single facility.
- The acquisition of Riverside Cement Company ("Riverside") provides TXI
access to California, the largest cement market in the U.S. The Company
intends to implement its CemStar process at Riverside in the near term to
enhance productivity and increase capacity. The Company also intends to
upgrade and modernize Riverside's existing portland cement plant with
higher capacity and more cost efficient equipment in order to move into a
position of leadership in the California regional market.
- TXI intends to increase its Midlothian cement capacity from 1.3 million
to 2.8 million tons per year in order to maintain and enhance its
position as the largest producer of cement in Texas.
- TXI is upgrading its specialty bar products capability to further improve
product mix and increase the breadth of markets addressed.
- TXI has embarked on a program to license its CemStar process to cement
producers throughout the world.
- TXI continues to pursue investments for internal growth and opportunistic
acquisitions in order to build on leadership positions in its stone, sand
and gravel, expanded shale and clay and concrete operations.
Preserve Financial Strength and Flexibility. The Company strives to be
financially positioned to pursue profitable growth opportunities as they arise.
TXI expects that the proceeds from the sale of the Convertible Subordinated
Debentures will enable the Company to maintain its commitment to a strong
financial position and pursue its business strategy on a sound financial basis.
TXI(TM), CemStar (SM), Bantam Beams(TM) and Diamond Pro(TM) are registered
trademarks and service marks of the Company.
4
<PAGE> 31
RECENT DEVELOPMENTS
On December 31, 1997, the Company acquired the 15.7% separate public
ownership of Chaparral Steel Company ("Chaparral") consisting of approximately
4.5 million publicly traded shares. The Company agreed to pay approximately
$77.1 million in this transaction, including transaction expenses. With the
acquisition of these shares, TXI's net income will no longer be reduced by the
minority interest.
On December 31, 1997, the Company acquired Riverside, the owner of a 1.3
million ton per year portland cement plant and a 100,000 ton per year specialty
white cement plant. The acquisition increased TXI's cement capacity by 60% and
opened the California regional cement market to the Company. With the
acquisition of Riverside, the Company ranks seventh among all domestic cement
producers and becomes the third largest U.S. publicly traded cement producing
company.
TXI is constructing a structural steel facility in Virginia, scheduled to
begin operations in the summer of 1999, which will expand TXI's steel production
capacity by approximately 60%. In March 1998, TXI filed for a permit to expand
its Midlothian, Texas cement plant's annual production from 1.3 million to 2.8
million tons, and the Company anticipates upgrading its portland cement plant in
California in the next several years.
The Company's principal executive offices are located at 1341 West
Mockingbird Lane, Dallas, Texas 75247-6913, and its telephone number is (972)
647-6700.
TXI CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law pursuant
to the filing of a certificate of trust with the Delaware Secretary of State on
May 26, 1998. The Trust's business is defined in a Trust Agreement, executed by
TXI, as Depositor (the "Depositor"), the Administrative Trustees (as defined
herein) and the Delaware Trustee (as defined herein). The Trust Agreement will
be amended and restated in its entirety (as so amended and restated, the "Trust
Agreement") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Trust Agreement will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Upon issuance of the Preferred Securities, the
purchasers thereof will own all of the Preferred Securities. TXI will acquire
all of the Common Securities in an aggregate liquidation amount equal to %
of the total capital of the Trust. 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 the Trust
Securities in the Convertible Subordinated Debentures and (iii) engaging in only
those other activities necessary or incidental thereto.
The Trust's business and affairs will be conducted by trustees appointed by
TXI, as holder of the Common Securities. The duties and obligations of the
trustees will be governed by the Trust Agreement. Pursuant to the Trust
Agreement, there will be three individual trustees (the "Administrative
Trustees"), one property trustee (the "Property Trustee") and one trustee having
its principal place of business or residence in the State of Delaware (the
"Delaware Trustee"). The three Administrative Trustees will be persons who are
employees or officers of, or affiliated with, TXI. The Property Trustee will be
a financial institution which is unaffiliated with TXI and will serve as
property trustee under the Trust Agreement and as indenture trustee for purposes
of the Trust Indenture Act (the "Indenture Trustee"). The First National Bank of
Chicago will act as the Property Trustee and Indenture Trustee until removed or
replaced by the holder of the Common Securities, and also will act as trustee
under the Preferred Securities Guarantee (the "Preferred Guarantee Trustee").
See "Description of the Preferred Securities Guarantee." In certain
circumstances, the holders of a majority of the Preferred Securities will be
entitled to appoint one Administrative Trustee (a "Special Administrative
Trustee"), who need not be an officer or employee of, or otherwise affiliated
with, TXI. See "Description of the Preferred Securities -- Voting Rights."
The Property Trustee will hold title to the Convertible Subordinated
Debentures for the benefit of the holders of the Trust Securities and will have
the power to exercise all rights, powers and privileges under the Indenture (as
defined herein) as the holder of the Convertible Subordinated Debentures. In
addition, the Property Trustee will maintain exclusive control of a segregated
non-interest bearing bank account (the "Property Account") to hold all payments
made in respect of the Convertible Subordinated Debentures for
5
<PAGE> 32
the benefit of the holders of Trust Securities. The Property Trustee will make
payments of Distributions and payments on liquidation, redemption and otherwise
to the holders of the Trust Securities out of funds from the Property Account.
The Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for
the benefit of the holders of the Preferred Securities. Subject to the right of
the holders of the Preferred Securities to appoint a Special Administrative
Trustee, TXI, as the holder of all the Common Securities, will have the right to
appoint, remove or replace any Administrative Trustee and to increase the number
of Administrative Trustees, provided that the number of Administrative Trustees
shall be at least three. TXI will pay all fees and expenses related to the Trust
and the offering of the Trust Securities. See "Description of the Convertible
Subordinated Debentures -- Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are as set forth in the Trust
Agreement, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
The office of the Delaware Trustee in the State of Delaware is c/o First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801. The
principal place of business of the Trust is c/o Texas Industries, Inc., 1341
West Mockingbird Lane, Dallas, Texas 75247-6913 (telephone number (972)
647-6700).
THE OFFERING
Preferred Securities
Offered.................... % Shared Preference Redeemable Securities
evidencing preferred undivided beneficial interests
in the assets of the Trust.
Distributions.............. Holders of the Preferred Securities are entitled to
receive cumulative cash distributions at an annual
rate of % of the liquidation amount of $50 per
Preferred Security, accruing from the date of
original issuance and payable quarterly in arrears
on March 31, June 30, September 30 and December 31
of each year commencing on , 1998.
The distribution rate and the distribution and
other payment dates for the Preferred Securities
will correspond to the interest rate and interest
and other payment dates on the Convertible
Subordinated Debentures, which will be the sole
asset of the Trust. As a result, if principal or
interest is not paid on the Convertible
Subordinated Debentures, no payments will be paid
on the Preferred Securities. See "Description of
the Preferred Securities."
Liquidation Preference..... $50 per Preferred Security, and all accrued and
unpaid Distributions.
Convertible Subordinated
Debentures............... The Trust will invest the proceeds from the
issuance of the Preferred Securities and Common
Securities in an equivalent amount of %
Convertible Subordinated Debentures due 2028 of
TXI. The Convertible Subordinated Debentures will
be subordinate and junior in right of payment to
all Senior Indebtedness (as defined herein) of TXI.
In addition, because TXI is a holding company, its
obligations under the Convertible Subordinated
Debentures will be effectively subordinated to all
existing and future liabilities of its
subsidiaries. See "Description of the Convertible
Subordinated Debentures -- Subordination."
Preferred Securities
Guarantee.................. Payment of Distributions out of funds held by the
Trust and payments on liquidation of the Trust or
the redemption of Preferred Securities are
guaranteed by TXI to the extent the Trust has funds
available therefor. If TXI does not make principal
or interest payments on the Convertible
Subordinated Debentures, the Trust will not have
sufficient funds to make Distributions on the
Preferred Securities, in which event the Preferred
Securities Guarantee will not apply to such
Distributions until
6
<PAGE> 33
the Trust has sufficient funds available therefor.
See "Description of the Preferred Securities
Guarantee" and "Effect of Obligations Under the
Convertible Subordinated Debentures and the
Preferred Securities Guarantee." The obligations of
TXI under the Preferred Securities Guarantee are
subordinate and junior in right of payment to all
other liabilities of TXI and will be pari passu
with the most senior preferred stock now or
hereafter issued by TXI and with any guarantee now
or hereafter issued by TXI in respect of any
preferred security of any affiliate of TXI. In
addition, because TXI is a holding company, its
obligations under the Preferred Securities
Guarantee are effectively subordinated to all
existing and future liabilities of its
subsidiaries. The Preferred Securities Guarantee,
when taken together with TXI's obligations under
the Convertible Subordinated Debentures, the
Indenture and the Trust Agreement, including its
obligations to pay costs, expenses, debts and
liabilities of the Trust (other than with respect
to the Common Securities), will provide a full and
unconditional guarantee of amounts due on the
Preferred Securities. See "Risk
Factors -- Subordination of Preferred Securities
Guarantee and Convertible Subordinated Debentures"
and "Description of the Preferred Securities
Guarantee."
Option to Extend Interest
Payment Period........... TXI has the right at any time, so long as no
Indenture Event of Default (as herein defined) has
occurred and is continuing, to defer payment of
interest on the Convertible Subordinated Debentures
by extending the interest payment period on the
Convertible Subordinated Debentures for up to 20
consecutive quarters. If interest payments on the
Convertible Subordinated Debentures are so
deferred, Distributions on the Preferred Securities
also will be deferred. During any deferral,
Distributions will continue to accrue with interest
thereon (to the extent permitted by law) as
described herein. There could be multiple Extension
Periods of varying lengths throughout the term of
the Convertible Subordinated Debentures. During an
Extension Period, holders of Preferred Securities
will be required to include deferred interest
income in their gross income in advance of receipt
of the cash Distributions attributable thereto. See
"Description of the Convertible Subordinated
Debentures -- Option to Extend Interest Payment
Period," "Certain Federal Income Tax
Consequences -- Interest Income and Original Issue
Discount" and "Certain Federal Income Tax
Consequences -- Premium and Market Discount."
Conversion into TXI Common
Stock.................... Each Preferred Security is convertible in the
manner described below at the option of the holder,
at any time, into shares of TXI Common Stock at the
rate of shares of TXI Common Stock for
each Preferred Security (equivalent to a conversion
price of $ per share of TXI Common Stock), subject
to adjustment in certain circumstances. A holder of
Preferred Securities wishing to exercise its
conversion right shall surrender any or all of such
Preferred Securities, together with an irrevocable
conversion notice, to the paying, conversion and
exchange agent acting on behalf of the holders of
Preferred Securities (the "Conversion Agent") which
shall exchange the Preferred Securities for a
portion (equal to the aggregate liquidation
preference of the Preferred Securities being so
converted) of the Convertible Subordinated
Debentures held by the Trust and immediately
convert such Convertible Subordinated Debentures
into TXI Common Stock. A holder generally
7
<PAGE> 34
will not recognize taxable gain or loss upon the
exchange through the Conversion Agent of the
Preferred Securities for a proportionate share of
the Convertible Subordinated Debentures, followed
immediately thereafter by the conversion of the
Convertible Subordinated Debentures into TXI Common
Stock. See "Certain Federal Income Tax
Consequences -- Conversion of Preferred Securities
Into TXI Common Stock."
Redemption................. The Convertible Subordinated Debentures are
redeemable by TXI (in whole or in part) from time
to time, on or after , 2001, or at
any time upon the occurrence of a Tax Event. If the
Convertible Subordinated Debentures are redeemed,
the Trust must redeem Preferred Securities having
an aggregate liquidation amount equal to the
aggregate principal amount of the Convertible
Subordinated Debentures so redeemed. The Preferred
Securities will be redeemed upon maturity of the
Convertible Subordinated Debentures which will
occur on , 2028. See "Description of
the Preferred Securities -- Mandatory Redemption."
Voting Rights.............. Generally, the holders of the Preferred Securities
will not have any voting rights. Subject to certain
conditions, the holders of a majority in aggregate
liquidation amount of the Preferred Securities have
the right to direct the time, method and place of
conducting any proceeding for any remedy available
to the Property Trustee, or to direct the exercise
of any trust or power conferred upon the Property
Trustee under the Trust Agreement including the
right to direct the Property Trustee, as holder of
the Convertible Subordinated Debentures, to (i)
direct the time, method or place of conducting any
proceeding for any remedy available to the
Indenture Trustee or exercise any trust or power
conferred on the Indenture Trustee with respect to
the Convertible Subordinated Debentures: (ii) waive
any past Indenture Event of Default that is
available under the Indenture; (iii) exercise any
right to rescind or annul a declaration that the
principal of all the Convertible Subordinated
Debentures shall be due and payable; or (iv)
consent to any amendment, modification or
termination of the Indenture or the Convertible
Subordinated Debentures where such consent shall be
required. See "Description of the Preferred
Securities -- Voting Rights."
Conditional Right to
Advance Maturity........... If a Tax Event occurs, then TXI will have the
right, prior to the dissolution of the Trust, to
advance the Stated Maturity of the Convertible
Subordinated Debentures to the minimum extent
required in order to allow for the payments of
interest in respect of the Convertible Subordinated
Debentures to continue to be tax deductible, but in
no event shall the resulting maturity of the
Convertible Subordinated Debentures be less than 15
years from the date of original issuance thereof.
The Stated Maturity shall be advanced only if, in
the opinion of counsel to TXI experienced in such
matters, (i) after advancing the Stated Maturity,
interest paid on the Convertible Subordinated
Debentures will be deductible for United States
federal income tax purposes and (ii) advancing the
Stated Maturity will not result in a taxable event
to holders of the Preferred Securities. See
"Description of the Convertible Subordinated
Debentures -- General" and "Description of the
Convertible Subordinated Debentures -- Mandatory
Redemption."
8
<PAGE> 35
Distribution of Convertible
Subordinated
Debentures............... TXI, as the holder of the outstanding Common
Securities of the Trust, has the right, exercisable
at any time, to terminate the Trust and, after
satisfaction of the liabilities of the Trust to
creditors, to cause the Convertible Subordinated
Debentures to be distributed to the holders of the
Preferred Securities in liquidation of the Trust.
See "Description of Convertible Subordinated
Debentures."
9
<PAGE> 36
SUMMARY CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEARS ENDED MAY 31, FEBRUARY 28,
------------------------------ -------------------------
1995 1996 1997 1997 1998
-------- -------- -------- ---------- ------------
(IN THOUSANDS EXCEPT DATA PER COMMON SHARE)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net sales.................................... $830,526 $967,449 $973,824 $ 696,936 $ 861,168
Costs and expenses (income)
Cost of products sold...................... 681,824 756,715 767,030 554,956 683,116
Selling, general and administrative........ 58,275 68,852 76,535 56,006 67,798
Interest................................... 20,117 19,960 18,885 14,165 14,418
Other income............................... (7,571) (13,119) (11,848) (7,169) (10,603)
-------- -------- -------- ---------- ----------
752,645 832,408 850,602 617,958 754,729
-------- -------- -------- ---------- ----------
Income before the following items............ 77,881 135,041 123,222 79,978 106,439
Income taxes................................. 25,700 47,256 41,189 26,767 35,252
-------- -------- -------- ---------- ----------
52,181 87,785 82,033 52,211 71,187
Minority interest in Chaparral(1)............ (4,164) (7,831) (6,559) (4,298) (4,400)
-------- -------- -------- ---------- ----------
Net income................................... $ 48,017 $ 79,954 $ 75,474 $ 47,913 $ 66,787
======== ======== ======== ========== ==========
PER SHARE DATA:
Basic
Average common shares...................... 24,567 22,203 21,751 22,012 21,066
Net income per common share................ $ 1.96 $ 3.61 $ 3.48 $ 2.18 $ 3.18
======== ======== ======== ========== ==========
Diluted
Average common shares...................... 24,817 22,682 22,163 22,457 21,717
Net income per common share................ $ 1.94 $ 3.53 $ 3.42 $ 2.14 $ 3.08
======== ======== ======== ========== ==========
Cash dividends per common share.............. $ 0.15 $ 0.20 $ 0.25 $ 0.18 $ 0.23
OTHER DATA:
EBITDA(2).................................... $147,340 $204,281 $196,016 $ 134,122 $ 165,858
Capital expenditures......................... 48,751 79,300 85,188 65,262 344,335
Long-term debt to total capitalization (at
end of
period).................................... 35.1% 27.6% 28.0% 30.3% 41.6%
</TABLE>
<TABLE>
<CAPTION>
FEBRUARY 28,
MAY 31, 1998
------------------------------ ------------
1995 1996 1997 ACTUAL
-------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Net working capital.......................... $187,603 $219,345 $242,994 $ 221,532
Total assets................................. 753,055 801,063 847,923 1,117,368
Long-term debt............................... 185,274 160,209 176,056 369,404
Shareholders' equity......................... 343,109 420,022 452,811 517,549
</TABLE>
- ---------------
(1) On December 31, 1997, TXI acquired the 15.7% in Chaparral previously held by
public shareholders.
(2) EBITDA is earnings before interest, income taxes, depreciation and
amortization. EBITDA should not be considered as an alternative to income
from operations or cash flow from operating activities (each determined in
accordance with generally accepted accounting principles).
10
<PAGE> 37
RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the
Preferred Securities offered by this Prospectus. Certain statements contained
hereunder under "Prospectus Summary," "Risk Factors," "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and "Business" or
contained in the documents incorporated herein by reference, including those
concerning the Company's strategy and growth plans, contain certain
forward-looking statements concerning the Company's operations, economic
performance and financial condition. Because such statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. Factors that could cause such
differences include, but are not limited to, those discussed below.
RISKS RELATING TO THE PREFERRED SECURITIES
Subordination of Preferred Securities Guarantee and Convertible Subordinated
Debentures
TXI's obligations under the Preferred Securities Guarantee are subordinate
and junior in right of payment to all liabilities of TXI and will be pari passu
with the most senior preferred stock now or hereafter issued by TXI and with any
guarantee now or hereafter issued by TXI in respect of any preferred securities
of any affiliate of TXI. The obligations of TXI under the Convertible
Subordinated Debentures are subordinate and junior in right of payment to all
present and future Senior Indebtedness of TXI. At February 28, 1998, Senior
Indebtedness of TXI aggregated approximately $382.8 million. In addition,
because TXI is a holding company, its obligations under the Preferred Securities
Guarantee and the Convertible Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of its subsidiaries. There
are no terms in the Preferred Securities, the Convertible Subordinated
Debentures or the Preferred Securities Guarantee that limit TXI's ability to
incur additional indebtedness, including indebtedness that ranks senior to the
Convertible Subordinated Debentures or the Preferred Securities Guarantee. See
"Description of the Preferred Securities Guarantee" and "Description of the
Convertible Subordinated Debentures -- Subordination."
Limitation of Rights under the Preferred Securities Guarantee
The Preferred Securities Guarantee guarantees to the holders of the
Preferred Securities the payment of: (i) any accrued and unpaid Distributions
that are required to be paid on the Preferred Securities, to the extent the
Trust shall have funds available therefor, (ii) the Redemption Price, including
all accrued and unpaid Distributions with respect to Preferred Securities called
for redemption by the Trust, to the extent the Trust has funds available
therefor; and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Trust (other than in connection with the distribution of
Convertible Subordinated Debentures to the holders of Preferred Securities or a
redemption of all of the Preferred Securities), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Trust has funds
available therefor and (b) the amount of assets of the Trust remaining available
for distribution to holders of the Preferred Securities in liquidation of the
Trust. The holders of a majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee or to
direct the exercise of any trust or power conferred upon the Preferred Guarantee
Trustee under the Preferred Securities Guarantee. Any holder of Preferred
Securities may institute a legal proceeding directly against TXI to enforce such
holder's rights under the Preferred Securities Guarantee, without first
instituting a legal proceeding against the Trust, the Preferred Guarantee
Trustee or any other person or entity. If TXI were to default in its obligation
to pay amounts payable on the Convertible Subordinated Debentures, the Trust
would lack available funds for the payment of Distributions or amounts payable
on redemption of the Preferred Securities or otherwise, and in such event
holders of the Preferred Securities would not be able to rely upon the Preferred
Securities Guarantee for payment of such amounts. Instead, holders of the
Preferred Securities would rely on the enforcement by the Property Trustee of
its rights as registered holder of the Convertible Subordinated Debentures
against TXI pursuant to the terms of the Convertible Subordinated Debentures and
may also vote to appoint a Special Administrative Trustee, who shall have the
same rights,
11
<PAGE> 38
powers and privileges as the other Administrative Trustees. If the Property
Trustee fails to enforce its rights under the Convertible Subordinated
Debentures, a holder of Preferred Securities may institute a legal proceeding
directly against TXI to enforce the Property Trustee's rights under the
Convertible Subordinated Debentures without first instituting any legal
proceeding against the Property Trustee or any other person or entity, including
the Trust. Notwithstanding the foregoing, if a Trust Agreement Event of Default
has occurred and is continuing and such event is attributable to the failure of
TXI to pay interest or principal on the Convertible Subordinated Debentures on
the date such interest or principal is otherwise payable (or in the case of
redemption, the redemption date), then a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Convertible Subordinated Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Convertible Subordinated Debentures. See "Description of the Preferred
Securities Guarantee -- Events of Default" and "Description of the Preferred
Securities Guarantee -- Status of the Preferred Securities Guarantee" and
"Description of the Convertible Subordinated Debentures -- Subordination." The
Trust Agreement provides that each holder of Preferred Securities by acceptance
thereof agrees to the provisions of the Preferred Securities Guarantee and the
Indenture.
Enforcement of Certain Rights by Holders of Preferred Securities
If (i) the Trust fails to pay Distributions in full on the Preferred
Securities for six consecutive quarterly distribution periods or (ii) a Trust
Agreement Event of Default occurs and is continuing, then the holders of
Preferred Securities would rely on the enforcement by the Property Trustee of
its rights against TXI as a holder of the Convertible Subordinated Debentures.
In addition, the holders of a majority in aggregate liquidation amount of the
Preferred Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee
under the Trust Agreement, including the right to direct the Property Trustee to
exercise the remedies available to it as a holder of the Convertible
Subordinated Debentures. If the Property Trustee fails to enforce its rights
under the Convertible Subordinated Debentures, a holder of Preferred Securities
may institute a legal proceeding directly against TXI to enforce the Property
Trustee's rights under the Convertible Subordinated Debentures without first
instituting any legal proceeding against the Property Trustee or any other
person or entity, including the Trust. Notwithstanding the foregoing, if a Trust
Agreement Event of Default has occurred and is continuing and such event is
attributable to the failure of TXI to pay interest or principal on the
Convertible Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, the redemption date), then a
holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
Convertible Subordinated Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such holder on or
after the respective due date specified in the Convertible Subordinated
Debentures. Upon the occurrence of any of the events described in clauses (i) or
(ii) above, the holders of the Preferred Securities also will be entitled, by
majority vote, to appoint a Special Administrative Trustee, who shall have the
same rights, powers and privileges as the other Administrative Trustees. See
"Description of the Preferred Securities -- Voting Rights" and "Description of
the Preferred Securities Guarantee -- Events of Default."
Possible Adverse Effects From Extension of Interest Payment Period
TXI has the right under the Indenture to defer payments of interest on the
Convertible Subordinated Debentures by extending the interest payment period at
any time, and from time to time, on the Convertible Subordinated Debentures. As
a consequence of such an extension, quarterly distributions on the Preferred
Securities would be deferred (but despite such deferral would continue to accrue
with interest thereon compounded quarterly) by the Trust during any such
extended interest payment period. Such right to extend the interest payment
period for the Convertible Subordinated Debentures is limited to a period not
exceeding 20 consecutive quarters. In the event that TXI exercises this right to
defer payments of interest, then TXI will not and shall not permit any
subsidiary to, (i) declare or pay any dividends or distributions on or redeem,
purchase, acquire or make a liquidation payment with respect to, any of TXI's
capital stock, (ii) make any
12
<PAGE> 39
payment of principal of, premium, if any, or interest on, or repay, repurchase
or redeem any debt security of TXI that ranks pari passu with or junior in
interest to the Convertible Subordinated Debentures or (iii) make any guarantee
payments with respect to any guarantee by TXI of the debt securities of any
subsidiary if such guarantee ranks pari passu with or junior in interest to the
Convertible Subordinated Debentures (other than (a) dividends or distributions
in TXI's capital stock, (b) any declaration of a dividend in connection with the
implementation of a Rights Plan (as defined in the Indenture) or the redemption
or repurchase of any rights distributed pursuant to a Rights Plan, (c) payments
under the Preferred Securities Guarantee and (d) purchases of TXI Common Stock
related to the issuance of TXI Common Stock or rights under any of TXI's benefit
plans for its directors, officers or employees, related to the issuance of TXI
Common Stock or rights under a dividend reinvestment and stock purchase plan or
related to the issuance of TXI Common Stock (or securities convertible or
exchangeable for TXI Common Stock) as consideration in an acquisition
transaction that was entered into prior to the commencement of such Extension
Period). Prior to the termination of any such Extension Period, TXI may further
defer payments of interest by extending the interest payment period, provided
that such Extension Period, together with all such previous and further
extensions thereof, may not exceed 20 consecutive quarters and provided further
that no Extension Period may extend beyond the maturity of the Convertible
Subordinated Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, TXI may select a new Extension Period, subject
to the above requirements. See "Description of the Preferred
Securities -- Distributions" and "Description of the Convertible Subordinated
Debentures -- Option to Extend Interest Payment Period."
Should TXI exercise its rights to defer payments of interest by extending
the interest payment period, each holder of Preferred Securities will continue
to accrue income (as original issue discount) for United States federal income
tax purposes in respect of the deferred interest allocable to its Preferred
Securities, which will be allocated but not distributed to holders of record of
Preferred Securities. As a result, holders of Preferred Securities will
recognize income for United States federal income tax purposes in advance of the
receipt of cash and will not receive the cash from the Trust related to such
income if such holder disposes of its Preferred Securities prior to the record
date for the date on which distributions of such amounts are made. TXI has no
current intention of exercising its right to defer payments of interest by
extending the interest payment period on the Convertible Subordinated
Debentures. Should TXI determine to exercise such right in the future, however,
the market price of the Preferred Securities is likely to be adversely affected.
A holder that disposes of its Preferred Securities during an Extension Period,
therefore, might not receive the same return on its investment as a holder that
continues to hold its Preferred Securities. In addition, as a result of the
existence of TXI's right to defer interest payments, the market price of the
Preferred Securities (which represent an undivided beneficial interest in the
Convertible Subordinated Debentures) may be more volatile than other securities
on which original issue discount accrues that do not have such rights. See
"Certain Federal Income Tax Consequences -- Interest Income and Original Issue
Discount" and "Certain Federal Income Tax Consequences -- Premium and Market
Discount."
Possible Changes to United States Tax Laws or Adverse Tax Decisions; Possible
Tax Event
Certain legislative proposals made in 1996 and 1997, if they had been
enacted, would have adversely affected the ability of the Company to deduct
interest paid on the Convertible Subordinated Debentures. Although these
proposals were not enacted, there is no assurance that after the date hereof
legislation adversely affecting the ability of the Company to deduct the
interest payable on the Convertible Subordinated Debentures will not be enacted.
If adverse legislation is enacted in the future and applied to the Convertible
Subordinated Debentures, such legislation could give rise to a Tax Event which
could, in certain circumstances, require the dissolution of the Trust or permit
TXI to redeem the Convertible Subordinated Debentures or advance the Stated
Maturity of the Convertible Subordinated Debentures.
In addition, the Internal Revenue Service ("Service") recently asserted
that interest payable on a security with characteristics and issued in
circumstances similar to the characteristics and issuance of the Convertible
Subordinated Debentures was not deductible for United States federal income tax
purposes. The taxpayer in that case has filed a petition in the United States
Tax Court challenging the IRS's position on this matter. If this matter is
litigated and the Tax Court sustains the Service's position, such judicial
decision could
13
<PAGE> 40
give rise to a Tax Event which could, in certain circumstances, require the
dissolution of the Trust or permit TXI to redeem the Convertible Subordinated
Debentures.
Because of the possibility of adverse future legislation, case law, and/or
IRS positions, there is no assurance that a Tax Event will not occur. See
"Description of the Convertible Subordinated Debentures -- Possible Tax
Legislation or Adverse Tax Decisions" and "Certain Federal Income Tax
Consequences -- Possible Tax Legislation or Adverse Tax Decisions."
Effect of Special Event Redemption or Distribution
Upon the occurrence of a Special Event, the Trust will be dissolved, except
in the limited circumstances described below, with the result that, after
satisfaction of the liabilities of the Trust to creditors, the Convertible
Subordinated Debentures would be distributed to the holders of the Trust
Securities in connection with the liquidation of the Trust. In the case of a
Special Event that is a Tax Event, in certain circumstances TXI will have the
right to redeem the Convertible Subordinated Debentures, in whole or in part, in
which event the Trust will redeem the Trust Securities on a pro rata basis to
the same extent as the Convertible Subordinated Debentures are redeemed. See
"Description of the Preferred Securities -- Special Event Redemption or
Distribution" and "Certain Federal Income Tax Consequences."
Under current United States federal income tax law, a distribution of
Convertible Subordinated Debentures upon the dissolution of the Trust would not
be a taxable event to holders of the Preferred Securities. Upon the occurrence
of a Tax Event, however, a dissolution of the Trust in which holders of the
Preferred Securities receive cash would be a taxable event to such holders. See
"Certain Federal Income Tax Consequences -- Receipt of Convertible Subordinated
Debentures Upon Liquidation of the Trust" and "-- Sale of Preferred Securities
and Redemption of Convertible Subordinated Debentures."
There can be no assurance as to the market prices for the Preferred
Securities or the Convertible Subordinated Debentures that may be distributed in
exchange for Preferred Securities if a dissolution or liquidation of the Trust
were to occur. Accordingly, the Preferred Securities that an investor may
purchase, or the Convertible Subordinated Debentures that the investor may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Preferred Securities offered
hereby. Because holders of Preferred Securities may receive Convertible
Subordinated Debentures upon the occurrence of a Special Event, prospective
purchasers of Preferred Securities are also making an investment decision with
regard to the Convertible Subordinated Debentures and should carefully review
all the information regarding the Convertible Subordinated Debentures contained
herein. See "Description of the Preferred Securities -- Special Event Redemption
or Distribution" and "Description of the Convertible Subordinated Debentures."
Conditional Right to Advance Maturity
If a Tax Event occurs, then TXI will have the right, prior to the
dissolution of the Trust, to advance the Stated Maturity of the Convertible
Subordinated Debentures to the minimum extent required in order to allow for the
payments of interest in respect of the Convertible Subordinated Debentures to
continue to be tax deductible, but in no event shall the resulting maturity of
the Convertible Subordinated Debentures be less than 15 years from the date of
original issuance thereof. The Stated Maturity shall be advanced only if, in the
opinion of counsel to TXI experienced in such matters, (i) after advancing the
Stated Maturity, interest paid on the Convertible Subordinated Debentures will
be deductible for United States federal income tax purposes and (ii) advancing
the Stated Maturity will not result in a taxable event to holders of the
Preferred Securities. See "Description of the Convertible Subordinated
Debentures -- General" and "Description of the Convertible Subordinated
Debentures -- Mandatory Redemption."
Limited Voting Rights
Holders of Preferred Securities will have limited voting rights and, except
for the rights of holders of Preferred Securities to appoint a Special
Administrative Trustee upon the occurrence of certain events
14
<PAGE> 41
described herein, will not be entitled to vote to appoint, remove or replace, or
to increase or decrease the number of, trustees, which voting rights are vested
exclusively in the holder of the Common Securities. See "Description of the
Preferred Securities -- Voting Rights."
Trading Price of Preferred Securities; Tax Consequences upon Disposition
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Convertible Subordinated Debentures. A holder that uses the accrual method of
accounting for tax purposes (and a cash method holder, if the Convertible
Subordinated Debentures are deemed to have been issued with OID, as defined
herein) and that disposes of Preferred Securities between record dates for
payments of distributions thereon will be required to include accrued but unpaid
interest on the Convertible Subordinated Debentures through the date of
disposition in income as ordinary income, and to add such amount to the adjusted
tax basis in the holder's pro rata share of the underlying Convertible
Subordinated Debentures deemed to be disposed. To the extent that the selling
price (which may not fully reflect the value of the accrued but unpaid interest)
is less then the holder's adjusted tax basis (which will include accrued but
unpaid interest), a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes. See "Certain Federal Tax
Consequences -- Sale of Preferred Securities and Redemption of Convertible
Subordinated Debentures."
RISKS RELATING TO THE COMPANY
Competition
All of the markets in which the Company participates are highly
competitive. The Company competes in each of its cement, aggregate and concrete
products markets with several other suppliers of these products. The Company
competes in its steel markets with national and international producers of steel
products. Some of the Company's competitors are larger, have greater financial
resources and have less financial leverage than the Company. The Company
competes on the basis of, among other things, competitive prices, prompt
availability, customer service and quality products.
Sensitivity to Economic Cycles; Seasonality
A significant percentage of the Company's sales of both CAC and Steel
products is attributable to the level of construction activity, which is
affected by such cyclical factors as general economic conditions, interest
rates, inflation, consumer spending habits and employment. The Company's CAC
operating profit is generally lower in its fiscal quarter ended February 28 as
compared to the other three fiscal quarters due to the impact of winter weather
on construction activity. Steel results in the fiscal quarter ended August 31
are affected by the Company's scheduled summer shut-down to refurbish its steel
production facilities.
Achieving Growth Strategy; Ability to Complete Acquisitions
The Company's ability to implement its growth strategy successfully is
dependent on a number of factors including competition, the availability of
capital and general economic conditions. In addition, a significant element of
the Company's operating strategy is to pursue strategic acquisitions that either
expand or complement the Company's products or markets or to build new or expand
existing production facilities. There can be no assurance that the Company will
be able to identify and make acquisitions on acceptable terms, that the Company
will be able to obtain the permits necessary to build new or expand existing
production facilities, that the Company will be able to obtain financing for
such acquisitions or expansions on acceptable terms or that the Company will be
able successfully to integrate such acquisitions into existing operations.
Availability and Pricing of Raw Materials
The Company is dependent upon purchased scrap steel as a raw material and
upon energy sources, including electricity and fossil fuels. Accordingly, the
Company's results of operations and financial condition
15
<PAGE> 42
have in the past been, and may again in the future be, adversely affected by
increases in raw material costs or energy costs, or their lack of availability.
Status of Certain Tariffs
A group of domestic cement producers, including the Company, filed
antidumping petitions which have resulted in the imposition of significant
antidumping duty cash deposits on grey portland cement and clinker imported from
Mexico and Japan. In addition, the U.S. Department of Commerce has signed
agreements with the Venezuelan Government and Venezuelan cement producers, which
are designed to eliminate the dumping and illegal subsidization of grey portland
cement and clinker from Venezuela. On an annual basis, the antidumping duties
are subject to review by the Department of Commerce to determine whether the
current antidumping duty deposit rates should be adjusted upward or downward.
In 1995, the Antidumping Code of the General Agreement on Tariffs and Trade
was substantially altered pursuant to the Uruguay Round of multilateral trade
negotiations. U.S. legislation approving and implementing the Uruguay Round
agreements requires the Department of Commerce and the U.S. International Trade
Commission to conduct "sunset" reviews of all outstanding antidumping and
countervailing duty orders and suspension agreements, including the antidumping
orders against grey portland cement and clinker from Mexico and Japan and the
suspension agreements on grey portland cement and clinker from Venezuela, to
determine whether they should be terminated or remain in effect. The sunset
reviews of the cement orders and suspension agreements are scheduled to begin no
later than August 1999 and conclude within one year (i.e., August 2000), or, if
extended, to conclude not later than February 2001. There is no experience as
yet on sunset reviews; therefore, it is difficult to assess the likelihood that
the orders or suspension agreements will be terminated. A substantial reduction
or elimination of the existing antidumping duties could adversely affect the
Company's results of operations. The exact net impact, if any, on the Company is
impossible to determine at this time.
Impact of Environmental Laws
The operations of the Company and its subsidiaries are subject to various
federal and state environmental laws and regulations ("Environmental Laws" or
"Laws"). Under these Laws, the U.S. Environmental Protection Agency ("EPA") and
agencies of state government have the authority to promulgate regulations which
could result in substantial expenditures for pollution control and solid waste
treatment and disposal. Three major areas regulated by these authorities are air
quality, waste management and water quality.
Emission sources at the Company's facilities are regulated by a combination
of permit limitations and emission standards of statewide application, and the
Company believes that it is in substantial compliance with its permit
limitations and laws and regulations applicable to its existing facilities.
There can be no assurance, however, that future changes in permit limitations
and emission standards will not adversely affect the Company's ability to build
new or expand existing production facilities.
Many of the raw materials, products and by-products associated with the
operation of any industrial facility, including those for the production of
steel, cement or concrete products, contain chemical elements or compounds that
can be designated as hazardous substances. Such raw materials, products and
by-products may also exhibit characteristics that result in their being
classified as a hazardous substance or waste. Some examples are the metals
present in cement kiln dust ("CKD"), the ignitability of the fuels derived from
solid waste which the Company uses as a primary or supplementary fuel substitute
for nonrenewable coal and natural gas to fire its cement kilns and the
electric-arc furnace dust ("EAF dust") generated by the Company's steel
facility.
Currently, CKD is exempt from hazardous waste management standards under
the Resource Conservation and Recovery Act ("RCRA") if certain tests are
satisfied. TXI has demonstrated that the CKD it generates satisfies these tests.
However, the EPA plans to apply site-specific waste-management standards to CKD
under the Clean Air Act and RCRA to assure that the environment is protected.
The Company has established operating practices and is implementing waste
management programs which it believes will
16
<PAGE> 43
comply with these anticipated standards, but there can be no assurances that
such practices and programs will continue to comply in the future.
The Company's utilization of hazardous materials such as gasoline, acids,
solvents and chemicals as well as the materials that have been designated or
characterized as hazardous waste by the EPA which the Company uses for energy
recovery, has necessitated that the Company familiarize its work force with the
more exacting requirements of applicable Environmental Laws and regulations with
respect to human health and the environment related to these activities. The
failure to observe these exacting requirements could jeopardize the Company's
hazardous waste management permits and, under certain circumstances, expose the
Company to significant liabilities and costs of cleaning up releases of
hazardous substances into the environment or claims by employees or others
alleging exposure to hazardous substances.
The Company's steel facility generates, in the same manner as other like
steel plants in the industry, EAF dust that contains lead, chromium and cadmium.
The EPA has listed this EAF dust, which is collected in baghouses, as hazardous
waste. The Company has contracts with reclamation facilities in the United
States and Mexico pursuant to which such facilities receive the EAF dust
generated by the Company and recover the metals from the dust for reuse, thus
rendering the dust non-hazardous. In addition, the Company is continually
investigating alternative reclamation technologies and has implemented processes
for diminishing the amount of EAF dust generated.
The Company intends to comply with all legal requirements regarding the
environment, but since many of these requirements are subjective and therefore
not quantifiable, presently not determinable, or are likely to be affected by
future legislation or rule making by government agencies, it is not possible to
accurately predict the aggregate future costs of compliance and their effect on
the Company's operations, future net income or financial condition.
Notwithstanding such compliance, if damage to persons or property or
contamination of the environment has been or is caused by the conduct of the
Company's business or by hazardous substances or wastes used in, generated or
disposed of by the Company, the Company may be liable for such damages and be
required to pay the cost of investigation and remediation of such contamination.
The amount of such liability could be material and there can be no assurance
that the Company will not incur material liability in connection with possible
claims related to the Company's operations and properties under Environmental
Laws.
17
<PAGE> 44
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for TXI and subsidiaries for the
periods indicated below was as follows:
<TABLE>
<CAPTION>
NINE
MONTHS
ENDED
FISCAL YEARS ENDED MAY 31, FEBRUARY 28,
-------------------------------- -------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges........... 1.01 2.37 4.05 6.00 5.70 5.10 5.72
</TABLE>
For purposes of calculating the above ratios, earnings consist of net
income to which has been added income taxes and fixed charges. Fixed charges
consist of interest on all indebtedness (including capitalized interests) and
one-third of rental expense (approximate portion representing interest).
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated with TXI's
financial statements, with the Preferred Securities shown as "Company-obligated
mandatorily redeemable preferred securities of subsidiaries holding solely
company subordinated notes."
USE OF PROCEEDS
The proceeds of the sale of the Preferred Securities will be invested by
the Trust in the Convertible Subordinated Debentures of TXI. TXI will use the
net proceeds from the sale of such Convertible Subordinated Debentures for
general corporate purposes, including repayment of outstanding indebtedness
under TXI's revolving credit facility. The revolving credit facility matures on
December 18, 2002, and provides for a fluctuating interest rate per annum based
upon LIBOR. The average interest rate for the 12-month period ended February 28,
1998 was 6.55%. As of May 28, 1998, TXI had drawn approximately $74 million
under the revolving credit facility, the majority of which was used to fund
capital expenditures, including the construction of the Virginia steel facility.
Repayment of this indebtedness will not reduce the maximum amount that TXI from
time to time may borrow under the revolving credit facility.
18
<PAGE> 45
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is traded on the NYSE under the symbol "TXI."
The following table sets forth for the fiscal year periods indicated, the
intra-day high and low sale prices per share of the Common Stock on the NYSE,
and quarterly cash dividends paid:
<TABLE>
<CAPTION>
PRICE RANGE
------------- DIVIDENDS
HIGH LOW PAID
---- --- ---------
<S> <C> <C> <C>
FISCAL YEAR 1996
First Quarter (ended August 31, 1995).................. $24 7/8 $17 13/16 $.050
Second Quarter (ended November 30, 1995)............... 27 5/8 23 1/4 .050
Third Quarter (ended February 29, 1996)................ 31 1/8 25 1/8 .050
Fourth Quarter (ended May 31, 1996).................... 34 5/8 30 1/4 .050
FISCAL YEAR 1997
First Quarter (ended August 31, 1996).................. $34 5/16 $31 5/16 $.050
Second Quarter (ended November 30, 1996)............... 33 7/16 26 15/16 .050
Third Quarter (ended February 28, 1997)................ 29 5/16 24 1/8 .075
Fourth Quarter (ended May 31, 1997).................... 29 1/4 20 7/8 .075
FISCAL YEAR 1998
First Quarter (ended August 31, 1997).................. $34 11/16 $23 5/8 $.075
Second Quarter (ended November 30, 1997)............... 52 33 5/16 .075
Third Quarter (ended February 28, 1998)................ 58 42 1/2 .075
Fourth Quarter (ended May 31, 1998).................... 68 1/8 50 3/4 .075
</TABLE>
The last reported sales price per share of the Common Stock on the NYSE
Composite Tape on May 29, 1998 was $59.375. As of February 28, 1998, there were
approximately 3,650 holders of record of the Common Stock.
Certain of the Company's loan agreements contain covenants which provide
for restrictions on the payment of dividends on Common Stock. See Notes to the
Consolidated Financial Statements for the fiscal quarter ended February 28,
1998.
19
<PAGE> 46
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
February 28, 1998 and as adjusted at such date to give effect to the receipt of
the net proceeds from the sale of $ of the Convertible
Subordinated Debentures. This table should be read in conjunction with the
Consolidated Financial Statements of the Company and Notes thereto included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
FEBRUARY 28, 1998
----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Current portion of long-term debt......................... $ 13,430 $
======== ========
Long-term debt:
Revolving credit facility................................. $ 38,000 $
Other long-term debt...................................... 331,404
-------- --------
Total long-term debt...................................... 369,404
Company-obligated mandatorily redeemable preferred
securities of subsidiaries holding solely company
subordinated notes
Stockholders' equity:
Common Stock, $1.00 par value per share; 40,000,000 shares
authorized; 25,067,226 shares issued(1)................ 25,067
Additional paid-in capital................................ 255,149
Treasury stock, 3,979,114 shares, at cost................. (87,272)
Retained earnings......................................... 324,605
-------- --------
Total stockholders' equity............................. 517,549
-------- --------
Total capitalization................................... $886,953 $
======== ========
</TABLE>
- ---------------
(1) Excludes an aggregate of 1,923,187 shares of Common Stock issuable upon the
exercise of options outstanding under the Company's stock option plans as
of February 28, 1998 at a weighted average exercise price of $26.97 per
share, of which options to purchase 536,437 shares were exercisable at such
date. See Notes to annual Consolidated Financial Statements.
20
<PAGE> 47
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated statement of income data and the selected
consolidated balance sheet data as of May 31, 1993, 1994, 1995, 1996 and 1997
and for the fiscal years then ended have been derived from the Company's audited
consolidated financial statements and should be read in conjunction with those
statements, which are included in this Prospectus or incorporated herein by
reference. The selected consolidated statement of income data for the nine month
periods ended February 28, 1997 and 1998 and the consolidated balance sheet data
as of February 28, 1998 were derived from the unaudited consolidated financial
statements included herein. In the opinion of management, the unaudited
information includes all adjustments, consisting of only normal recurring
adjustments, necessary for a fair presentation of the financial position and
results of operations of the Company at the dates and for the periods presented.
Results for the nine month period ended February 28, 1998 are not necessarily
indicative of the results that may be expected for the full fiscal year. The
selected consolidated financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the consolidated financial statements and notes
thereto which are included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEARS ENDED MAY 31, FEBRUARY 28,
---------------------------------------------------- -------------------------
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- -------- -------- --------------
(IN THOUSANDS EXCEPT DATA PER COMMON SHARE)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net sales...................... $614,292 $707,147 $830,526 $967,449 $973,824 $696,936 $ 861,168
Costs and expenses (income)
Cost of products sold........ 545,200 598,601 681,824 756,715 767,030 554,956 683,116
Selling, general and
administrative............. 43,116 47,341 58,275 68,852 76,535 56,006 67,798
Interest..................... 32,596 26,231 20,117 19,960 18,885 14,165 14,418
Other income................. (6,639) (8,614) (7,571) (13,119) (11,848) (7,169) (10,603)
-------- -------- -------- -------- -------- -------- ----------
614,273 663,559 752,645 832,408 850,602 617,958 754,729
-------- -------- -------- -------- -------- -------- ----------
Income before the following
items........................ 19 43,588 77,881 135,041 123,222 78,978 106,439
Income taxes................... (646) 15,556 25,700 47,256 41,189 26,767 35,252
-------- -------- -------- -------- -------- -------- ----------
665 28,032 52,181 87,785 82,033 52,211 71,187
Minority interest in
Chaparral(1)................. 393 (2,281) (4,164) (7,831) (6,559) (4,298) (4,400)
-------- -------- -------- -------- -------- -------- ----------
Net income..................... $ 1,058 $ 25,751 $ 48,017 $ 79,954 $ 75,474 $ 47,913 $ 66,787
======== ======== ======== ======== ======== ======== ==========
PER SHARE DATA:
Basic
Average common shares........ 22,076 22,473 24,567 22,203 21,751 22,012 21,066
Net income per common Share.. $ 0.06 $ 1.15 $ 1.96 $ 3.61 $ 3.48 $ 2.18 $ 3.18
======== ======== ======== ======== ======== ======== ==========
Diluted
Average common shares........ 25,201 25,273 24,817 22,682 22,163 22,457 21,717
Net income per common
share...................... $ 0.05 $ 1.03 $ 1.94 $ 3.53 $ 3.42 $ 2.14 $ 3.08
======== ======== ======== ======== ======== ======== ==========
Cash dividends per common
share........................ $ 0.10 $ 0.10 $ 0.15 $ 0.20 $ 0.25 $ 0.18 $ 0.23
OTHER DATA:
EBITDA(2)...................... $ 82,414 $118,781 $147,340 $204,281 $196,016 $134,122 $ 165,858
Capital expenditures........... 17,212 23,305 48,751 79,300 85,188 65,262 344,335
Long-term debt to total
capitalization (at end of
period)...................... 48.6% 32.7% 35.1% 27.6% 28.0% 30.3% 41.6%
</TABLE>
<TABLE>
<CAPTION>
MAY 31, FEBRUARY 28,
---------------------------------------------------- ------------
1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Net working capital............. $159,408 $161,383 $187,603 $219,345 $242,994 $ 221,532
Total assets.................... 757,300 749,120 753,055 801,063 847,923 1,117,368
Long-term debt.................. 267,243 171,263 185,274 160,209 176,056 369,404
Shareholders' equity............ 282,511 352,671 343,109 420,022 452,811 517,549
</TABLE>
- ---------------
(1) On December 31, 1997, TXI acquired the 15.7% in Chaparral previously held
by public shareholders.
(2) EBITDA is earnings before interest, income taxes, depreciation and
amortization. EBITDA should not be considered as an alternative to income
from operations or cash flow from operating activities (each determined in
accordance with generally accepted accounting principles).
21
<PAGE> 48
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition and results of
operations of the Company should be read in connection with the Company's
audited and unaudited consolidated financial statements and notes thereto
included elsewhere in this Prospectus.
GENERAL
The Company is a leading supplier of construction materials through two
business segments: cement, aggregate and concrete products (the "CAC" segment);
and structural steel and specialty bar products (the "Steel" segment). Through
the CAC segment, the Company produces and sells cement, stone, sand and gravel,
expanded shale and clay aggregate and concrete products. Through its Steel
segment, the Company produces and sells structural steel, specialty bar
products, merchant bar-quality rounds, reinforcing bar and channels.
The Company owns long-term reserves of limestone, the primary raw material
for the production of cement. The primary raw material for the Company's Steel
operations is recycled steel obtained from crushed automobiles and other
sources. Both the CAC and Steel businesses require large amounts of capital
investment and energy.
Corporate resources include administration, financial, legal,
environmental, personnel and real estate activities which are not allocated to
operations and are excluded from operating profit.
A significant percentage of the Company's sales of both CAC and Steel
products is attributable to the level of construction activity, which is
affected by general economic conditions and seasonal weather conditions. The
Company's CAC operating profit is generally lower in the fiscal quarter ended
February 28 as compared to the other three fiscal quarters due to the impact of
winter weather conditions on construction activity. Steel results in the fiscal
quarter ended August 31 are affected by the Company's scheduled summer shut-down
to refurbish the production facilities.
22
<PAGE> 49
RESULTS OF OPERATIONS
The following table sets forth certain operating information about the
Company.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEARS ENDED MAY 31, FEBRUARY 28,
-------------------------------- --------------------
1995 1996 1997 1997 1998
-------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT PER UNIT DATA)
<S> <C> <C> <C> <C> <C>
NET SALES
Cement................................................. $115,531 $137,773 $133,256 $ 95,636 $128,190
Ready-mix.............................................. 114,568 154,105 148,861 106,946 140,888
Stone, sand and gravel................................. 64,285 78,198 76,070 55,172 60,463
Other products......................................... 58,615 70,690 79,783 57,284 73,037
Interplant............................................. (54,284) (80,973) (80,822) (58,981) (70,354)
-------- -------- -------- -------- --------
Total CAC.............................................. 298,715 359,793 357,148 256,057 332,224
Structural mills....................................... 359,845 447,115 435,242 308,987 396,529
Bar mill............................................... 167,962 157,130 178,227 128,107 125,389
Other.................................................. 4,004 3,411 3,207 3,785 7,026
-------- -------- -------- -------- --------
Total Steel............................................ 531,811 607,656 616,676 440,879 528,944
-------- -------- -------- -------- --------
Total net sales........................................ 830,526 967,449 973,824 696,936 861,168
OPERATING COST
Operating cost -- CAC.................................. 229,708 269,665 274,100 199,821 257,330
Operating cost -- Steel................................ 488,183 531,880 545,189 392,756 469,431
-------- -------- -------- -------- --------
Total operating cost................................... 717,891 801,545 819,289 592,577 726,761
OPERATING PROFIT
Operating profit -- CAC................................ 69,007 90,128 83,048 56,246 74,894
Operating profit -- Steel.............................. 43,628 75,776 71,487 48,123 59,513
-------- -------- -------- -------- --------
Total operating profit................................. 112,635 165,904 154,535 104,369 134,407
CORPORATE RESOURCES
Selling, general and administrative.................... 15,502 17,168 19,270 13,885 17,683
Depreciation and amortization.......................... 786 823 838 606 684
Other income........................................... (1,651) (7,088) (7,680) (3,265) (4,817)
-------- -------- -------- -------- --------
14,637 10,903 12,428 11,226 13,550
Interest expense......................................... 20,117 19,960 18,885 14,165 14,418
-------- -------- -------- -------- --------
Income before income taxes & minority interest........... $ 77,881 $135,041 $123,222 $ 78,978 $106,439
======== ======== ======== ======== ========
OTHER DATA:
Depreciation and amortization -- CAC................... $ 14,669 $ 15,964 $ 19,918 $ 14,170 $ 18,974
Depreciation and amortization -- Steel................. 33,887 32,493 33,153 26,203 25,343
Capital expenditures -- CAC............................ 27,781 57,628 49,327 38,014 155,653
Capital expenditures -- Steel.......................... 16,234 20,630 33,776 25,590 187,001
Capital expenditures -- corporate resources............ 4,736 1,042 2,085 1,658 1,681
OPERATING DATA:
Units shipped
Cement (tons)........................................ 2,226 2,363 2,082 1,500 1,943
Ready-mix (cubic yards).............................. 2,415 3,088 2,813 2,024 2,617
Stone, sand and gravel (tons)........................ 12,375 15,706 15,501 11,110 12,438
Structural mills (tons).............................. 1,036 1,137 1,095 772 986
Bar mill (tons)...................................... 475 453 525 377 352
Weighted average sales price per unit
Cement (ton)......................................... $ 51.90 $ 58.30 $ 64.00 $ 63.76 $ 65.98
Ready-mix (cubic yards).............................. 47.44 49.90 52.92 52.84 53.84
Stone, sand and gravel (ton)......................... 5.19 4.98 4.91 4.97 4.86
Structural mills (ton)............................... 347.34 393.24 397.48 400.24 402.16
Bars mill (ton)...................................... 353.58 346.87 339.48 339.81 356.22
</TABLE>
NINE-MONTH PERIOD ENDED FEBRUARY 28, 1998 (THE "1998 PERIOD") COMPARED TO
NINE-MONTH PERIOD ENDED FEBRUARY 28, 1997 (THE "1997 PERIOD")
Net sales. Net sales were $861.2 million for the 1998 Period, an increase
of $164.2 million from the 1997 Period.
CAC sales. CAC sales were $332.2 million for the 1998 Period, an increase
of $76.2 million from the 1997 Period, of which $12.0 million was attributable
to Riverside, which was acquired on December 31, 1997. Higher cement sales
resulted from an increase of 19% in shipments from the Company's Texas
operations. The Company's entry into the California regional market through the
acquisition of Riverside contributed to an overall increase in total cement
shipments of 30%. Increased sales in ready-mix and stone, sand and gravel can be
attributed primarily to a return to more favorable weather conditions. Ready-mix
shipments increased 29% in the 1998 Period over the 1997 Period. Stone, sand and
gravel shipments increased by 12% during the
23
<PAGE> 50
1998 Period compared to the 1997 Period, while average prices for these products
decreased due to a change in the mix of products sold.
Steel sales. Steel sales were $528.9 million for the 1998 Period, an
increase of $88.1 million from the 1997 Period. Structural steel shipments
increased 28% in the 1998 Period, reflecting sustained demand for structural
products due to the strength in construction activity. Prices for bar mill
products increased 5% in the 1998 Period as a result of an improved product mix
and higher reinforcing bar and specialty bar product prices; these improvements
were somewhat offset by a 7% decrease in shipments.
Operating costs. Cost of products sold, including depreciation, depletion
and amortization, was $683.1 million for the 1998 Period, an increase of $128.2
million from the 1997 Period. CAC costs were $235.4 million, an increase of
$53.9 million compared to the 1997 Period, as a result of increased shipments
and higher maintenance costs at the Texas cement plants and the addition of the
higher operating costs of the Riverside plants. Steel costs were $447.7 million,
an increase of $74.2 million compared to the 1997 Period, resulting from
increased shipments and higher melt shop unit costs.
CAC selling, general and administrative expenses were $23.5 million in the
1998 Period, an increase of $3.6 million from the 1997 Period due primarily to
expanded operations and higher incentive compensation. Steel selling, general
and administration expenses were $25.9 million in the 1998 Period, an increase
of $4.3 million from the 1997 Period, due primarily to increased incentive
compensation.
Operating profit. Operating profit was $134.4 million in the 1998 Period,
an increase of $30.0 million from the 1997 Period. CAC profit was $74.9 million,
an increase of $18.6 million over the 1997 Period due to increased shipments.
Steel profit was $59.5 million, an increase of $11.4 million over the 1997
Period, due primarily to increased structural steel shipments and higher average
selling prices for specialty bar products.
Corporate resources. Selling, general and administrative expenses,
including depreciation and amortization, were $18.4 million for the 1998 Period,
an increase of $3.9 million from the 1997 Period due primarily to increased
incentive compensation expenses and general expenses not allocated to
operations. Other income of $4.8 million for the 1998 Period included $3.3
million from property sales generated by the Company's real estate operations,
an increase of $1.2 million from the 1997 Period property sales.
Interest expense. Interest expense was $14.4 million for the 1998 Period,
net of $2.1 million of capitalized interest.
FISCAL 1997 COMPARED TO FISCAL 1996
Net sales. Net sales for fiscal 1997 were $973.8 million, an increase of
$6.4 million from fiscal 1996.
CAC sales. CAC sales were $357.1 million in fiscal 1997, a decrease of $2.6
million from fiscal 1996 due to lower shipments caused by unusually wet weather.
Average cement pricing increased by 10% in fiscal 1997 over fiscal 1996, while
shipments decreased by 12%. The decrease in ready-mix sales reflected price
increases of 6% in fiscal 1997, offset by a 9% decrease in shipments. The
increase in sales of other products reflected the Company's acquisition of
expanded shale and clay aggregate facilities in California in fiscal 1996.
Steel sales. Steel sales were $616.7 million for fiscal 1997, an increase
of $9.0 million from fiscal 1996, due to higher bar mill shipments which were
partially offset by a decline in structural steel shipments. Bar mill shipments
were 16% higher in fiscal 1997 than fiscal 1996. Specialty bar products
shipments increased 6% in fiscal 1997.
Operating costs. Cost of products sold, including depreciation, depletion
and amortization, was $767.0 million in fiscal 1997, a $10.3 million increase
from fiscal 1996. CAC costs were $249.6 million for fiscal 1997, an increase of
$2.9 million from fiscal 1996, due to higher unit costs for cement manufacturing
and ready-mix distribution, offset by the effect of lower cement shipments.
Steel costs were $517.4 million, an increase of $7.4 million from fiscal 1996
due primarily to increased shipments offset by slightly lower steel rolling
costs per ton.
24
<PAGE> 51
CAC selling, general and administrative expenses were $27.1 million for
fiscal 1997, an increase of $2.5 million from fiscal 1996. Steel selling,
general and administrative expenses were $29.3 million for fiscal 1997, an
increase of $3.1 million from fiscal 1996, primarily due to higher incentive
compensation.
Operating profit. Operating profit was $154.5 million in fiscal 1997, a
decrease of $11.4 million from fiscal 1996. CAC profit was $83.0 million for
fiscal 1997, a decrease of $7.1 million from fiscal 1996, primarily due to
reduced shipments caused by unusually wet weather. Steel profit was $71.5
million in fiscal 1997, a decrease of $4.3 million from fiscal 1996 as improved
margins from increased shipments were offset by higher selling, general and
administrative expenses.
Corporate resources. Selling, general and administrative expenses,
including depreciation and amortization, were $20.1 million for fiscal 1997, an
increase of $2.1 million from fiscal 1996 due to expanded operations, offset by
reduced incentive compensation at the corporate resources level. Other income of
$7.7 million included $6.3 million generated by the Company's real estate
operations during fiscal 1997.
Interest Expense. Interest expense was $18.9 million in fiscal 1997, a
decrease of $1.1 million from fiscal 1996, due to a reduction in the average
outstanding debt.
FISCAL 1996 COMPARED TO FISCAL 1995
Net sales. Net sales for fiscal 1996 were $967.4 million, an increase of
$136.9 million from fiscal 1995.
CAC sales. CAC sales were $359.8 million in fiscal 1996, an increase of
$61.1 million from fiscal 1995 due to continued price improvements and increased
shipments. Average cement pricing increased by 12% in fiscal 1996 and cement
shipments increased by 6%. The increase in ready-mix sales in fiscal 1996
reflected a 28% increase in shipments due to expanded capacity and a 5% increase
in average prices. Stone, sand and gravel sales improved 22% in fiscal 1996,
with an increase in shipments of 27%, while overall average prices decreased 4%
due to a change in the mix of products sold.
Steel sales. Steel sales were $607.7 million in fiscal 1996, an increase of
$75.8 million from fiscal 1995, due to a 9% increase in average selling prices
and an increase in structural steel shipments. Prices for structural steel
products increased 13% in fiscal 1996 compared to fiscal 1995. Bar mill
shipments decreased by 5% in this period with somewhat lower average selling
prices.
Operating costs. Cost of products sold, including depreciation, depletion
and amortization, was $756.7 million in fiscal 1996, an increase of $74.9
million from fiscal 1995. CAC costs were $246.7 million for fiscal 1996, an
increase of $35.7 million from the prior year due to higher shipments. Steel
costs were $510.0 million in fiscal 1996, an increase of $40.6 million over
fiscal 1995, due to higher shipments. Higher scrap, melt shop and steel rolling
costs resulted in a 4% increase in average cost per ton.
CAC selling, general and administrative expenses were $24.7 million for
fiscal 1996, an increase of $3.1 million from fiscal 1995, due to higher
incentive compensation. Steel selling, general and administrative expenses were
$26.2 million for fiscal 1996, an increase of $5.8 million from fiscal 1995,
primarily due to higher incentive compensation.
Operating profit. Operating profit was $165.9 million in fiscal 1996, an
increase of $53.3 million from fiscal 1995. CAC profit was $90.1 million, an
increase of $21.1 million from fiscal 1995 due to increased shipments and higher
prices. Steel profit was $75.8 million in fiscal 1996, an increase of $32.1
million from fiscal 1995, due to increased prices outpacing increased costs.
Corporate resources. Selling, general and administrative expenses were
$18.0 million for fiscal 1996, an increase of $1.7 million from fiscal 1995.
Interest expense. Interest expense was $20.1 million in fiscal 1996, a
decrease of $100,000 from fiscal 1995.
25
<PAGE> 52
LIQUIDITY AND CAPITAL RESOURCES
The Company generally finances its major capital expansion projects with
long-term borrowing. Maintenance capital expenditures and working capital are
funded by cash flow from operations. As a result of the acquisition of
Riverside, the acquisition of the minority interest in Chaparral and the
construction of the Virginia steel facility, the Company has spent or committed
to spend approximately $650 million. The Company expects cash from operations,
the net proceeds from the sale of the Convertible Subordinated Debentures and
borrowings under its revolving credit facility to be sufficient to provide funds
for capital expenditure commitments, scheduled debt repayments and working
capital needs during the next two years.
Net cash provided by operating activities for the 1998 Period was $144.4
million, an increase of $75.9 million over the 1997 Period due to higher net
income, increased depreciation, depletion and amortization expense and changes
in working capital items. During fiscal years 1997, 1996 and 1995, net cash
provided by operating activities was $109.9 million, $127.5 million and $115.9
million, respectively.
Net cash used by investing activities for the 1998 Period was $346.4
million compared to $83.6 million in fiscal 1997, consisting principally of
capital expenditure items. Historically, capital expenditures have consisted of
normal replacement and technological upgrades of existing equipment and
expansion of the Company's operations. The fiscal year 1998 capital expenditure
budget for these activities is estimated to reach $160 million, of which $113.6
million has been incurred during the 1998 Period. Expenditures included the
purchase of expanded shale and clay facilities in Colorado, additional ready-mix
plants in Texas and Louisiana and bar mill upgrades at the Texas steel facility.
Additionally, capital expenditures for the construction of the Company's
Virginia steel facility were $47.9 million for the 1998 Period. Production at
this facility is scheduled to begin in 1999, with total costs for the site,
utilities, equipment and installation estimated to be $450 million, although
there can be no assurance that the facility will commence production on schedule
or that the total cost will not increase. Effective December 31, 1997, the
Company purchased Riverside for $115.4 million, of which $110.9 million had been
paid through February 28, 1998. On December 31, 1997, the Company acquired the
minority interest in Chaparral for an estimated $77.1 million, including
transaction expenses, of which $72.0 million had been paid through February 28,
1998.
Net cash provided by financing activities for the 1998 Period was $186.6
million compared to $34.5 million used in fiscal 1997. Borrowings, net of debt
retirements, increased $193.3 million in the 1998 Period. On December 18, 1997,
the Company concluded the private placement of $200 million in fixed-rate senior
notes having an average maturity of 12 years and average interest rate of 7.28%.
This financing and cash provided by operations funded the Company's increased
capital expenditures for the 1998 Period. In December 1997, the Company
increased the maximum borrowing limit on its revolving credit facility from $100
million to $350 million and extended its term until December 2002. At February
28, 1998, $302.6 million was available for future borrowings thereunder. During
1997, cash provided by operations funded the Company's purchase of $41.6 million
of its Common Stock and Chaparral's purchase of $3.8 million of its common
stock. Effective February 1997, the Company declared a two-for-one stock split
and increased the quarterly cash dividend rate to $.075 per share.
YEAR 2000 COMPLIANCE
The Company is aware of the issues that users of many computer systems will
face as the year 2000 approaches and is in the process of determining Year 2000
compliance in its operating, financial and management information systems. The
Company does not anticipate any material disruption in its operations or
incurrence of material costs as a result of any failure by the Company to be in
compliance.
INFLATION
Management believes that inflation has not had a material effect on the
Company's operations.
26
<PAGE> 53
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997 the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share." This statement establishes new standards for computing and presenting
earnings per share and became effective for financial statements issued for
periods ending after December 15, 1997, including interim periods, and requires
that all prior period earnings per share data be restated. The Company adopted
SFAS No. 128 for its fiscal quarter ended February 28, 1998.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income" and SFAS No. 131, "Disclosures About Segments of an Enterprise and
Related Information." These statements are effective for fiscal years beginning
after December 15, 1997, although earlier adoption is permitted. SFAS No. 130
requires the presentation of comprehensive income and its components in a full
set of general purpose financial statements. SFAS No. 131 requires the
disclosure of financial and descriptive information about reportable operating
segments. Both SFAS No. 130 and 131 are modifications of existing disclosure
requirements which will have no effect on the results of operations or financial
condition of the Company.
27
<PAGE> 54
BUSINESS
GENERAL
TXI is a leading supplier of construction materials through two business
segments: cement, aggregate and concrete products; and structural steel and
specialty bar products. The Company is the largest producer of cement in Texas
and the second largest supplier of structural steel products in North America.
Demand for structural steel, cement, aggregate and concrete products is
primarily driven by construction activity, while specialty bar products supply
the original equipment manufacturer ("OEM"), tool and oil country goods markets.
From fiscal 1994 to fiscal 1997, TXI's net sales and net income have grown at a
compound annual rate of 11% and 43%, respectively. For the 12 months ended
February 28, 1998, the Company generated $1.1 billion in net sales and $94.3
million in net income.
The Company is the only major North American producer of both cement and
steel. TXI has derived significant benefits therefrom, primarily in lowering
production costs and enhancing productivity through the innovative recycling of
by-products of manufacturing. The Company has extensive operating experience in
both of its business segments. Founded in 1951, the Company began its cement
operations in 1960 with the opening of its Midlothian, Texas facility and added
its steel operations in 1975 with the construction of a plant in Midlothian.
On December 31, 1997, the Company acquired Riverside, the owner of a 1.3
million ton per year portland cement plant and a 100,000 ton per year specialty
white cement plant. The acquisition increased TXI's cement capacity by 60% and
opened the California regional cement market to the Company. TXI is constructing
a structural steel facility in Virginia, scheduled to begin operations in the
summer of 1999, which will expand TXI's steel capacity by approximately 60%. In
March 1998, TXI filed for a permit to expand its Midlothian, Texas, cement
plant's production from 1.3 to 2.8 million tons per year. The Company is in the
planning stages of modernizing and upgrading its portland cement plant in
California.
BUSINESS STRATEGY
The Company's business strategy is to grow profitably in both of its
business segments by achieving and maintaining market leadership positions in
desirable markets, capitalizing on innovation in manufacturing processes and
products, being the low cost supplier, pursuing strategic growth opportunities
and preserving financial strength and flexibility in order to capitalize on
these opportunities when they arise.
The key elements of the Company's strategy are:
Achieve and Maintain Market Leadership. The Company strives to be the
number one or two supplier in desirable markets. The Company is:
- The largest producer of cement in Texas and a major cement producer in
California, the two largest cement markets in the U.S.
- The second largest supplier of structural steel products in North
America.
- The largest supplier of light weight steel beams used in manufactured
housing in North America.
- The largest supplier of expanded shale and clay aggregate products west
of the Mississippi River.
- The largest supplier of stone, sand and gravel aggregate products and the
second largest supplier of ready-mix concrete in North Texas.
- The largest supplier of sand and gravel aggregate products and ready-mix
concrete in Louisiana.
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Capitalize on Innovation in Manufacturing Processes and Products. The
Company emphasizes the development and improvement of manufacturing process
technologies and the design and marketing of new products. Research and
development of manufacturing processes and products is considered to be every
employee's responsibility at TXI. All employees are empowered to seek and
implement creative ideas to improve operations and results.
- TXI pioneered and is a leader in the manufacture of wide flange beams and
other structural steel products using recycled steel.
- TXI developed and patented near net shape casting, a process which
provides energy and capital cost savings in the making of wide flange
beams and other structural steel products.
- TXI developed and patented the CemStar process, which uses a co-product
from steel-making to increase cement production with little additional
cost. TXI continues to research and refine processes for the recovery and
recycling of waste and the by-products generated by manufacturing
processes.
- TXI continues to develop new, higher-margin products, such as Bantam
Beams and Diamond Pro professional groundskeeping products.
Be the Low Cost Supplier. The Company's focus on market leadership is
accompanied by its determination to drive down production and distribution costs
in order to be the low cost supplier to its customers.
- TXI operates the largest steel shredder in the world, currently supplying
42% of its total steel raw material needs. The shredder enables the
Company to access a continuous source of low cost, unprocessed scrap
steel in order to reduce costs and exposure to increasing prices for
higher grade recycled steel.
- TXI is a leader in substituting alternative fuels for the nonrenewable
fuels typically used in the energy intensive cement manufacturing
process. The Company lowers cement manufacturing costs both by reducing
expenditures for the nonrenewable fuels and by receiving income for the
management of alternative fuels received from third party generators of
such fuels.
Pursue Strategic Growth Opportunities. The Company pursues profitable
growth by building on its business and operational expertise in order to enter
new markets and introduce new products.
- A structural steel facility being constructed in Virginia will combine a
steel shredder, near net shape casting, state-of-the-art steel melting
technology and a proprietary rolling mill design to achieve low
production costs and the widest structural steel product range available
from a single facility.
- The acquisition of Riverside provides TXI access to California, the
largest cement market in the U.S. The Company intends to implement its
CemStar process at Riverside in the near term to enhance productivity and
increase capacity. The Company also intends to upgrade and modernize
Riverside's existing portland cement plant with higher capacity and more
cost efficient equipment in order to move into a position of leadership
in the California regional market.
- TXI intends to increase its Midlothian cement capacity from 1.3 million
to 2.8 million tons per year in order to maintain and enhance its
position as the largest producer of cement in Texas.
- TXI is upgrading its specialty bar products capability to further improve
product mix and increase the breadth of markets addressed.
- TXI has embarked on a program to license its CemStar process to cement
producers throughout the world.
- TXI continues to pursue investments for internal growth and opportunistic
acquisitions in order to build on leadership positions in its stone, sand
and gravel, expanded shale and clay and concrete operations.
Preserve Financial Strength and Flexibility. The Company strives to be
financially positioned to pursue profitable growth opportunities as they arise.
TXI expects that the proceeds from the sale of the Convertible Subordinated
Debentures will enable the Company to maintain its commitment to a strong
financial position and pursue its business strategy on a sound financial basis.
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<PAGE> 56
CEMENT
Industry Overview. Cement is the essential binding material used in making
concrete, which is widely used in residential, non-residential and public works
construction activity. Given the high transportation costs of cement relative to
its value, it is typically sold within a 200 mile radius from the producing
plant, with those producers on or near waterways able to transport their product
over substantially greater distances on a cost effective basis. Consequently,
even cement producers with global operations compete on a regional basis in each
market in which that company manufactures and distributes product. No single
cement company in the U.S. has a production and distribution system extensive
enough to serve all U.S. markets. The ability of a company to compete in a given
market depends largely on the location and operating costs of its plants and
associated distribution terminals, price and service in that market.
Demand for cement is dependent on levels of construction activity specific
to a region or market. Current demand for cement in the Texas and California
regions, as in the rest of the country as a whole, is in excess of current
domestic cement capacity. The Company believes that a continuation of the
current low interest rate environment and increased government spending on
infrastructure improvement, including the enactment of the Intermodal Surface
Transportation Efficiency Act of 1998 ("ISTEA II"), could have a favorable
impact on future demand in its markets. In Texas and California alone, ISTEA II
authorizes the appropriation of approximately 40% greater federal funding over
the next six years for the construction and improvement of highways, bridges and
mass transit systems over the Intermodal Surface Transportation Efficiency Act
of 1992.
TXI's Products. TXI's principal product is portland cement. The Company
also produces specialty cements such as white, masonry, adobe and oil well.
Manufacturing. TXI's cement production facilities are located at four sites
in Texas and California: Midlothian, Texas, south of Dallas/Fort Worth, the
largest cement plant in Texas; Hunter, Texas, south of Austin; and Oro Grande
and Crestmore, California, both near Los Angeles. The limestone reserves used as
the primary raw material are owned by the Company, except for the Crestmore
facility. Raw material for the Crestmore facility is purchased from outside
suppliers. Information regarding each of the Company's facilities is as follows:
<TABLE>
<CAPTION>
ANNUAL RATED
PRODUCTIVE ESTIMATED
CAPACITY -- MANUFACTURING MINIMUM
PLANT (TONS OF CLINKER) PROCESS SERVICE DATE RESERVES -- YEARS
----- ----------------- ------------- ------------ -----------------
<S> <C> <C> <C> <C>
Midlothian, TX............... 1,300,000 Wet 1960 100
Hunter, TX................... 800,000 Dry 1979 100
Oro Grande, CA............... 1,300,000 Dry 1948 90
Crestmore, CA................ 100,000 Dry 1962 N/A
</TABLE>
The Company uses its patented CemStar process in both of its Texas
facilities, which has increased combined annual production by approximately 10%.
The Company intends to add this process to its Oro Grande facility in the near
future. The CemStar process adds "slag," a co-product of steel-making, into a
cement kiln along with the regular raw material feed. The slag serves to
increase the production of clinker which is then ground to make cement. The
primary fuel source for all of the Company's facilities is coal; however, the
Company displaces approximately 35% of its coal needs at its Midlothian plant
and approximately 10% of its coal needs at its Hunter plant by utilizing
alternative fuels.
Raw Materials. The principal raw material used in the production of
portland cement is calcium carbonate in the form of limestone. Limestone is
obtained principally by mining and extracting from the Company's quarries
located in close proximity to its plants.
Marketing and Distribution. The Company markets its products throughout the
southwestern U.S. Its principal marketing area includes the states of Texas,
Louisiana, Oklahoma, California, Nevada, Arizona and Utah. Sales offices are
maintained throughout the marketing area and sales are made primarily to
numerous
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customers in the construction industry, none of which accounted for more than
10% of the Company's sales during fiscal 1997.
The Company distributes cement from its plants by rail or truck to eight
distribution terminals located throughout its marketing area.
Competition. The cement industry is highly competitive with suppliers
differentiating themselves based on price, service and quality.
AGGREGATE, CONCRETE AND OTHER PRODUCTS
Industry Overview. The construction aggregates business consists of the
mining, extraction, production and sale of stone, sand, gravel and lightweight
aggregates such as expanded shale and clay. Construction aggregates are employed
in virtually all types of construction, including highway construction and
maintenance. The concrete business involves the mixing of cement, sand, gravel,
crushed stone and water to form concrete which is subsequently marketed and
distributed to numerous construction contractors.
Demand for aggregate and concrete products largely depends on regional
levels of construction activity, and therefore tends to follow cycles similar to
those of cement. Both the aggregates and concrete industries are highly
fragmented, with numerous participants operating in localized markets. The cost
of transportation of both aggregate and concrete products is high relative to
their value, and consequently, producers are typically limited to a market area
within 100 miles of their production facilities. Similar to the market for
cement, the Company believes that the current favorable conditions, including
low interest rates, strong regional economies in Texas and California, as well
as the impact of ISTEA II, could lead to increased residential, non-residential
and public works construction activity, fueling the demand for aggregates and
concrete.
TXI's Products. TXI's principal products supplied by these businesses
include stone, sand and gravel, expanded shale and clay, ready-mix concrete,
concrete block and pipe and clay brick.
Manufacturing
Aggregates and Expanded Shale and Clay. The Company's aggregate business,
which includes stone, sand and gravel, and expanded shale and clay, is conducted
from facilities primarily serving the Dallas/Fort Worth, Austin and Houston
areas in Texas, the Alexandria, New Orleans, Baton Rouge and Monroe areas in
Louisiana, the Oakland/San Francisco and Los Angeles areas in California and the
Denver area in Colorado.
Ready-Mix Concrete and Concrete Products. The Company currently operates
46 ready-mix concrete plants and 447 ready-mix trucks in three areas in Texas
(Dallas/Fort Worth/Denton, East Texas and Houston), in northwest, northeast and
central Louisiana and at one location in southern Arkansas.
Raw Materials. Aggregates and expanded shale and clay reserves are either
owned or leased by the Company. The Company manufactures and supplies a
substantial amount of the cement and aggregates used by the ready-mix plants
with the remainder being purchased from outside suppliers.
Marketing and Distribution. Sales of these various products are generally
related to the level of construction activity within close proximity of the
plant location. The cost of transportation limits the marketing of these
products to the areas relatively close to the plant sites. Consequently, sales
of these products are related to the level of construction activity near these
plants. These products are marketed by the Company's sales organization located
in the areas served by the plants and are sold to numerous customers, none of
which would be considered significant to the Company's business. In aggregates
and expanded shale and clay products, the distribution of these products is
provided principally by contract or customer-owned haulers, and a limited amount
of these products is distributed by rail.
Competition. The Company competes with numerous suppliers of aggregate and
concrete products. In most of the Company's markets for these products, the
Company competes with a number of vertically integrated companies. The Company
believes that it is a significant competitor in each of the Texas and Louisiana
aggregate and concrete products markets.
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STEEL
Industry Overview
Production. There are currently two manufacturing processes utilized in the
production of steel. One process uses recycled steel as its principal raw
material. Companies with this process are generally referred to as recycled
steel-based producers and the steel plants are sometimes referred to as
"mini-mills." The other manufacturing process utilizes the traditional basic
oxygen furnace to make steel from iron ore, and companies with this process are
generally referred to as integrated producers. Recycled steel-based producers
employ electric-arc furnaces to melt recycled steel and typically experience
lower costs of production and higher productivity than integrated producers. As
a result, recycled steel producers have been able to capture large segments of
the steel market from integrated producers.
Structural Products. Structural products include wide flange beams,
standard beams, channels and other shapes that are primarily used in commercial,
retail, industrial, institutional and warehouse construction. Additional markets
include manufactured housing and public works construction. Annual consumption
of structural products in North America is approximately 8.0 million tons. Wide
flange beams, TXI's primary steel product, account for approximately 4.8 million
tons of the total structural products market. Wide flange beam capacity in North
America is currently 3.3 million tons, leaving a capacity shortfall of
approximately 1.5 million tons currently filled by imports.
Bar Products. Bar products consist of reinforcing bar, a commodity product,
and specialty bar products. Specialty bar products serve many applications
including OEM applications, tools and oil country goods. When combined,
specialty bar products currently account for approximately 8.0 million tons of
shipments in the U.S. Tight quality control, particularly when using recycled
steel as a raw material, is required to make these products. As a result,
relatively few recycled steel-based producers specialize in these products and
integrated producers still have a considerable market share.
Reinforcing bar goes into any type of construction that uses concrete. It
is the commodity product of the steel industry and many recycled steel-based
producers make the product. As a result, the market for reinforcing bar is very
regional.
TXI's Products. The Company's structural and bar products include beams
ranging from 4 to 24 inches in width, specialty bar products, reinforcing bar,
channels and merchant bar-quality rounds. The Company's Bantam Beams supply the
manufactured housing industry. On completion of its Virginia steel facility, the
Company's range of beams will increase to 36 inches in width. In addition, North
American and European sheet pile sections, products which are used in
excavation, waterway construction and foundation applications, will be made at
the Virginia facility.
Manufacturing. The Company operates a steel facility at Midlothian, Texas.
The Texas facility has two electric-arc furnaces with continuous casters which
feed two structural rolling mills and one bar rolling mill. The rated annual
capacity of the Texas steel facility is 1.8 million tons of melting and 1.9
million tons of rolling.
The Company has begun construction of a steel manufacturing facility near
Richmond, Virginia with a rated capacity of 1.2 million tons per year. The new
facility will be the first to combine near net shape casting technology with
state-of-the-art melting and rolling technology, providing the widest range of
structural steel products at the lowest cost.
Raw Materials. TXI's primary raw material is recycled steel, with steel
shredded by the Company's shredder currently representing 42% of the raw
material mix. The shredded material is primarily composed of crushed automobile
bodies purchased in the open market. Recycled steel that is not shredded by TXI
is purchased from numerous outside suppliers.
The Company's steel facility consumes large amounts of electricity and
natural gas. Electricity is currently obtained from a local electric utility
under an interruptible supply contract with price adjustments based on the
timing of electricity consumption. Natural gas is obtained from a local gas
utility under a supply contract. The Company believes that adequate supplies of
both electricity and natural gas are readily available.
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<PAGE> 59
Marketing and Distribution. The Company's products are marketed throughout
the United States and to a limited extent in Canada and Mexico. Sales are
primarily to steel service centers and steel fabricators for use in the
construction industry, as well as to cold finishers, forgers and OEMs for use in
the railroad, defense, automotive, mobile home and energy industries. Finished
products are delivered by Company-owned trucks, common carriers, customer-owned
trucks, rail and barge.
Competition. The Company competes with steel producers, including foreign
producers, on the basis of price, quality and service. Certain of the Company's
foreign and domestic competitors, including both large integrated steel
producers and other recycled steel-based producers, have substantially greater
assets and larger sales organizations.
DESCRIPTION OF THE PREFERRED SECURITIES
GENERAL
The Preferred Securities will be issued pursuant to the terms of the Trust
Agreement. The Trust Agreement will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee will act as the Indenture Trustee for
purposes of compliance with the provisions of the Trust Indenture Act. The terms
of the Preferred Securities will include those stated in the Trust Agreement and
those made part of the Trust Agreement by the Trust Indenture Act. The following
summary of the principal terms and provisions of the Preferred Securities does
not purport to be complete and is subject in all respects to, and qualified in
its entirety by reference to, the Trust Agreement, a copy of which is filed as
an exhibit to the Registration Statement of which this Prospectus forms a part,
the Trust Act and the Trust Indenture Act.
The Trust Agreement authorizes the Administrative Trustees, on behalf of
the Trust, to issue the Preferred Securities, which represent preferred
undivided beneficial interests in the assets of the Trust, and the Common
Securities, which represent common undivided beneficial interests in the assets
of the Trust. All of the Common Securities will be owned by TXI. The Common
Securities rank pari passu, and payments will be made thereon on a pro rata
basis with, the Preferred Securities except that, upon the occurrence of a Trust
Agreement 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 Preferred Securities. The Trust Agreement does not permit the Trust to issue
any securities other than the Trust Securities or to incur any indebtedness.
Pursuant to the Trust Agreement, the Property Trustee will own and hold the
Convertible Subordinated Debentures for the benefit of the holders of the Trust
Securities. The payment of Distributions out of funds held by the Trust, and
payments upon redemption of the Preferred Securities or liquidation of the
Trust, are guaranteed by TXI on a subordinated basis as and to the extent
described under "Description of the Preferred Securities Guarantee." The
Preferred Guarantee Trustee will hold the Preferred Securities Guarantee for the
benefit of the holders of the Preferred Securities. The Preferred Securities
Guarantee does not cover payment of Distributions on the Preferred Securities
when the Trust does not have sufficient available funds in the Property Account
to make such Distributions. In such event, the remedy of a holder of Preferred
Securities is to (i) vote to appoint a Special Administrative Trustee, (ii)
direct the Property Trustee to enforce its rights under the Convertible
Subordinated Debentures or (iii) if the failure of the Trust to pay
Distributions is attributable to the failure of TXI to pay interest or principal
on the Convertible Subordinated Debentures, institute a proceeding directly
against TXI for enforcement of payment to such holder of the principal or
interest on the Convertible Subordinated Debentures having a principal amount
equal to the aggregate liquidation amount of the Preferred Securities of such
holder on or after the respective due date specified in the Convertible
Subordinated Debentures. See "Description of the Preferred Securities -- Voting
Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at an annual rate
of % of the stated liquidation amount of $50 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon at
the annual rate of % thereof. The term "Distributions" as used herein includes
any such interest
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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.
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1998 and will be payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year to the holders of record on the
applicable record date, commencing , 1998 when, as and if available for
payment by the Property Trustee, except as otherwise described below. The
Distribution on , 1998 will include the period from , 1998 to
, 1998.
TXI has the right at any time, so long as no Indenture Event of Default has
occurred and is continuing, under the Indenture to defer payments of interest on
the Convertible Subordinated Debentures by extending the interest payment period
from time to time on the Convertible Subordinated Debentures (each, an
"Extension Period") which, if exercised, would defer quarterly Distributions on
the Preferred Securities (though such Distributions would continue to accrue
interest since interest would continue to accrue on the Convertible Subordinated
Debentures) during any such extended interest payment period. In the event that
TXI exercises this right, then TXI will not and shall not permit any subsidiary
to, (i) declare or pay any dividends or distributions on or redeem, purchase,
acquire or make a liquidation payment with respect to, any of TXI's capital
stock, (ii) make any payment of principal of, premium, if any, or interest on or
repay, repurchase or redeem any debt security of TXI that ranks pari passu with
or junior in interest to the Convertible Subordinated Debentures or (iii) make
any guarantee payments with respect to any guarantee by TXI of the debt
securities of any subsidiary if such guarantee ranks pari passu with or junior
in interest to the Convertible Subordinated Debentures (other than (a) dividends
or distributions in TXI's capital stock, (b) any declaration of a dividend in
connection with the implementation of a Rights Plan or the redemption or
repurchase of any rights distributed pursuant to a Rights Plan, (c) payments
under the Preferred Securities Guarantee and (d) purchases of TXI Common Stock
related to the issuance of TXI Common Stock or rights under any of TXI's benefit
plans for its directors, officers or employees, related to the issuance of TXI
Common Stock or rights under a dividend reinvestment and stock purchase plan or
related to the issuance of TXI Common Stock (or securities convertible or
exchangeable for TXI Common Stock) as consideration in an acquisition
transaction that was entered into prior to the commencement of such Extension
Period). Prior to the termination of any such Extension Period, TXI may further
extend the interest payment period, provided that (1) such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarters and (2) no Extension Period may extend beyond the maturity
of the Convertible Subordinated Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, TXI may elect a new
Extension Period as if no Extension Period had previously been declared, subject
to the above requirements. See "Description of the Convertible Subordinated
Debentures -- Interest" and "Description of the Convertible Subordinated
Debentures -- Option to Extend Interest Payment Period." If Distributions are
deferred, the deferred Distributions and accrued interest thereon will be paid
to holders of record of the Preferred Securities, if funds are available
therefor, as they appear on the books and records of the Trust on the record
date next following the termination of such Extension Period.
Distributions on the Preferred Securities will be paid on the dates payable
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 Preferred Securities will be limited to
payments received under the Convertible Subordinated Debentures. See
"Description of the Convertible Subordinated Debentures." The payment of
distributions out of funds held by the Trust is guaranteed by TXI to the extent
set forth under "Description of the Preferred Securities Guarantee."
Distributions on the Preferred 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 Preferred Securities remain in book-entry
only form, will be one Business Day (as defined herein) prior to the relevant
payment dates. Such Distributions will be paid through the Property Trustee, who
will hold amounts received in respect of the Convertible Subordinated Debentures
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 Trust
Agreement, each such payment will be made as described under "Book-Entry Only
Issuance -- The Depository Trust Company." In the event the Preferred Securities
do not continue to remain in book-entry only form, the
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record date will be the 15th day of the month in which the relevant payment date
occurs. In the event that any date on which Distributions are to be made on the
Preferred Securities is not a Business Day, payment of the Distributions payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment will
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date. A "Business Day" is any day other than
Saturday, Sunday or day on which banking institutions in The City of New York or
the State of Delaware are authorized or required by law to close.
CONVERSION RIGHTS
Each Preferred Security is convertible, at the option of the holder, at any
time, into shares of TXI Common Stock. A holder of Preferred Securities wishing
to exercise conversion rights shall deliver any or all of its Preferred
Securities to the Conversion Agent, which shall exchange such Preferred
Securities for a portion (equal to the aggregate liquidation preference of the
Preferred Securities being converted) of the Convertible Subordinated Debentures
held by the Trust and immediately convert such Convertible Subordinated
Debentures into TXI Common Stock. See "Description of Convertible Subordinated
Debentures -- Conversion Rights."
Accrued Distributions will not be paid on Preferred Securities that are
converted, nor will any payment, allowance or adjustment be made for accumulated
and unpaid Distributions, whether or not in arrears, on converted Preferred
Securities, except that if any Preferred Security is converted (i) on or after a
record date for payment of Distributions thereon, the amount of the
Distributions payable on the related payment date with respect to such Preferred
Security will be paid by the converting holder to the Trust and the
Distributions payable on the related payment date with respect to such Preferred
Security will be distributed to the holder on such payment date, despite such
conversion, and (ii) during an Extension Period and after the Property Trustee
mails a notice of redemption with respect to the Preferred Securities that are
converted, accrued and unpaid Distributions through the date of conversion on
such Preferred Securities called for redemption will be distributed to the
holder who converts such Preferred Securities, which Distribution shall be made
on the redemption date fixed for redemption. Except as provided above, neither
the Trust nor TXI will be required to make any payment, allowance or adjustment
upon any conversion on account of any accumulated and unpaid Distribution
accrued on the Preferred Securities surrendered for conversion, or on account of
any accumulated and unpaid dividends, if any, on the shares of TXI Common Stock
issued upon such conversion. Trust Securities will be deemed to have been
converted immediately prior to 5:00 p.m. (New York City time) on the day on
which a conversion request relating to such Trust Securities is received by the
Trust (the "Conversion Date").
MANDATORY REDEMPTION
The Convertible Subordinated Debentures will mature on ,
2028, and may be redeemed, in whole or in part, at any time on or after
, 2001, or at any time, in whole or in part, in certain
circumstances upon the occurrence of a Tax Event. Upon the repayment of the
Convertible Subordinated Debentures, whether at maturity or upon redemption, the
proceeds from such repayment or payment simultaneously will be applied to redeem
Trust Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Convertible Subordinated Debentures so repaid or
redeemed at the Redemption Price; provided that holders of Preferred Securities
will be given not less than 30 nor more than 60 days notice of such redemption.
See "Description of the Convertible Subordinated Debentures." In the event that
fewer than all of the outstanding Preferred Securities are to be redeemed, the
Preferred Securities will be redeemed as described under "Book-Entry Only
Issuance -- The Depository Trust Company."
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Administrative Trustees shall have received an
opinion from independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
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States or any political subdivision or taxing authority thereof or therein or
(b) any amendment to, or change in, an interpretation or application of such
laws or regulations, there is more than an insubstantial risk that (i) the Trust
would be subject to United States federal income tax with respect to income
accrued or received on the Convertible Subordinated Debentures, (ii) interest
payable to the Trust on the Convertible Subordinated Debentures would not be
deductible, in whole or in part, by TXI for United States federal income tax
purposes or (iii) the Trust would be subject to more than a de minimis amount of
other taxes, duties or other governmental charges, which change or amendment
becomes effective on or after the date of this Prospectus.
"Investment Company Event" means that the Administrative Trustees shall
have received an opinion from independent counsel to the effect that, as a
result of the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law
becomes effective on or after the date of this Prospectus.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined above, a "Special Event") shall occur and be continuing, the Trust,
except in the circumstances described below, will be dissolved with the result
that, after satisfaction of the liabilities of the Trust to creditors,
Convertible Subordinated Debentures with an aggregate principal amount equal to
the aggregate stated liquidation amount of, with an interest rate identical to
the distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid Distributions on, the Preferred Securities would be distributed to the
holders of the Preferred Securities, in liquidation of such holders' interests
in the Trust on a pro rata basis, within 90 days following the occurrence of
such Special Event; provided, however, that in the case of the occurrence of a
Tax Event, as a condition of such dissolution and distribution, the
Administrative Trustees shall have received an opinion from independent tax
counsel experienced in such matters (a "No Recognition Opinion"), which opinion
may rely on published revenue rulings of the Internal Revenue Service, to the
effect that the holders of the Preferred Securities will not recognize any gain
or loss for United States federal income tax purposes as a result of such
dissolution and distribution of Convertible Subordinated Debentures; and,
provided, further, that, if at the time there is available to the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Trust, TXI or the holders of the Preferred Securities, the Trust will pursue
such measure in lieu of dissolution. Furthermore, if in the case of the
occurrence of a Tax Event, (i) TXI has received an opinion from independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that TXI would be precluded from deducting the
interest on the Convertible Subordinated Debentures for United States federal
income tax purposes even after the Convertible Subordinated Debentures were
distributed to the holders of Preferred Securities in liquidation of such
holders' interests in the Trust as described above or (ii) the Administrative
Trustees shall have been informed by such tax counsel that a No Recognition
Opinion cannot be delivered, TXI shall have the right, upon not less than 30 nor
more than 60 days notice, to redeem the Convertible Subordinated Debentures in
whole or in part for cash within 90 days following the occurrence of such Tax
Event, and, following such redemption, Preferred Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Convertible
Subordinated Debentures so redeemed shall be redeemed by the Trust at the
Redemption Price on a pro rata basis; provided, however, that, if at the time
there is available to TXI or the Trust the opportunity to eliminate, within such
90 day period, the Tax Event by taking some ministerial action, such as filing a
form or making an election, or pursuing some other similar reasonable measure
which has no adverse effect on the Trust, the holders of the Preferred
Securities or TXI, the Trust will pursue such measure in lieu of redemption.
If Convertible Subordinated Debentures are distributed to the holders of
the Preferred Securities, TXI will use its best efforts to have the Convertible
Subordinated Debentures listed on the NYSE or on such other exchange as the
Preferred Securities are then listed.
After the date for any distribution of Convertible Subordinated Debentures
upon dissolution of the Trust, (i) the Preferred Securities and Preferred
Securities Guarantee will no longer be deemed to be outstanding,
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(ii) the depositary or its nominee, as the record holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Convertible Subordinated Debentures to be delivered upon such
distribution and (iii) any certificates representing Preferred Securities and
the Preferred Securities Guarantee not held by the depositary or its nominee
will be deemed to represent Convertible Subordinated Debentures having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid Distributions on, such Preferred
Securities, until such certificates are presented to TXI or its agent for
transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Convertible Subordinated Debentures that may be distributed in
exchange for the Preferred Securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the Preferred Securities that an investor may
purchase, or the Convertible Subordinated Debentures that the investor may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Preferred Securities offered
hereby.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid Distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred
Securities, then, by 12:00 noon, New York City time, on the redemption date,
provided that TXI has paid to the Property Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the Convertible
Subordinated Debentures, the Property Trustee will irrevocably deposit with the
depositary funds sufficient to pay the applicable Redemption Price and will give
the depositary irrevocable instructions and authority to pay the Redemption
Price to the holders of the Preferred Securities. See "Book-Entry Only
Issuance -- The Depository Trust Company." 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 and
all rights of holders of such Preferred Securities so called for redemption will
cease, except the right of the holders of such Preferred Securities to receive
the Redemption Price, but without interest on such Redemption Price. In the
event that any date fixed for redemption of Preferred Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the Redemption
Price in respect of Preferred Securities is improperly withheld or refused and
not paid either by the Trust or by TXI pursuant to the Preferred Securities
Guarantee, Distributions on such Preferred Securities will continue to accrue
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities
are to be redeemed, the Preferred Securities will be redeemed as described under
"Book-Entry Only Issuance -- The Depository Trust Company."
Subject to the foregoing and to applicable law, TXI or its affiliates, at
any time and from time to time, may purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust, the holders of the Preferred Securities
at that time will be entitled to receive out of the assets of the Trust, after
satisfaction of liabilities to creditors, distributions in an amount equal to
the aggregate of the stated liquidation amount of $50 per Preferred Security
plus accrued and unpaid Distributions thereon to the date of payment (the
"Liquidation Distribution"), unless, in connection with such liquidation,
dissolution, winding-up
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or termination, Convertible Subordinated Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on, the Preferred Securities have been
distributed on a pro rata basis to the holders of Preferred Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities shall be paid on a pro rata basis. The holders
of the Common Securities will be entitled to receive distributions upon any such
dissolution pro rata with the holders of the Preferred Securities, except that
if an Indenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities with respect to
such distributions.
Pursuant to the Trust Agreement, the Trust shall dissolve (i) on
, 2028, the expiration of the term of the Trust, (ii) upon the
bankruptcy of TXI, (iii) upon the filing of a certificate of dissolution or its
equivalent with respect to TXI (except for permitted mergers, consolidations or
reorganizations of TXI) or the revocation of the charter of TXI and the
expiration of 90 days after the date of revocation without a reinstatement
thereof, (iv) the occurrence of a Special Event, (v) upon the redemption of all
of the Trust Securities in connection with the redemption of all of the
Convertible Subordinated Debentures, (vi) upon the written direction to the
Property Trustee from TXI at any time to terminate the Trust and, after
satisfaction of liabilities to creditors of the Trust as provided by law,
distribute Convertible Subordinated Debentures in exchange for the Preferred
Securities (which direction is optional and wholly within the discretion of
TXI), (vii) upon the distribution of TXI Common Stock to all holders of
Preferred Securities upon conversion of all outstanding Preferred Securities or
(viii) upon the entry of a decree of a judicial dissolution of the Trust.
TRUST AGREEMENT EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Trust Agreement with respect to the
Trust Securities (a "Trust Agreement Event of Default"), provided that pursuant
to the Trust Agreement the holder of the Common Securities will be deemed to
have waived any Trust Agreement Event of Default with respect to the Common
Securities until all Trust Agreement Events of Default with respect to the
Preferred Securities have been cured, waived or otherwise eliminated. Until such
Trust Agreement Events of Default with respect to the Preferred Securities have
been so cured, waived or otherwise eliminated, the Property Trustee will be
deemed to be acting solely on behalf of the holders of the Preferred Securities
and only the holders of the Preferred Securities will have the right to direct
the Property Trustee with respect to certain matters under the Trust Agreement
and therefore under the Indenture. In the event that any Trust Agreement Event
of Default with respect to the Preferred Securities is waived by the holders of
the Preferred Securities as provided in the Trust Agreement, the holders of
Common Securities pursuant to the Trust Agreement have agreed that such waiver
also would constitute a waiver of such Trust Agreement Event of Default with
respect to the Common Securities for all purposes under the Trust Agreement
without any further act, vote or consent of the holders of Common Securities.
See "Description of the Preferred Securities -- Voting Rights."
If the Property Trustee fails to enforce its rights under the Convertible
Subordinated Debentures, any holder of Preferred Securities may directly
institute a legal proceeding against TXI to enforce the Property Trustee's
rights under the Convertible Subordinated Debentures, without first instituting
any legal proceeding against the Property Trustee or any other person or entity.
Notwithstanding the foregoing, if a Trust Agreement Event of Default has
occurred and is continuing and such event is attributable to the failure of TXI
to pay interest or principal on the Convertible Subordinated Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, the redemption date), then a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Convertible Subordinated Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Convertible Subordinated Debentures. In connection with such action, TXI will be
subrogated to the rights of such holder of Preferred Securities under the Trust
Agreement to the extent of any payment made by
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TXI to such holder of Preferred Securities in such action. The holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Convertible Subordinated Debentures.
Upon the occurrence of a Trust Agreement Event of Default, the Property
Trustee, as the sole holder of the Convertible Subordinated Debentures, will
have the right under the Indenture to declare the principal of and interest on
the Convertible Subordinated Debentures to be immediately due and payable.
VOTING RIGHTS
Except as provided below, under the Trust Indenture Act and "Description of
the Preferred Securities Guarantee -- Amendments and Assignment" and as
otherwise required by law and the Trust Agreement, the holders of the Preferred
Securities will have no voting rights.
If (i) the Trust fails to pay Distributions in full on the Preferred
Securities for six consecutive quarterly distribution periods, or (ii) a Trust
Agreement Event of Default occurs and is continuing (each, an "Appointment
Event"), then the holders of the Preferred Securities, acting as a single class,
will be entitled by the majority vote of such holders to appoint a Special
Administrative Trustee. For purposes of determining whether the Trust has failed
to pay Distributions in full for six consecutive quarterly distribution periods,
Distributions shall be deemed to remain in arrears, notwithstanding any payments
in respect thereof, until full cumulative Distributions have been or
contemporaneously are paid with respect to all quarterly distribution periods
terminating on or prior to the date of payment of such cumulative Distributions.
Any holder of Preferred Securities (other than TXI or any of its affiliates)
shall be entitled to nominate any person to be appointed a Special
Administrative Trustee. Not later than 30 days after such right to appoint a
Special Administrative Trustee arises, the Administrative Trustees shall convene
a meeting of the holders of Preferred Securities for the purpose of appointing a
Special Administrative Trustee. If the Administrative Trustees fail to convene
such meeting within such 30-day period, the holders of not less then 10% of the
aggregate stated liquidation amount of the outstanding Preferred Securities will
be entitled to convene such meeting. The provisions of the Trust Agreement
relating to the convening and conduct of the meetings of the holders will apply
with respect to any such meeting. Any Special Administrative Trustee so
appointed shall cease to be a Special Administrative Trustee if the Appointment
Event pursuant to which the Special Administrative Trustee was appointed and all
other Appointment Events cease to be continuing. Notwithstanding the appointment
of any Special Administrative Trustee, TXI shall retain all rights under the
Indenture, including the right to declare an Extension Period as provided under
"Description of the Convertible Subordinated Debentures -- Option to Extend
Interest Payment Period." If such an Extension Period occurs, there will be no
Indenture Event of Default, and therefore no Trust Agreement Event of Default,
for failure to make any scheduled interest payment during the Extension Period
on the date originally scheduled.
The holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or to direct the
exercise of any trust or power conferred upon the Property Trustee under the
Trust Agreement, including the right to direct the Property Trustee, as the
holder of the Convertible Subordinated Debentures, to (i) direct the time,
method or place of conducting any proceeding for any remedy available to the
Indenture Trustee or exercise any trust or power conferred on the Indenture
Trustee with respect to the Convertible Subordinated Debentures, (ii) waive any
past Indenture Event of Default which is waivable under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Convertible Subordinated Debentures shall be due and payable or (iv) consent
to any amendment, modification or termination of the Indenture or the
Convertible Subordinated Debentures where such consent shall be required. If the
Property Trustee fails to enforce its rights under the Convertible Subordinated
Debentures, a holder of Preferred Securities may institute a legal proceeding
directly against TXI to enforce the Property Trustee's rights under the
Convertible Subordinated Debentures without first instituting any legal
proceeding against the Property Trustee or any other person or entity. The
Property Trustee will notify all holders of the Preferred Securities of any
notice of default received from the Indenture Trustee with respect to the
Convertible Subordinated Debentures. Such notice will state that such Indenture
Event of Default also constitutes a Trust Agreement Event of Default. Except
with respect to directing the time, method and place of conducting a proceeding
for a remedy, the Property Trustee will not take any action described in clauses
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(i), (ii), (iii) or (iv) above unless the Property Trustee has obtained an
opinion of independent 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 Property Trustee, as the holder of the
Convertible Subordinated Debentures, is required under the Indenture with
respect to any amendment, modification or termination of the Indenture, the
Property Trustee will request the direction of the holders of the Preferred
Securities with respect to such amendment, modification or termination and will
vote with respect to such amendment, modification or termination as directed by
a majority in liquidation amount of the Preferred Securities voting together as
a single class. The Property Trustee will not take any such action in accordance
with the directions of the holders of the Preferred Securities unless the
Property Trustee has obtained an opinion of independent 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.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the holders of the Preferred Securities will constitute a waiver of
the corresponding Trust Agreement Event of Default.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or pursuant
to written consent. The Administrative Trustees will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be mailed to each holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the holders of
Preferred Securities will be required for the Trust to redeem and cancel
Preferred Securities or distribute Convertible Subordinated Debentures in
accordance with the Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by TXI or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with TXI, will not be entitled to vote or consent and, for purposes of
such vote or consent, will be treated as if they were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "Book-Entry Only Issuance -- The
Depository Trust Company."
Except in the limited circumstances described above in connection with the
appointment of a Special Administrative Trustee, holders of the Preferred
Securities will have no rights to appoint or remove the trustees, who may be
appointed, removed or replaced solely by TXI, as the direct or indirect holder
of all the Common Securities.
MODIFICATION OF THE TRUST AGREEMENT
The Trust Agreement may be amended from time to time by the Property
Trustee, the Administrative Trustees and TXI, without the consent of any holders
of Preferred Securities, (i) to cure any ambiguity, correct or supplement any
provision therein which may be inconsistent with any other provision therein, or
to make any other provisions with respect to matters or questions arising under
the Trust Agreement, which shall not be inconsistent with the other provisions
of this Trust Agreement, or (ii) to modify, eliminate or add to any provisions
of the Trust Agreement to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes as a
grantor trust at all times that any Preferred Securities are outstanding or to
ensure that the Trust will not be required to register as an investment company
under the 1940 Act; provided, however, that in the case of clause (i) or clause
(ii), such action shall not adversely affect in any material respect the
interests of any holder of Preferred Securities. Any such
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amendments of the Trust Agreement shall become effective when notice thereof is
given to the holders of Preferred Securities.
Any provision of the Trust Agreement may be amended by the Trustee and TXI
with (i) the consent of holders of Preferred Securities representing not less
than a majority (based upon liquidation amounts) of the Preferred Securities
then outstanding and (ii) receipt by the Trustees of an opinion of counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the Trust's status as
a grantor trust for United States federal income tax purposes or the Trust's
exemption from status of an investment company under the 1940 Act; provided
that, without the consent of each affected holder, the Trust Agreement may not
be amended to (a) change the amount or timing of any Distribution on the
Preferred Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Preferred Securities as of a
specified date or (b) restrict the right of a holder to institute suit for the
enforcement of any such payment on or after such date.
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. The Trust, with the consent of a majority of the Administrative
Trustees and without the consent of the holders of the Preferred Securities, may
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to a
trust organized as such under the laws of any State, provided, that (i) such
successor entity either (x) expressly assumes all of the obligations of the
Trust with respect to the Preferred Securities or (y) substitutes for the
Preferred Securities other securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Preferred Securities rank in priority with
respect to distributions and payments upon liquidation, redemption and
otherwise, (ii) TXI expressly appoints a trustee of such successor entity
possessing the same powers and duties as the Property Trustee as the holder of
the Convertible Subordinated Debentures, (iii) the Successor Securities are
listed or traded, or any Successor Securities will be listed upon notification
of issuance, on any national securities exchange or other organization on which
the Preferred Securities are then listed or traded, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (v)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Preferred Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), (vi) such successor entity has a purpose
substantially identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, TXI has
received an opinion from independent counsel to the Trust experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect (other than with respect to
any dilution of the holders' interest in the new entity) and (b) following such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act and (viii) TXI owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Preferred Securities Guarantee. Notwithstanding the foregoing, the Trust
will not, except with the consent of holders of 100% in liquidation amount of
the Preferred Securities, 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 other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or the successor entity to be classified for United States federal Income
tax purposes as other than a grantor trust. In addition, so long as any
Preferred Securities are outstanding and are not held entirely by TXI, the Trust
may not voluntarily liquidate, dissolve, wind-up or terminate except as
described above under "Special Event Redemption or Distribution."
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BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depository for
the Preferred Securities. The Preferred Securities will be issued only as fully
registered securities registered in the name of Cede & Co. (DTC's nominee). One
or more fully registered global Preferred Securities certificates will be
issued, representing in the aggregate the total number of Preferred 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 a global Preferred
Security.
DTC 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 (as
defined herein). 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.
Direct Participants 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
NYSE, the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the DTC system also is available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a 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 Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
Preferred Securities ("Beneficial Owner") is in turn to be recorded on the
Direct or Indirect Participant's 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 Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred 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 Preferred Securities, except in the event that use
of the book-entry system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited
by Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Preferred Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Preferred Securities. DTC's record reflect
only the identity of the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
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 will be sent to Cede & Co. if less than all of the
Preferred Securities are being redeemed, DTC will use a lottery to select
certain of the Preferred Securities to be redeemed in accordance with its
procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The
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Omnibus Proxy assigns Cede & Co. consenting or voting rights to those Direct
Participants to whose accounts the Preferred Securities are credited on the
record date (identified in a listing attached to the Omnibus Proxy). TXI and the
Trust believe the arrangements among DTC, Direct and Indirect Participants and
Beneficial Owners will enable the Beneficial Owners to exercise rights
equivalent in substance to the rights that can be directly exercised by a holder
of a beneficial interest in the Trust.
Distribution payments on the Preferred Securities will be made to DTC.
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 Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as in the case with securities
held for the account of customers in bearer form or registered in "street name,"
and will be the responsibility of such Participant and not of DTC, the Trust,
any trustee or TXI, 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 disbursements of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Preferred
Security will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
the Trust. Under such circumstances, in the event that a successor securities
depositary is not obtained, Preferred Securities certificates are required to be
printed and delivered. Additionally, TXI may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary) with
respect to the Preferred Securities. In that event, certificates for the
Preferred Securities will be printed and delivered.
The information in this Section concerning DTC and DTC's book-entry system
have been obtained from sources that TXI and the Trust believe to be reliable,
but TXI and the Trust take no responsibility for the accuracy thereof.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default, with respect to
the Trust Securities, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after default, shall exercise the same
degree of care as a prudent individual would exercise in the conduct of his or
her own affairs. Subject to such provisions, the Property Trustee is under no
obligation to exercise any of the powers vested in it by the Trust Agreement at
the request of any holder of Preferred Securities, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Property Trustee also serves as Preferred Guarantee
Trustee under the Preferred Securities Guarantee.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
In the event that the Preferred Securities do not remain in book-entry only
form, the Property Trustee will act as paying agent and may designate an
additional or substitute paying agent at any time. Registration of transfers of
Preferred 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 TXI
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 of Preferred Securities after such Preferred
Securities have been called for redemption.
GOVERNING LAW
The Trust Agreement and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
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MISCELLANEOUS
The Administrative Trustees are authorized and directed to operate the
Trust in such a way so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act or characterized for
United States federal income tax purposes as other than a grantor trust. In this
connection, the Administrative Trustees and TXI are authorized to take any
action, not inconsistent with applicable law or the Trust Agreement, that each
of the Administrative Trustees and TXI determines in its discretion to be
necessary or desirable for such purposes, as long as such action does not
materially and adversely affect the interests of the holders of the Preferred
Securities.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee that will be executed and delivered by TXI for the benefit
of the holders from time to time of Preferred Securities. The Preferred
Securities Guarantee will be qualified as an indenture under the Trust Indenture
Act. The First National Bank of Chicago will act as indenture trustee under the
Preferred Securities Guarantee (the "Preferred Guarantee Trustee") including for
purposes of the Trust Indenture Act. The terms of the Preferred Securities
Guarantee will be those set forth therein and those made part thereof by the
Trust Indenture Act. The following summary 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 Preferred Securities Guarantee, a copy of which is
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part, and the Trust Indenture Act. The Preferred Securities Guarantee will be
held by the Preferred Guarantee Trustee for the benefit of holders of the
Preferred Securities.
GENERAL
Pursuant to the Preferred Securities Guarantee, TXI will irrevocably agree,
to the extent set forth therein, to pay in full to the holders of the Preferred
Securities, the Guarantee Payments (as defined below) (without duplication of
amounts theretofore paid by the Trust), to the extent not paid by the Trust,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert. The following payments or distributions with respect to the
Preferred Securities to the extent not paid or made by the Trust (the "Guarantee
Payments") will be subject to the Preferred Securities Guarantee (without
duplication): (i) any accrued and unpaid Distributions on the Preferred
Securities where TXI has made a payment of principal, premium or interest on the
Convertible Subordinated Debentures held by the Property Trustee, (ii) the
Redemption Price, including all accrued and unpaid dividends to the date of the
redemption, to the extent the Trust has funds available therefor with respect to
the Preferred Securities called for redemption by the Trust and (iii) upon a
liquidation of the Trust (other than in connection with the distribution of
Convertible Subordinated Debentures to the holders of Preferred Securities or
the redemption of all of the Preferred Securities), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Trust has
funds available therefor and (b) the amount of assets of the Trust remaining
available for distribution to holders of Preferred Securities in liquidation of
the Trust. TXI's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by TXI to the holders of Preferred
Securities or by causing the Trust to pay such amounts to such holders.
If TXI does not make interest payments on the Convertible Subordinated
Debentures held by the Property Trustee, the Trust will not make distributions
on the Preferred Securities. The Preferred Securities Guarantee will guarantee,
on a subordinated basis, the Guarantee Payments with respect to the Preferred
Securities from the time of issuance of the Preferred Securities, but will not
apply to the payment of Distributions and other payments on the Preferred
Securities when the Property Trustee does not have sufficient funds in the
Property Account to make such Distributions or other payments. The Preferred
Securities Guarantee, when taken together with TXI's obligations under the
Convertible Subordinated Debentures, the Indenture and the Trust Agreement,
including its obligations to pay costs, expenses, debts and
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liabilities of the Trust (other than with respect to the Common Securities),
will provide a full and unconditional guarantee on a subordinated basis by TXI
of amounts due on the Preferred Securities.
CERTAIN COVENANTS OF TXI
In the Preferred Securities Guarantee, TXI will covenant that, so long as
the Preferred Securities remain outstanding, if there shall have occurred and is
continuing any event that would constitute an event of default under the
Preferred Securities Guarantee or the Trust Agreement, then TXI will not and
shall not permit any subsidiary to, (i) declare or pay any dividends or
distributions on or redeem, purchase, acquire or make a liquidation payment with
respect to, any of TXI's capital stock, (ii) make any payment of principal of,
premium, if any, or interest on or repay, repurchase or redeem any debt security
of TXI that ranks pari passu with or junior in interest to the Convertible
Subordinated Debentures or (iii) make any guarantee payments with respect to any
guarantee by TXI of the debt securities of any subsidiary if such guarantee
ranks pari passu with or junior in interest to the Convertible Subordinated
Debentures (other than (a) dividends or distributions in TXI's capital stock,
(b) any declaration of a dividend in connection with the implementation of a
Rights Plan or the redemption or repurchase of any rights distributed pursuant
to a Rights Plan, (c) payments under the Preferred Securities Guarantee and (d)
purchases of TXI Common Stock related to the issuance of TXI Common Stock or
rights under any of TXI's benefit plans for its directors, officers or
employees, related to the issuance of TXI Common Stock or rights under a
dividend reinvestment and stock purchase plan or related to the issuance of TXI
Common Stock (or securities convertible or exchangeable for TXI Common Stock) as
consideration in an acquisition transaction that was entered into prior to the
commencement of such Extension Period).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of Preferred Securities (in which case no consent will be
required), the Preferred Securities Guarantee may be amended only with the prior
approval of the holders of not less than 50% in aggregate liquidation amount of
the outstanding Preferred Securities. The manner of obtaining any such approval
of holders of the Preferred Securities is set forth under "Description of the
Preferred Securities -- Voting Rights." All guarantees and agreements contained
in the Preferred Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of TXI and shall inure to the benefit of
the holders of the Preferred Securities then outstanding.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will terminate and be of no further
force and effect as to the Preferred Securities upon full payment of the
Redemption Price of all Preferred Securities, upon distribution of the
Convertible Subordinated Debentures to the holders of Preferred Securities, or
upon full payment of the amounts payable upon liquidation of the Trust. See
"Description of the Convertible Subordinated Debentures -- Indenture Events of
Default" for a description of the events of default and enforcement rights of
the holders of Convertible Subordinated Debentures. The Preferred Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Preferred Securities must repay to the Trust or
TXI, or their respective successors, any sums paid to them under the Preferred
Securities or the Preferred Securities Guarantee.
EVENTS OF DEFAULT
An event of default under a Preferred Securities Guarantee will occur upon
the failure of TXI to perform any of its payment or other obligations
thereunder.
The holders of a majority in liquidation amount of the Preferred Securities
relating to such Preferred Securities Guarantee have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee in respect of the Preferred Securities Guarantee
or to direct the exercise of any trust or power conferred upon the Preferred
Guarantee Trustee under the Preferred
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Securities Guarantee. Any holder of Preferred Securities may institute a legal
proceeding directly against TXI to enforce such holder's rights under the
Preferred Securities Guarantee, without first instituting a legal proceeding
against the Trust, the Preferred Guarantee Trustee or any other person or
entity. Notwithstanding the foregoing, if a Trust Agreement Event of Default has
occurred and is continuing and such event is attributable to the failure of TXI
to pay interest or principal on the Convertible Subordinated Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, the redemption date), then a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Convertible Subordinated Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder on or after the respective due date specified in the
Convertible Subordinated Debentures. In connection with such action, TXI will be
subrogated to the rights of such holder of Preferred Securities under the Trust
Agreement to the extent of any payment made by TXI to such holder of Preferred
Securities in such action. The holders of Preferred Securities will not be able
to exercise directly any other remedy available to the holders of the
Convertible Subordinated Debentures.
STATUS OF THE PREFERRED SECURITIES GUARANTEE
TXI's obligations under the Preferred Securities Guarantee to make the
Guarantee Payments will constitute an unsecured obligation of TXI and will rank
(i) subordinate and junior in right of payment to all other liabilities of TXI,
including the Convertible Subordinated Debentures, except those made pari passu
or subordinate by their terms, and (ii) pari passu with the most senior
preferred stock now or hereafter issued by TXI and with any guarantee now or
hereafter entered into by TXI in respect of any preferred security of any
affiliate of TXI. The terms of the Preferred Securities provide that each holder
of Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Preferred Securities Guarantee. In addition,
because TXI is a holding company, its obligations under the Preferred Securities
Guarantee are effectively subordinated to all existing and future liabilities of
its subsidiaries.
The Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
guarantee without first instituting a legal proceeding against any other person
or entity). The Preferred Securities Guarantee will be deposited with the
Property Trustee to be held for the benefit of the holders of the Preferred
Securities. Except as otherwise noted herein, the Property Trustee has the right
to enforce the Preferred Securities Guarantee on behalf of the holders of the
Preferred Securities. The Preferred Securities Guarantee will not be discharged
except by payment of the Guarantee Payments in full (without duplication of
amounts theretofore paid by the Trust).
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
The Preferred Guarantee Trustee, prior to the occurrence of a default with
respect to a Preferred Securities Guarantee, undertakes to perform only such
duties as are specifically set forth in such Preferred Securities Guarantee and,
after default, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provisions, the Preferred Guarantee Trustee is under no obligation to exercise
any of the powers vested in it by the Preferred Securities Guarantee at the
request of any holder of Preferred Securities, unless offered reasonable
indemnity against the costs, expenses and liabilities which might be incurred
thereby. The Preferred Guarantee Trustee also serves as the Property Trustee.
GOVERNING LAW
The Preferred Securities Guarantee will be governed by and construed in
accordance with the laws of the State of New York.
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DESCRIPTION OF THE CONVERTIBLE SUBORDINATED DEBENTURES
Set forth below is a description of the terms of the Convertible
Subordinated Debentures. The following summary description does not purport to
be complete and is subject in all respects to, and is qualified in its entirety
by reference to, the Indenture, the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The terms of the
Convertible Subordinated Debentures will include those stated in the Indenture
and those made a part of the Indenture by reference to the Trust Indenture Act.
Certain capitalized terms used herein are defined in the Indenture.
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Special Event, Convertible Subordinated Debentures
may be distributed to the holders of Trust Securities in liquidation of the
Trust. See "Description of the Preferred Securities -- Special Event Redemption
or Distribution."
If the Convertible Subordinated Debentures are distributed to the holders
of the Trust Securities, TXI will use its best efforts to have the Convertible
Subordinated Debentures listed on the NYSE or on such other exchange as the
Preferred Securities are then listed.
GENERAL
The Convertible Subordinated Debentures will be issued as unsecured junior
subordinated debt securities under the Indenture. The Convertible Subordinated
Debentures will be limited in aggregate principal amount to approximately
$ , such amount being the sum of the aggregate stated liquidation amount
of the Preferred Securities and the capital contributed by TXI in exchange for
the Common Securities (the "Payment").
The Convertible Subordinated Debentures are not subject to a sinking fund
provision. The Convertible Subordinated Debentures will mature on
, 2028 (such date, as it may be advanced as hereinafter
described, the "Stated Maturity"). If a Tax Event occurs, TXI will have the
right, prior to the termination of the Trust, to advance the Stated Maturity of
the Convertible Subordinated Debentures to the minimum extent required in order
to allow for the payments of interest in respect of the Convertible Subordinated
Debentures to continue to be tax deductible, but in no event shall the resulting
maturity of the Convertible Subordinated Debentures be less than 15 years from
the date of original issuance thereof. The Stated Maturity will be advanced only
if, in the opinion of counsel to TXI experienced in such matters, (i) after
advancing the Stated Maturity, interest paid on the Convertible Subordinated
Debentures will be deductible for United States federal income tax purposes and
(ii) advancing the Stated Maturity will not result in a taxable event to holders
of the Preferred Securities.
If TXI elects to advance the Stated Maturity of the Convertible
Subordinated Debentures, it will give notice to the Indenture Trustee, and the
Indenture Trustee will give notice of such change to the holders of the
Convertible Subordinated Debentures not less than 30 and not more than 60 days
prior to the effectiveness thereof.
If Convertible Subordinated Debentures are distributed to holders of the
Preferred Securities in liquidation of such holders' interests in the Trust,
such Convertible Subordinated Debentures will initially be issued as a Global
Security (as defined below). As described herein, under certain limited
circumstances, Convertible Subordinated Debentures may be issued in certificated
form in exchange for a Global Security. See "-- Book-Entry and Settlement." In
the event Convertible Subordinated Debentures are issued in certificated form,
the Convertible Subordinated Debentures will be in denominations of $50 and
integral multiples thereof and may be registered for transfer or exchanged at
the offices described below. Payments on Convertible Subordinated Debentures
issued as Global Securities will be made to the depositary for the Convertible
Subordinated Debentures. In the event Convertible Subordinated Debentures are
issued in certificated form, principal and interest will be payable, the
transfer of the Convertible Subordinated Debentures will be registrable and
Convertible Subordinated Debentures will be exchangeable for Convertible
Subordinated Debentures of other denominations of a like aggregate principal
amount at the corporate trust
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office of the Indenture Trustee in New York, New York; provided, that payment of
interest may be made at the option of TXI by check mailed to the address of the
persons entitled thereto.
The Indenture does not contain provisions that afford holders of
Convertible Subordinated Debentures protection in the event of a highly
leveraged transaction, reorganization, restructuring, merger or similar
transaction involving TXI.
SUBORDINATION
The Indenture provides that the Convertible Subordinated Dentures are
subordinated and junior in right of payment to all Senior Indebtedness of TXI.
No payment of the principal of, premium, if any, or interest on the Convertible
Subordinated Debentures may be made: (i) during the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to TXI unless the
holders of Senior Indebtedness shall have received payment in full of all
amounts due or to become due on such Senior Indebtedness, or provision shall
have been made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Indebtedness; (ii) if any
Convertible Subordinated Debentures are declared due and payable before their
Stated Maturity unless the holders of the Senior Indebtedness outstanding at the
time such Convertible Subordinated Debentures so become due and payable shall
have received payment in full of all amounts due on or in respect of such Senior
Indebtedness (including any amounts due upon acceleration), or provision shall
have been made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Indebtedness; or (iii) during the
continuation of any default in the payment of principal of, premium, if any, or
interest on any Senior Indebtedness, or if any event of default with respect to
any Senior Indebtedness shall have occurred and be continuing and shall have
resulted in such Senior Indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable,
unless and until such event of default shall have been cured or waived or shall
have ceased to exist and such acceleration shall have been rescinded or
annulled, or if any judicial proceeding shall be pending with respect to any
such default in payment or such event of default, unless all amounts due or to
become due on such Senior Indebtedness have been paid in full.
The term "Senior Indebtedness" means the principal of, premium, if any, and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to TXI whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt (as
defined in the Indenture) of TXI, whether incurred on or prior to the date of
this Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are not superior in right of payment to the Convertible
Subordinated Debentures or to other Debt which is pari passu with, or
subordinated to, the Convertible Subordinated Debentures; provided, however,
that Senior Indebtedness shall not be deemed to include (i) any Debt of TXI
which, when incurred and without respect to any election under Section 1111(b)
of the Bankruptcy Reform Act of 1978, was without recourse to TXI, (ii) any Debt
of TXI to any of its subsidiaries, (iii) Debt to any employee of TXI, (iv) Debt
which by its terms is subordinated to trade accounts payable or accrued
liabilities arising in the ordinary course of business to the extent that
payments made to the holders of such Debt by the holders of the Convertible
Subordinated Debentures as a result of the subordination provisions of the
Indenture would be greater than such payments otherwise would have been (absent
giving effect to clause (iv)) as a result of any obligation of such holders of
such Debt to pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject, and (v) the Convertible
Subordinated Debentures.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by TXI. As of February 28, 1998, Senior Indebtedness of TXI
aggregated approximately $382.8 million. In addition, because TXI is a holding
company, its obligations under the Convertible Subordinated Debentures will be
effectively subordinated to all existing and future liabilities of its
subsidiaries.
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CONVERSION RIGHTS
General
The Convertible Subordinated Debentures are convertible at any time, at the
option of the holder thereof and in the manner described below, into fully paid
and nonassessable shares of TXI Common Stock at an initial conversion rate of
shares of TXI Common Stock for each $50 in aggregate principal
amount of Convertible Subordinated Debentures (equal to a conversion price (the
"Conversion Price") of $ per share of TXI Common Stock, subject to
adjustment as described under "-- Conversion Price Adjustments.") A holder of
Convertible Subordinated Debentures may convert any portion of the principal
amount of the Convertible Subordinated Debentures into that number of fully paid
and nonassessable shares of TXI Common Stock (calculated as to each conversion
to the nearest 1/100th of a share) obtained by dividing the principal amount of
the Convertible Subordinated Debenture to be converted by the Conversion Price.
In case a Convertible Subordinated Debenture or portion thereof is called for
redemption, such conversion right in respect of the Convertible Subordinated
Debenture or portion so called shall expire at 5:00 p.m. (New York City time) on
the Business Day immediately preceding the corresponding redemption date, unless
TXI defaults in making the payment due upon redemption. TXI's delivery upon
conversion of the fixed number of shares of TXI Common Stock into which the
Convertible Subordinated Debentures are convertible (together with the cash
payment, if any, in lieu of any fractional share) shall be deemed to satisfy
TXI's obligation to pay the principal amount at maturity of the portion of the
Convertible Subordinated Debentures so converted and any unpaid interest accrued
on such Convertible Subordinated Debentures at the time of such conversion.
Accrued interest will not be paid on Convertible Subordinated Debentures
that are converted, nor will any payment, allowance or adjustment be made for
accumulated and unpaid interest, whether or not in arrears, on converted
Convertible Subordinated Debentures, except that if any Convertible Subordinated
Debenture is converted (i) on or after a record date for payment of interest
thereon, the amount of the Distributions payable on the related payment date
with respect to such Convertible Subordinated Debenture will be paid by the
converting holder to the Trust and the interest payable on the related payment
date with respect to such Convertible Subordinated Debenture will be distributed
to the holder on such payment date, despite such conversion, and (ii) during an
Extension Period and after the Property Trustee mails a notice of redemption
with respect to the Convertible Subordinated Debentures that are converted,
accrued and unpaid interest through the date of conversion on such Convertible
Subordinated Debentures called for redemption will be distributed to the holder
who converts such Convertible Subordinated Debentures, which payment shall be
made on the redemption date. Except as provided above, TXI will not be required
to make any payment, allowance or adjustment upon any conversion on account of
any accumulated and unpaid interest accrued on the Convertible Subordinated
Debentures surrendered for conversion, or on account of any accumulated and
unpaid dividends, if any, on the shares of TXI Common Stock issued upon such
conversion. Convertible Subordinated Debentures will be deemed to have been
converted immediately prior to 5:00 p.m. (New York City time) on the Conversion
Date.
Shares of TXI Common Stock issued upon conversion of Convertible
Subordinated Debentures will be validity issued, fully paid and nonassessable.
No fractional shares of TXI Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid in cash.
See "Certain Federal Income Tax Consequences -- Conversion of Preferred
Securities Into TXI Common Stock."
Conversion Price Adjustments
The Conversion Price shall be subject to adjustment (without duplication)
from time to time as follows:
Stock Dividends and Stock Splits. If TXI (i) pays a dividend or makes a
distribution with respect to the TXI Common Stock in shares of TXI Common Stock,
(ii) subdivides the outstanding shares of TXI Common Stock, (iii) combines the
outstanding shares of TXI Common Stock into a smaller number of shares or (iv)
issues by reclassification of the shares of TXI Common Stock any shares of
capital stock of TXI, then the Conversion Price in effect immediately prior to
such action will be adjusted so that the holder of any Convertible Subordinated
Debentures thereafter surrendered for conversion will be entitled to receive the
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number of shares of capital stock of TXI which such holder would have owned
immediately following such action had such Convertible Subordinated Debentures
been converted immediately prior thereto. Any such adjustment will become
effective immediately after the record date in the case of a dividend or other
distribution and immediately after the effective date in case of a subdivision,
combination or reclassification (or immediately after the record date if a
record date shall have been established for such event).
Rights or Warrants. If TXI issues rights or warrants to all holders of the
TXI Common Stock entitling them to subscribe for or purchase shares of TXI
Common Stock at a price per share less than the Current Market Price (as defined
herein) per share of TXI Common Stock, the Conversion Price shall be adjusted to
equal the price determined by multiplying the Conversion Price in affect
immediately prior to the date of issuance of such rights or warrants by a
fraction, the numerator of which will be the number of shares of TXI Common
Stock outstanding on the date of issuance of such rights or warrants plus the
number of shares which the aggregate offering price of the total number of
shares so offered for subscription or purchase would purchase at such Current
Market Price, and the denominator of which will be the number of shares of TXI
Common Stock outstanding on the date of issuance of such rights or warrants plus
the number of additional shares of TXI Common Stock offered for subscription or
purchase. If any such rights or warrants in respect of which an adjustment shall
have been, made shall expire unexercised, the Conversion Price will be
readjusted at the time of such expiration to the Conversion Price that would
have been in effect if no such adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
Other Distributions. If TXI, by dividend or otherwise, distributes to all
holders of the TXI Common Stock evidences of its indebtedness, shares of any
class or series of capital stock, cash or assets (including securities, but
excluding any rights or warrants referred to above, any dividend or distribution
paid exclusively in cash and any dividend or distribution referred to above),
the Conversion Price will be reduced to the price determined by multiplying the
Conversion Price in effect immediately prior to such distribution by a fraction,
the numerator of which will be the Current Market Price per share of the TXI
Common Stock on the date fixed for the payment of such distribution (the
"Reference Date") less the fair market value (as determined in good faith by the
Board of Directors) on the Reference Date of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of TXI Common Stock and the denominator of which will be the
Current Market Price per share of TXI Common Stock. In the event that such
distribution is not so paid or made, the Conversion Price will be adjusted to be
the Conversion Price that would then be in effect if such distribution had not
occurred,
Liquidating Dividends. If TXI pays or makes a dividend or other
distribution on the TXI Common Stock exclusively in cash (excluding all cash
dividends paid out of the retained earnings of the Company), the Conversion
Price shall be reduced to the price determined by multiplying the Conversion
Price in effect immediately prior to such dividend or distribution by a
fraction, the numerator of which will be the Current Market Price per share of
TXI Common Stock on the date fixed for the payment of such dividend or
distribution less the amount of cash so distributed (and not excluded as
provided in the above parenthetical phrase) applicable to one share of TXI
Common Stock and the denominator of which will be such Current Market Price per
share of the TXI Common Stock. Such reduction will become effective immediately
prior to the opening of business on the day following the date fixed for the
payment of such distribution; provided, however, that in the event the portion
of the cash so distributed applicable to one share of TXI Common Stock is equal
to or greater than the Current Market Price per share of the TXI Common Stock on
the record date for the distribution of the cash, in lieu of the foregoing
adjustment, adequate provision shall be made so that each holder of Convertible
Subordinated Debentures will have the right to receive upon conversion the
amount of cash such holder would have received had such holder converted each
Convertible Subordinated Debenture immediately prior to such record date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price will be adjusted to be the Conversion Price which would then be in effect
if such record date had not been fixed.
Tender or Exchange Offers. If TXI or any of its subsidiaries makes a tender
or exchange offer (other than an odd-lot offer) for all or any portion of the
TXI Common Stock and such tender or exchange offer involves the payment by TXI
or such subsidiary of consideration per share of TXI Common Stock having a fair
market value (as determined in good faith by the Board of Directors) at the last
time (the "Expiration
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Time") tenders or exchanges may be made pursuant to such tender or exchange
offer that exceeds 110% of the Current Market Price per share of TXI Common
Stock on the Trading Day next succeeding the Expiration Time, the Conversion
Price shall be reduced to the price determined by multiplying the Conversion
Price in effect immediately prior such Expiration Time by a fraction, the
numerator of which shall be the number of outstanding shares of TXI Common Stock
(including any tendered or exchanged shares) at the Expiration Time multiplied
by the Current Market Price per share of TXI Common Stock on the Trading Day
next succeeding the Expiration Time and the denominator of which will be the sum
of (x) the fair market value of the aggregate consideration payable to
stockholders based on the acceptance of all shares validly tendered or exchanged
and not withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of TXI Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the Current Market Price per share
of TXI Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time.
Definitions. The "Current Market Price" per share of TXI Common Stock on
any date in question will be the average of the daily Closing Prices (as defined
in the Indenture) for the five consecutive Trading Days (as defined in the
Indenture) selected by TXI commencing not more than 20 Trading Days before, and
ending not later than the earlier of the day in question or, if applicable, the
day before the "ex" date with respect to the issuance or distribution requiring
such computation. The term "ex" date, (i) when used with respect to any issuance
or distribution, means the first date on which the TXI Common Stock trades
regular way on the NYSE or on such successor securities exchange as the TXI
Common Stock may be listed or in the relevant market from which the Closing
Prices were obtained without the right to receive such issuance or distribution
and (ii) when used with respect to any tender or exchange offer, means the first
date on which the TXI Common Stock trades regular way on such securities
exchange or in such market after the Expiration Time of such offer.
No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which are not required
to be made shall be carried forward and taken into account in determining
whether any subsequent adjustment shall be required.
No adjustment of the Conversion Price will be made upon the issuance of any
shares of TXI Common Stock pursuant to any present or future plan providing for
the reinvestment of dividends or interest payable on securities of TXI and the
investment of additional optional amounts in shares of TXI Common Stock under
any such plan, or the issuance of any shares of TXI Common Stock or options or
rights to purchase such shares pursuant to any present or future employee
benefit plan or program of TXI or pursuant to any option, warrant, right, or
exercisable, exchangeable or convertible security which does not constitute an
issuance to all holders of TXI Common Stock of rights or warrants entitling
holders of such rights or warrants to subscribe for or purchase TXI Common Stock
at less than the Current Market Price. If any action would require adjustment of
the Conversion Price pursuant to more than one of the anti-dilution provisions,
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to holders of the Convertible
Subordinated Debentures.
CERTAIN COVENANTS
If (i) there shall have occurred any event that would constitute an Event
of Default under the Indenture, (ii) TXI shall be in default with respect to its
payment of any obligations under the Preferred Securities Guarantee or (iii) TXI
shall have given notice of its election of an Extension Period as provided in
the Indenture and such period, or any extension thereof, shall be continuing,
then TXI shall not and shall not permit any subsidiary to, (i) declare or pay
any dividends or distributions on or redeem, purchase, acquire or make a
liquidation payment with respect to, any of TXI's capital stock, (ii) make any
payment of principal of, premium, if any, or interest on or repay, repurchase or
redeem any debt security of TXI that ranks pari passu with or junior in interest
to the Convertible Subordinated Debentures or (iii) make any guarantee payments
with respect to any guarantee by TXI of the debt securities of any subsidiary if
such guarantee ranks
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pari passu with or junior in interest to the Convertible Subordinated Debentures
(other than (a) dividends or distributions in TXI's capital stock, (b) any
declaration of a dividend in connection with the implementation of a Rights Plan
or the redemption or repurchase of any rights distributed pursuant to a Rights
Plan, (c) payments under the Preferred Securities Guarantee and (d) purchases of
TXI Common Stock related to the issuance of TXI Common Stock or rights under any
of TXI's benefit plan for its directors, officers or employees, related to the
issuance of TXI Common Stock or rights under a dividend reinvestment and stock
purchase plan or related to the issuance of TXI Common Stock (or securities
convertible are exchangeable for TXI Common Stock) as consideration in an
acquisition transaction that was entered into prior to the commencement of such
Extension Period).
For so long as the Preferred Securities remain outstanding, TXI will (i)
directly or indirectly maintain 100% ownership of the Common Securities of the
Trust; provided, however, that any permitted successor of TXI under the
Indenture may succeed to TXI's ownership of such Common Securities and (ii) use
its reasonable efforts to cause the Trust (a) to remain a statutory business
trust, except in connection with the distribution of Convertible Subordinated
Debentures to the holders of Preferred Securities in liquidation of the Trust,
the redemption of all of the Preferred Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Trust
Agreement, and (b) otherwise to continue to be classified as a grantor trust for
United States federal income tax purposes.
OPTIONAL REDEMPTION
TXI shall have the right to redeem the Convertible Subordinated Debentures,
in whole or in part, from time to time, on or after , 2001, or at any
time in certain circumstances upon the occurrence of a Tax Event as described
under "Description of the Preferred Securities -- Special Event Redemption or
Distribution," 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, including Additional Interest (as defined herein),
if any, to the redemption date. If a partial redemption of the Preferred
Securities resulting from a partial redemption of the Convertible Subordinated
Debentures would result in the delisting of the Preferred Securities, TXI may
redeem the Convertible Subordinated Debentures only in whole.
MANDATORY REDEMPTION
The Convertible Subordinated Debentures will mature on ,
2028, and may be redeemed, in whole or in part, at any time on or after
, 2001, or at any time, in whole or in part, in certain
circumstances upon the occurrence of a Tax Event.
POSSIBLE TAX LEGISLATION OR ADVERSE TAX DECISIONS
Certain legislative proposals made in 1996 and 1997, if they had been
enacted, would have adversely affected the ability of the Company to deduct
interest paid on the Convertible Subordinated Debentures. Although these
proposals were not enacted, there is no assurance that after the date hereof
legislation adversely affecting the ability of the Company to deduct the
interest payable on the Convertible Subordinated Debentures will not be enacted.
If adverse legislation is enacted in the future and applied to the Convertible
Subordinated Debentures, such legislation could give rise to a Tax Event which
could, in certain circumstances, require the dissolution of the Trust or permit
TXI to redeem the Convertible Subordinated Debentures or advance the Stated
Maturity of the Convertible Subordinated Debentures.
In addition, the Service recently asserted that interest payable on a
security with characteristics and issued in circumstances similar to the
characteristics and issuance of the Convertible Subordinated Debentures was not
deductible for United States federal income tax purposes. The taxpayer in that
case has filed a petition in the United States Tax Court challenging the IRS's
position on this matter. If this matter is litigated and the Tax Court sustains
the Service's position, such judicial decision could give rise to a Tax Event
which could, in certain circumstances, require the dissolution of the Trust or
permit TXI to redeem the Convertible Subordinated Debentures.
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Because of the possibility of adverse future legislation, case law, and/or
IRS positions, there is no assurance that a Tax Event will not occur.
INTEREST
Each Convertible Subordinated Debenture will bear interest at the annual
rate of % from the original date of issuance, payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each year (each, an
"Interest Payment Date"), commencing , 1998, to the person in whose
name such Convertible Subordinated Debenture is registered, subject to certain
exceptions, at the close of business on the Business Day next preceding such
Interest Payment Date. In the event the Convertible Subordinated Debentures do
not continue to remain in book-entry only form, TXI will select a record date
which shall be 15 days prior to each Interest Payment Date.
Interest on the Convertible Subordinated Debentures payable for any full
quarterly period shall be computed on the basis of a 360-day year of twelve
30-day months and interest on the Convertible Subordinated Debentures for any
partial period shall be computed on the basis of the number of days elapsed in a
360-day year of twelve 30-day months. In the event that any date on which
interest is payable on the Convertible Subordinated Debentures is not a Business
Day, then payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), 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.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
TXI will have the right at any time, and from time to time, during the term
of the Convertible Subordinated Debentures to defer payments of interest by
extending the interest payment period for a period not exceeding 20 consecutive
quarters, provided that no Extension Period may extend beyond the maturity of
the Convertible Subordinated Debentures. At the end of an Extension Period, TXI
will pay all interest then accrued and unpaid (including any Additional
Interest) (together with interest thereon at the rate specified for the
Convertible Subordinated Debentures to the extent permitted by applicable law).
During any such Extension Period, TXI will not and shall not permit any
subsidiary to, (i) declare or pay any dividends or distributions on or redeem,
purchase, acquire or make a liquidation payment with respect to, any of TXI's
capital stock, (ii) make any payment of principal of, premium, if any, or
interest on or repay, repurchase or redeem any debt security of TXI that ranks
pari passu with or junior in interest to the Convertible Subordinated Debentures
or (iii) make any guarantee payments with respect to any guarantee by TXI of the
debt securities of any subsidiary if such guarantee ranks pari passu with or
junior in interest to the Convertible Subordinated Debentures (other than (a)
dividends or distributions in TXI's capital stock, (b) any declaration of a
dividend in connection with the implementation of a Rights Plan or the
redemption or repurchase of any rights distributed pursuant to a Rights Plan,
(c) payments under the Preferred Securities Guarantee and (d) purchases of TXI
Common Stock related to the issuance of TXI Common Stock or rights under any of
TXI's benefit plans for its directors, officers or employees, related to the
issuance of TXI Common Stock or rights under a dividend reinvestment and stock
purchase plan or related to the issuance of TXI Common Stock (or securities
convertible or exchangeable for TXI Common Stock) as consideration in an
acquisition transaction that was entered into prior to the commencement of such
Extension Period). Prior to the termination of any such Extension Period, TXI
may further defer payments of interest by extending the interest payment period,
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters and no Extension
Period may extend beyond the maturity of the Convertible Subordinated
Debentures. Upon the termination of Extension Period and the payment of all
amounts then due, TXI may elect a new Extension Period, as if no Extension
Period had previously been declared, subject to the above requirements. No
interest during an Extension Period, except at the end thereof, shall be due and
payable. TXI has no current intention of exercising its rights to defer payments
of interest by extending the interest payment period on the Convertible
Subordinated Debentures. If the Property Trustee shall be the sole holder of the
Convertible Subordinated Debentures, TXI
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shall give the Administrative Trustees and the Property Trustee notice of its
selection of such Extension Period one Business Day prior to the earlier of (i)
the date distributions on the Preferred Securities are payable or (ii) the date
the Administrative Trustees are required to give notice to the NYSE or other
applicable self-regulatory organization or to holders of the Preferred
Securities of the record date or the date such distribution is payable, but in
any event not less than one Business Day prior to such record date. The
Administrative Trustees will give notice of TXI's election of such Extension
Period to the holders of the Preferred Securities. If the Property Trustee shall
not be the sole holder of the Convertible Subordinated Debentures, TXI will give
the holders of the Convertible Subordinated Debentures notice of its selection
of such Extension Period ten Business Days prior to the earlier of (i) the next
Interest Payment Date or (ii) the date TXI is required to give notice to the
NYSE or other applicable self-regulatory organization or to holders of the
Convertible Subordinated Debentures of the record or payment date of such
related interest payment.
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, TXI will pay as additional interest ("Additional Interest") 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 not less than the amounts the Trust would have
received had no such taxes, duties, assessments or other governmental changes
been imposed.
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default shall occur and be continuing, the
Property Trustee, as the holder of the Convertible Subordinated Debentures, will
have the right to declare the principal of and the interest on the Convertible
Subordinated Debentures (including Additional Interest, if any) and any other
amounts payable under the Indenture to be forthwith due and payable and to
enforce its other rights as a creditor with respect to the Convertible
Subordinated Debentures.
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Convertible Subordinated Debentures:
(a) failure for 30 days to pay interest on the Convertible
Subordinated Debentures, including any Additional Interest in respect
thereof, when due; provided, however, that a valid extension of the
interest payment period by TXI shall not constitute a default in the
payment of interest for this purpose;
(b) failure to pay principal or premium, if any, on the Convertible
Subordinated Debentures when due whether at maturity or upon earlier
redemption;
(c) failure to observe or perform any other covenant contained in the
Indenture for 90 days after written notice to TXI from the Indenture
Trustee or the holders of at least 25% in principal amount of the
outstanding Convertible Subordinated Debentures;
(d) certain events of bankruptcy, insolvency, or reorganization of
TXI; or
(e) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of
Convertible Subordinated Debentures to the holders of Preferred Securities
in liquidation of the Trust and in connection with certain mergers,
consolidations or amalgamation permitted by the Trust Agreement.
The holders of a majority in aggregate outstanding principal amount of the
Convertible Subordinated Debentures have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Indenture
Trustee. The Indenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Convertible Subordinated Debentures may
declare the principal due and payable immediately on default, but the holders of
a majority in aggregate outstanding principal amount may annul such declaration
and waive the default if the default has been cured and a sum sufficient to pay
all
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matured installments of interest and principal due otherwise than by
acceleration and any applicable premium has been deposited with the Indenture
Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Convertible Subordinated Debentures affected thereby, on behalf of the holders
of all the Convertible Subordinated Debentures, may waive any past default,
except (i) a default in the payment of principal, premium, if any, or interest
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration and
any applicable premium has been deposited with the Indenture Trustee) or (ii) a
default in the covenant of TXI not to declare or pay dividends on, or redeem,
purchase or acquire any of its capital stock during an Extension Period. An
Indenture Event of Default also constitutes a Trust Agreement Event of Default.
The holders of Preferred Securities in certain circumstances have the right to
direct the Property Trustee to exercise its rights as the holder of the
Convertible Subordinated Debentures. See "Description of the Preferred
Securities -- Trust Agreement Events of Default" and "Description of the
Preferred Securities -- Voting Rights."
Notwithstanding the foregoing, if a Trust Agreement Event of Default has
occurred and is continuing and such event is attributable to the failure of TXI
to pay interest or principal on the Convertible Subordinated Debentures on the
date such interest or principal is otherwise payable, a holder of Preferred
Securities may institute a direct action for payment on or after the respective
due date specified in the Convertible Subordinated Debentures. TXI may not amend
the Indenture to remove the foregoing right to bring a direct action without the
prior written consent of the holders of all of the Preferred Securities.
Notwithstanding any payment made to such holder of Preferred Securities by TXI
in connection with such a direct action, TXI will remain obligated to pay the
principal of or interest on the Convertible Subordinated Debentures held by the
Trust or Property Trustee, and TXI shall be subrogated to the rights of the
holder of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any payments made by TXI to such holder in any such
direct action. The holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Convertible
Subordinated Debentures.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
voluntary or involuntary dissolution, winding-up or liquidation of the Trust as
a result of the occurrence of a Special Event, the Convertible Subordinated
Debentures will 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, Convertible Subordinated
Debentures represented by the Global Security will not be exchangeable for, and
will not otherwise be issuable as, Convertible Subordinated Debentures 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 such a Global
Security will not be entitled to receive physical delivery of Convertible
Subordinated Debentures 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 Convertible Subordinated
Debentures 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 depositary or its nominee. Accordingly, each
beneficial owner must rely on the procedures of the depositary and, if such
person is not a Participant, on the procedures of the Participant through which
such person owns its interest, to exercise any rights of a Holder under the
Indenture.
If Convertible Subordinated Debentures are distributed to holders of
Preferred Securities in liquidation of such holders' interests in the Trust, DTC
will act as securities depositary for the Convertible Subordinated Debentures.
For a description of DTC and the specific terms of the depository arrangements,
see "Description
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of the Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company." The description therein of DTC's book-entry system and DTC's practices
as they relate to purchases, transfers, notices and payments with respect to the
Preferred Securities apply in all material respects to any debt obligations
represented by one or more Global Securities held by DTC. TXI 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 depositary.
None of TXI, the Trust, the Indenture Trustee, any Paying Agent and any
other agent of TXI or the Indenture 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 such Convertible
Subordinated Debentures or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
A Global Security will be exchangeable for Convertible Subordinated
Debentures registered in the names of persons other than the depositary or its
nominee only if (i) the depositary notifies TXI that it is unwilling or unable
to continue as a depositary for such Global Security and no successor depositary
shall have been appointed, or if at any time the depositary ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), at a time when the depositary is required to be so
registered to act as such depositary and no successor depositary shall have been
appointed, (ii) TXI in its sole discretion determines that such Global Security
shall be so exchangeable or (iii) there shall have occurred an Event of Default
with respect to the Convertible Subordinated Debentures. Any Global Security
that is exchangeable pursuant to the preceding sentence will be exchangeable for
Convertible Subordinated Debentures 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.
In the event the Convertible Subordinated Debentures are not represented by
one or more Global Securities, certificates evidencing Convertible Subordinated
Debentures may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed) or exchange, at the office of the
Securities Registrar or at the office of any transfer agent designated by TXI
for such purpose with respect to the Convertible Subordinated Debentures,
without service charge and upon payment of any taxes and other governmental
charges as described in the Indenture. Such registration of transfer or exchange
will be effected upon the Securities Registrar or such transfer agent, as the
case may be, being satisfied with the documents of title and identity of the
person making the request. TXI has appointed the Indenture Trustee as Securities
Registrar with respect to the Convertible Subordinated Debentures. TXI may at
any time rescind the designation of any such transfer agent or approve a change
in the location through which any such transfer agent acts, except that TXI will
be required to maintain a transfer agent at the place of payment. TXI may at any
time designate additional transfer agents with respect to the Convertible
Subordinated Debentures.
In the event of any redemption in part, TXI will not be required to (i)
issue, register the transfer of or exchange Convertible Subordinated Debentures
during a period beginning at the opening of business 15 days before any
selection for redemption of Convertible Subordinated Debentures 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 the Convertible
Subordinated Debentures and (ii) register the transfer of or exchange any
Convertible Subordinated Debentures so selected for redemption, in whole or in
part, except the unredeemed portion of any Convertible Subordinated Debentures
being redeemed in part.
PAYMENT AND PAYING AGENTS
Payment of principal of and premium (if any) on the Convertible
Subordinated Debentures will be made only against surrender to the Paying Agent
of the Convertible Subordinated Debentures. Principal of and any premium and
interest, if any, on Convertible Subordinated Debentures will be payable,
subject to any applicable laws and regulations, at the office of such Paying
Agent or Paying Agents as TXI may designate from time to time, except that at
the option of TXI payment of any interest may be made by check mailed to the
address of the person entitled thereto as such address shall appear in the
Securities Register with respect to
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the Convertible Subordinated Debentures. Payment of interest on Convertible
Subordinated Debentures on any Interest Payment Date will be made to the person
in whose name the Convertible Subordinated Debentures (or predecessor security)
is registered at the close of business on the Regular Record Date for such
interest payment.
The Indenture Trustee will act as Paying Agent with respect to the
Convertible Subordinated Debentures. TXI may at any time designate additional
Paying Agents or rescind the designation of any Paying Agents or approve a
change in the office through which any Paying Agent acts, except that TXI will
be required to maintain a Paying Agent at the place of payment.
All amounts paid by TXI to a Paying Agent for the payment of the principal
of or premium or interest, if any, on the Convertible Subordinated Debentures
which remain unclaimed at the end of two years after such principal, premium, if
any, or interest shall have become due and payable will be repaid to TXI and the
holder of such Convertible Subordinated Debentures will thereafter look only to
TXI for payment thereof.
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting TXI and the Indenture Trustee,
with the consent of the holders of not less than a majority in principal amount
of the Convertible Subordinated Debentures, to modify the Indenture or any
supplemental indenture affecting that series or the rights of the Holders of the
Convertible Subordinated Debentures; provided, that no such modification may,
without the consent of the Holder of each outstanding Convertible Subordinated
Debenture affected thereby, (i) extend the fixed maturity of the Convertible
Subordinated Debentures, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of the Holder of
Convertible Subordinated Debentures so affected or (ii) reduce the percentage of
Convertible Subordinated Debentures, the Holders of which are required to
consent to any such supplemental indenture.
In addition, TXI and the Indenture Trustee may execute, without the consent
of Holders of the Convertible Subordinated Debentures, any supplemental
indenture for certain other usual purposes including the creation of any new
series of convertible subordinated debentures.
CONSOLIDATION, MERGER AND SALE
The Indenture provides that TXI will not consolidate with or merge into any
other corporation or convey, transfer or lease its assets substantially as an
entirety unless (i) the successor is a corporation organized in the United
States and expressly assumes the due and punctual payment of the principal of,
premium, if any, and interest on all Convertible Subordinated Debentures issued
thereunder and the performance of every other covenant of the Indenture on the
part of TXI and (ii) immediately thereafter no Event of Default and no event
that, after notice or lapse of time, or both, would become an Event of Default,
shall have happened and be continuing. Upon any such consolidation, merger,
conveyance or transfer, the successor corporation shall succeed to and be
substituted for TXI under the Indenture and thereafter the predecessor
corporation shall be relieved of all obligations and covenants under the
Indenture and the Convertible Subordinated Debentures.
DEFEASANCE AND DISCHARGE
Under the terms of the Indenture, TXI will be discharged from any and all
obligations in respect of the Convertible Subordinated Debentures (except in
each case for certain obligations to register the transfer of or exchange
Convertible Subordinated Debentures, replace stolen, lost or mutilated
Convertible Subordinated Debentures, maintain paying agencies and hold funds for
payment in trust) if TXI deposits with the Indenture Trustee, in trust, cash or
government obligations, in an amount sufficient to pay all the principal of, and
interest on, the Convertible Subordinated Debentures on the dates such payments
are due in accordance with the terms of the Convertible Subordinated Debentures.
For federal income tax purposes, any such defeasance of the Convertible
Subordinated Debentures will be treated as a taxable exchange of the Convertible
Subordinated Debentures for an issue of obligations of the
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trust or a direct interest in the cash or government securities held in the
Trust. In that case, holders of the Preferred Securities would recognize gain or
loss as if the trust obligations or the cash or government obligations
deposited, as the case may be, had actually been received by them in exchange
for their Preferred Securities. Such holders thereafter would be required to
include in income a share of the income, gain or loss of the Trust. The amount
so required to be included in income could be a different amount than would be
includable in the absence of defeasance. Holders of the Preferred Securities
should consult their own tax advisors as to the specific consequences of
defeasance.
GOVERNING LAW
The Indenture and the Convertible Subordinated Debentures will be governed
by, and construed in accordance with, the internal laws of the State of New
York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture Trustee, prior to default, undertakes to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Indenture
Trustee is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Convertible Subordinated Debentures,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The Indenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Indenture Trustee reasonable
believes that repayment or adequate indemnity is not reasonably assured to it.
MISCELLANEOUS
TXI will have the right at all times to assign any of its rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of TXI; provided, that in the event of any such assignment, TXI will remain
liable for all the their respective obligations. Subject to the foregoing, the
Indenture will be binding upon an inure to the benefit of the parties thereto
and their respective successors and assigns. The Indenture provides that it may
not otherwise be assigned by the parties thereto.
The Indenture will also provide that TXI will pay all fees and expenses
related to (i) the offering of the Trust Securities and the Convertible
Subordinated Debentures, (ii) the organization, maintenance and dissolution of
the Trust, (iii) the retention of the Administrative Trustees and (iv) the
enforcement by the Property Trustee of the rights of holders of Preferred
Securities.
EFFECT OF OBLIGATIONS UNDER THE CONVERTIBLE SUBORDINATED DEBENTURES
AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Trust Agreement, the sole purpose of the Trust is to
issue Trust Securities and invest the proceeds thereof in the Convertible
Subordinated Debentures.
As long as payments of interest and other payments are made when due on the
Convertible Subordinated Debentures, such payments will be sufficient to cover
Distributions and payments due on the Preferred Securities primarily because (i)
the aggregate principal amount of Convertible Subordinated Debentures will be
equal to the sum of the aggregate stated liquidation amount of the Preferred
Securities; (ii) the interest rate and interest and other payment dates on the
Convertible Subordinated Debentures will match the distribution rate and
distribution and other payment dates for the Preferred Securities; (iii) TXI
will pay all costs and expenses of the Trust; and (iv) the Trust Agreement
provides that the Trustees will not 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) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by TXI as and to the extent set forth under
"Description of the Preferred Securities Guarantee." If TXI does not make
interest payments on
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the Convertible Subordinated Debentures purchased by the Trust, it is expected
that the Trust will not have sufficient funds to pay Distributions on the
Preferred Securities. The Preferred Securities Guarantee is a guarantee on a
subordinated basis from the time of its issuance, but does not apply to any
payment of Distributions unless and until the Trust has sufficient funds for the
payment of such distributions.
If TXI fails to make interest or other payments on the Convertible
Subordinated Debentures when due (taking into account any Extension Period), the
Trust Agreement provides a mechanism whereby the holders of the Preferred
Securities, using the procedures described in "Description of the Preferred
Securities -- Voting Rights," may (i) appoint a Special Administrative Trustee
and (ii) direct the Property Trustee to enforce its rights under the Convertible
Subordinated Debentures, including proceeding directly against TXI to enforce
the Convertible Subordinated Debentures. If the Property Trustee fails to
enforce its rights under the Convertible Subordinated Debentures, a holder of
Preferred Securities may institute a legal proceeding directly against TXI to
enforce the Property Trustee's rights under the Convertible Subordinated
Debentures without first instituting any legal proceeding against the Property
Trustee or any other person or entity. Notwithstanding the foregoing, if a Trust
Agreement Event of Default has occurred and is continuing and such event is
attributable to the failure of TXI to pay interest or principal on the
Convertible Subordinated Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then a
holder of Preferred Securities may institute an action for payment on or after
the respective due date specified in the Convertible Subordinated Debentures, in
connection with such action. TXI will be subrogated to the rights of such holder
of Preferred Securities under the Trust Agreement to the extent of any payment
made by TXI to such holder of Preferred Securities in such action. TXI, under
the Preferred Securities Guarantee, acknowledges that the Preferred Guarantee
Trustee will enforce the Preferred Securities Guarantee on behalf of the holders
of the Preferred Securities.
If TXI fails to make payments under the Preferred Securities Guarantee, the
Preferred Securities Guarantee provides a mechanism whereby the holders of the
Preferred Securities may direct the Preferred Guarantee Trustee to enforce its
rights thereunder. If the Preferred Guarantee Trustee fails to enforce the
Preferred Securities Guarantee, any holder of Preferred Securities may institute
a legal proceeding directly against TXI to enforce the Preferred Guarantee
Trustee's rights under the Preferred Securities Guarantee, without first
instituting a legal proceeding against the Trust, the Preferred Guarantee
Trustee or any other person or entity.
The Preferred Securities Guarantee, when taken together with TXI's
obligations under the Convertible Subordinated Debentures, the Indenture and the
Trust Agreement, including its obligations under the Indenture to pay costs,
expenses, debts and liabilities of the Trust (other than with respect to the
Trust Securities), will provide a full and unconditional guarantee of amounts
due on the Preferred Securities. See "Description of the Preferred Securities
Guarantee -- General."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain of the principal United States
federal income tax consequences of the purchase, ownership and disposition of
the Preferred Securities to a holder that is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized under
the laws of the United States or any state thereof or the District of Columbia
or an estate or trust described in Section 7701(a)(30) of the Code (a "Holder").
Except as set forth below, this summary does not address the United States
federal income tax consequences to persons other than Holders.
This summary is based on the United States federal income tax laws,
regulations and rulings and decisions now in effect, all of which are subject to
change, possibly on a retroactive basis. This summary does not address the tax
consequences applicable to investors that may be subject to special tax rules
such as banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-exempt
investors or persons that will hold the Preferred Securities as a position in a
"straddle," as part of a "synthetic security" or "hedge," as part of a
"conversion transaction" or other integrated investment or as other than a
capital asset. This summary also does not address the tax consequences to
persons that have a functional currency other than the U.S. dollar or the tax
consequences to
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shareholders, partners or beneficiaries of a Holder. Further, it does not
include any description of any alternative minimum tax consequences or the tax
laws of any state or local government or of any foreign government that may be
applicable to a Holder.
CLASSIFICATION OF TXI CAPITAL TRUST I
Locke Purnell Rain Harrell (A Professional Corporation), counsel to TXI, is
of the opinion that, under current law and assuming full compliance with the
terms of the Indenture and the Trust Agreement (and certain other documents),
TXI Capital Trust I will be classified as a "grantor trust" for federal income
tax purposes and will not be classified as an association taxable as a
corporation or a partnership. Each Holder will be treated as owning an undivided
beneficial interest in the Convertible Subordinated Debentures. Accordingly,
each Holder will be required to include in its gross income any interest or
accrued original issue discount ("OID") with respect to its allocable share of
Convertible Subordinated Debentures. Investors should be aware that any opinion
of Locke Purnell Rain Harrell does not address any other issue and is not
binding on the Internal Revenue Service (the "Service") or the courts.
CLASSIFICATION OF CONVERTIBLE SUBORDINATED DEBENTURES
TXI, the Trust and the holders of the Preferred Securities (by acceptance
of a beneficial interest in the Convertible Subordinated Debentures) will agree
to treat the Convertible Subordinated Debentures as indebtedness for all United
States federal income tax purposes. In connection with the issuance of the
Convertible Subordinated Debentures, Locke Purnell Rain Harrell will deliver its
opinion that, under current law and based on certain representations, facts and
assumptions set forth in such opinion, the Convertible Subordinated Debentures
should be classified as indebtedness for United States federal income tax
purposes.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Unless the Convertible Subordinated Debentures are issued with OID, stated
interest on the Convertible Subordinated Debentures will be taxable to a Holder
as ordinary income at the time such interest is paid (if the Holder uses the
cash method of accounting for tax purposes) or accrued (if the Holder uses the
accrual method of accounting for tax purposes). Under regulations of the United
States Treasury Department, the Convertible Subordinated Debentures will not be
considered issued with OID if the likelihood of TXI exercising its right to
defer interest is considered a "remote" contingency at the time the Convertible
Subordinated Debentures are issued. TXI believes that such likelihood is remote,
because exercise of its right to defer interest would prevent TXI from declaring
dividends on its capital stock. Accordingly, TXI intends to take the position
that the Convertible Subordinated Debentures will not be issued with OID.
However, the definition of the term "remote" in the regulations has not yet been
addressed in any rulings or other interpretations by the Service, and it is
possible that the Service would assert that the Convertible Subordinated
Debentures were issued with OID. A determination that the Convertible
Subordinated Debentures were issued with OID would not result in substantially
different United States federal income tax consequences to accrual method
taxpayers or to cash-method taxpayers whose taxable year is the calendar year.
Holders not described in the preceding sentence, if any, would recognize
acceleration of up to three months' accrued interest.
If, notwithstanding TXI's current belief, it does exercise its right to
defer interest payments, the Convertible Subordinated Debentures would be
treated as if they were retired and then reissued with OID at such time. In such
case, the amount of OID would generally be equal to the interest payable
thereafter.
If the Convertible Subordinated Debentures are treated as having been
issued or reissued with OID (either because TXI exercises its right to defer
interest payments or because the likelihood of exercise of such right is not
considered a remote contingency at the time of issuance), Holders would include
that interest in income on an accrual basis, regardless of their method of tax
accounting. The amount of OID that accrued in any quarter would approximately
equal the amount of interest that accrued on the Convertible Subordinated
Debentures in that quarter at the stated interest rate. If interest payments
were received later than the taxable
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year in which the interest accrued, OID treatment would have the effect of
accelerating the reporting of income for Holders who otherwise use a cash method
of tax reporting.
Corporate Holders of Preferred Securities will not be entitled to a
dividends-received deduction with respect to any interest earned with respect to
the Preferred Securities.
PREMIUM AND MARKET DISCOUNT
To the extent a Holder acquires its Preferred Securities at a price that is
greater or less than the principal payable at maturity (or, if the Convertible
Subordinated Debentures are treated as having been issued or reissued with OID,
the adjusted issue price) of such Holder's share of Convertible Subordinated
Debentures (which generally should approximate par plus any OID accrued with
respect to unpaid interest), the Holder will be deemed to have acquired its
interest in the Preferred Securities with premium or with market discount, as
the case may be. A Holder acquiring Preferred Securities at a premium may elect
to reduce the amount of interest payments (and will reduce the amount of OID, if
any) required to be included in income to reflect amortization of the premium
over the remaining term. A Holder acquiring Preferred Securities at a market
discount will also include the amount of such discount in income in accordance
with the market discount rules described below.
A Holder acquiring Preferred Securities at a market discount generally will
be required to recognize ordinary income to the extent of accrued market
discount upon the retirement of the underlying Convertible Subordinated
Debentures or, to the extent of any gain, upon the disposition of the Preferred
Securities. Such market discount would accrue ratably, or, at the election of
the Holder, under a constant yield method over the remaining term of the
Convertible Subordinated Debentures. A Holder will also be required to defer the
deduction of a portion of the interest paid or accrued on indebtedness incurred
to purchase or carry Preferred Securities acquired with market discount. In lieu
of the foregoing, a Holder may elect to include market discount in income
currently as it accrues on all market discount instruments acquired by such
Holder in the taxable year of the election or thereafter, in which case the
interest deferral rule will not apply.
RECEIPT OF CONVERTIBLE SUBORDINATED DEBENTURES UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the caption "Description of
the Preferred Securities -- Special Event Redemption or Distribution,"
Convertible Subordinated Debentures may be distributed to Holders in exchange
for the Preferred Securities and in liquidation of the Trust. Under current law,
such a distribution would be treated as a non-taxable event to each Holder, and
each Holder would receive an aggregate tax basis in the Convertible Subordinated
Debentures equal to such Holder's aggregate tax basis in its Preferred
Securities. A Holder's holding period in the Convertible Subordinated Debentures
so received in liquidation of the Trust would include the period for which the
Preferred Securities were held by such Holder.
SALE OF PREFERRED SECURITIES AND REDEMPTION OF CONVERTIBLE SUBORDINATED
DEBENTURES
A Holder that sells Preferred Securities, or whose Preferred Securities or
Convertible Subordinated Debentures (which shall have been distributed to
Holders upon liquidation of the Trust) are redeemed whether pursuant to a Tax
Event or otherwise, will recognize gain or loss equal to the difference between
its adjusted tax basis in the Preferred Securities or Convertible Subordinated
Debentures and the amount realized on the sale or redemption. A Holder's
adjusted tax basis in the Preferred Securities or Convertible Subordinated
Debentures generally will be its initial purchase price increased by OID, if
any, previously includible in such Holder's gross income to the date of
disposition (and the accrual of market discount, if any) and decreased by
payments (other than payments of interest not reflected in OID) received on the
Preferred Securities and/or Convertible Subordinated Debentures and by any
premium that the Holder has taken into account. Subject to the market discount
rules described above, any such gain or loss generally will be capital gain or
loss.
The Preferred Securities may trade at prices that do not accurately reflect
the value of accrued but unpaid interest with respect to the underlying
Convertible Subordinated Debentures. A Holder that uses the accrual method of
accounting for tax purposes (and a cash method Holder if the Convertible
Subordinated
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Debentures are deemed to have been issued with OID) and that disposes of
Preferred Securities between record dates for payments of Distributions thereon
will be required to include accrued but unpaid interest on the Convertible
Subordinated Debentures through the date of disposition in income as ordinary
income, and to add such amount to such Holder's adjusted tax basis in the pro
rata share of the underlying Convertible Subordinated Debentures deemed disposed
of. To the extent that the selling price is less than the Holder's adjusted tax
basis (so determined) a Holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
CONVERSION OF PREFERRED SECURITIES INTO TXI COMMON STOCK
A Holder of Preferred Securities generally will not recognize income, gain
or loss upon the conversion through the Conversion Agent, of its Preferred
Securities into shares of TXI Common Stock. A Holder will, however, recognize
gain upon the receipt of cash in lieu of a fractional share of TXI Common Stock
equal to the amount of cash received less the Holder's tax basis in the
fractional share, and to the extent that the TXI Common Shares issued upon
conversion are treated as attributable to accrued interest on the Preferred
Securities. A Holder's obligation to include in income OID, if any, with respect
to the Preferred Securities would cease upon the date of conversion. To the
extent that the Preferred Securities converted are subject to accrued market
discount, as discussed above, the amount of the accrued market discount will
carry over to the TXI Common Stock on conversion, and gain on the disposition of
the TXI Common Stock will be treated as ordinary income on such disposition to
the extent of the accrued market discount. A Holder's tax basis in the TXI
Common Stock received upon exchange and conversion should generally be equal to
the Holder's tax basis in the Preferred Securities delivered to the Conversion
Agent for exchange less the basis allocated to any fractional share for which
cash is received and a Holder's holding period in the TXI Common Stock received
upon exchange and conversion will generally begin on the date that the Holder
acquired the Preferred Securities delivered to the Conversion Agent for
exchange.
ADJUSTMENT OF CONVERSION RATIO
Adjustments in the conversion price of the Preferred Securities made
pursuant to the anti-dilution provisions thereof to reflect distributions to
holders of TXI Common Stock that are taxable as dividends to such holders may
result in constructive distributions to Holders of Preferred Securities that
could be taxable to them as dividends pursuant to Section 305 of the Code.
Therefore, Holders of Preferred Securities could have an amount included in
gross income as a result of an event pursuant to which they received no cash or
property that could be used to pay any related tax.
POSSIBLE TAX LEGISLATION OR ADVERSE TAX DECISIONS
Certain legislative proposals made in 1996 and 1997, if they had been
enacted, would have adversely affected the ability of the Company to deduct
interest paid on the Convertible Subordinated Debentures. Although these
proposals were not enacted, there is no assurance that after the date hereof
legislation adversely affecting the ability of the Company to deduct the
interest payable on the Convertible Subordinated Debentures will not be enacted.
If adverse legislation is enacted in the future and applied to the Convertible
Subordinated Debentures, such legislation could give rise to a Tax Event which
could, in certain circumstances, require the dissolution of the Trust or permit
TXI to redeem the Convertible Subordinated Debentures or advance the Stated
Maturity of the Convertible Subordinated Debentures.
In addition, the Service recently asserted that interest payable on a
security with characteristics and issued in circumstances similar to the
characteristics and issuance of the Convertible Subordinated Debentures was not
deductible for United States federal income tax purposes. The taxpayer in that
case has filed a petition in the United States Tax Court challenging the IRS's
position on this matter. If this matter is litigated and the Tax Court sustains
the Service's position, such judicial decision could give rise to a Tax Event
which could, in certain circumstances, require the dissolution of the Trust or
permit TXI to redeem the Convertible Subordinated Debentures.
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Because of the possibility of adverse future legislation, case law, and/or
IRS positions, there is no assurance that a Tax Event will not occur.
FOREIGN INVESTORS
Subject to the discussion of backup withholding below, interest (including
OID) with respect to the Preferred Securities paid to a nonresident alien
individual, foreign corporation, foreign partnership or foreign estate or trust
(collectively, "United States Alien Holder") will be exempt from U.S.
withholding tax, provided that the United States Alien Holder complies with
applicable certification requirements (and does not actually or constructively
own 10% or more of the total combined voting owner of all classes of stock of
TXI and is not a controlled foreign corporation related to TXI or its
affiliates).
On October 14, 1997, the Service published in the Federal Register final
regulations (the "1997 Final Regulations") which affect the United States
taxation of United States Alien Holders. The 1997 Final Regulations are
effective for payments after December 31, 1999, regardless of the issue date of
the instrument with respect to which such payments are made, subject to certain
transition rules. In general, the 1997 Final regulations provide certification
requirements designed to simplify compliance by those responsible for
withholding on payments to United States Alien Holders. Among other provisions,
the 1997 Final Regulations provide, in the case of an entity classified as a
foreign partnership under United States tax principles, that the partners,
rather than the partnership, generally will be required to provide the required
certification to qualify for an exemption from withholding.
INFORMATION REPORTING TO HOLDERS
Subject to the qualifications discussed below, income on the Preferred
Securities will be reported to Holders on Form 1099, which forms should be
mailed to Holders of Preferred Securities by January 31 following each calendar
year.
The Trust will be obligated to report annually to Cede & Co., as Holder of
record of the Preferred Securities, the interest (and OID, if any) with respect
to the Preferred Securities that accrued during that year. The Trust currently
intends to report such information on Form 1099 prior to January 31 following
each calendar year even though the Trust is not legally required to report to
record Holders until April 15 following each calendar year.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Preferred Securities
may be subject to a "backup" withholding tax of 31% unless the Holder or the
United States Alien Holder complies with certain identification or certification
requirements. Any withheld amounts will be allowed as a credit against the
holder's United States federal income tax, if any, provided the required
information is provided to the Service.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PREFERRED
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER
TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
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CERTAIN ERISA CONSIDERATIONS
Before authorizing an investment in the Preferred Securities, fiduciaries
of pension, profit sharing or other employee benefit plans ("Plans") subject to
Employee Retirement Income Security Act of 1974, as amended ("ERISA") should
consider, among other matters, (i) ERISA's fiduciary standards (including its
prudence and diversification requirements), (ii) whether such fiduciaries have
authority to make such investment in the Preferred Securities under the
applicable Plan investment policies and governing instruments and (iii) rules
under ERISA and the Code that prohibit Plan fiduciaries from causing a Plan to
engage in a "prohibited transaction."
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well
as individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from, among other things, engaging in certain transactions
involving "plan assets" with persons who are "parties in interest" under ERISA
or "disqualified persons" under the Code (collectively, "Parties in Interest")
with respect to such Plan. A violation of these "prohibit transaction" rules may
result in an excise tax or other liabilities under ERISA and/or Section 4975 of
the Code for such persons, unless exemptive relief is available under an
applicable statutory or administrative exemption. Such administrative exemptions
include prohibited transaction class exemptions ("PTCE's"), such as PTCE 96-23
(for certain transactions determined by in-house asset managers), PTCE 91-38
(for certain transactions involving bank collective investment funds), PTCE
95-60 (for certain transactions involving bank collective investment funds),
PTCE 95-60 (for certain transactions involving insurance company general
accounts), PTCE 90-1 (for certain transactions involving insurance company
pooled separate accounts) and PTCE 84-14 (for certain transactions determined by
independent qualified asset managers).
The Department of Labor has issued a regulation (29 C.F.R. Section
2510.3-101) (the "Plan Assets Regulation") concerning the definition of what
constitutes the assets of a Plan. The Plan Assets Regulation provides that, as a
general rule, the underlying assets and properties of corporations,
partnerships, trusts and certain other entities in which a Plan makes an
"equity" investment will be deemed, for purposes of ERISA, to be assets of the
investing Plan unless certain exceptions apply.
Pursuant to an exception contained in the Plan Assets Regulations, the
assets of the Trust would not be deemed to be "plan assets" of investing Plans
if the equity interests acquired by employee benefit plans are "publicly-offered
securities" -- that is, they are (i) widely held (i.e., owned by more than 100
investors independent of the issuer and of each other), (ii) freely transferable
and (iii) sold as part of an offering pursuant to an effective registration
statement under the Securities Act and then timely registered under Section
12(b) or 12(g) of the Exchange Act. It is expected that the Preferred Securities
will meet the criteria of "publicly-offered securities" above. The Underwriters
expect that the Preferred Securities will be held by at least 100 independent
investors at the conclusion of the offering; there are no restrictions imposed
on the transfer of the Preferred Securities; and the Preferred Securities will
be sold as part of an offering pursuant to an effective registration statement
under the Securities Act, and then will be timely registered under the Exchange
Act.
Although it is expected that the assets of the Trust should not be deemed
to be "plan assets" of an investing Plan, if TXI or the Trust is a Party in
Interest with respect to the Plan, in the absence of an applicable exemption,
the Plan's purchase of the Preferred Securities from the Company would likely
constitute a prohibited transaction under Section 406(a)(1)(a) of ERISA and
Section 4975(c)(1)(a) of the Code. In addition, in the absence of an applicable
exemption, certain other transactions coincident to the Preferred Securities may
involve a prohibited transaction, such as a distribution of the Convertible
Subordinated Debentures from the Trust to a Plan investor.
Any plans or other entities whose assets include Plan assets subject to
ERISA or Section 4975 of the Code proposing to acquire Preferred Securities
should consult with their own counsel to confirm that such investment will not
result in a prohibited transaction that is not subject to an exemption and will
satisfy any other applicable requirements of ERISA and the Code. Each purchaser
using assets of a Plan to acquire Preferred Securities will be deemed to have
represented that its purchase and holding of such Preferred Securities will not
result in a non-exempt prohibited transaction under ERISA or the Code or will be
covered
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by the exemptive relief provided by PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption.
Governmental Plans and certain church plans are not subject to ERISA, and
are also not subject to the prohibited transaction provisions of Section 4975 of
the Code. However, state laws or regulations governing the investment and
management of the assets of such plans may contain fiduciary and prohibited
transaction provisions similar to those under ERISA and the Code discussed
above. Accordingly, fiduciaries of governmental and church plans, in
consultation with their advisers, should consider the impact of their respective
state laws on investments in the Preferred Securities and the considerations
discussed above to the extent applicable.
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UNDERWRITING
The names of the Underwriters of the Preferred Securities offered hereby
and the aggregate number of Preferred Securities which each severally has agreed
to purchase from the Trust, subject to the terms and conditions specified in the
Underwriting Agreement among the Company, the Trust and the Underwriters, are as
follows:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS PREFERRED SECURITIES
------------ --------------------
<S> <C>
------------
Total.......................................................
============
</TABLE>
If any Preferred Securities offered hereby are purchased by the
Underwriters, all such Preferred Securities will be so purchased. The
Underwriting Agreement contains certain provisions whereby, if any Underwriter
defaults in its obligation to purchase such Preferred Securities, and the
aggregate obligations of the Underwriters so defaulting do not exceed 10% of the
Preferred Securities offered hereby, the remaining Underwriters, or some of
them, must assume such obligations.
The Preferred Securities offered hereby are being initially offered
severally by the Underwriters for sale at the price set forth on the cover page
hereof or at such price less a concession not in excess of $0. per share on
sales to certain dealers. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $0. per share on sales to certain
other dealers. The offering of the Preferred Securities is made for delivery
when, as and if accepted by the Underwriters and subject to prior sale and to
withdrawal, cancellation or modification of the offer without notice. The
Underwriters reserve the right to reject any order for the purchase of the
shares. After the public offering, the public offering price, the concession and
the reallowance may be changed by the Managing Underwriters.
In view of the fact that the proceeds from the sale of the Preferred
Securities will be used to purchase the Convertible Subordinated Debentures
issued by TXI, the Underwriting Agreement provides that TXI will pay as
compensation for the Underwriters arranging the investment therein of such
proceeds an amount of $
per Preferred Security (or $ in the aggregate) for the accounts of the
Underwriters. Therefore, to the extent of such sales, the aggregate amount of
compensation will be less than that specified in the preceding sentence.
Prior to this offering, there has been no public market for the Preferred
Securities. Application will be made to list the Preferred Securities on the
NYSE. Trading of the Preferred Securities on the NYSE is expected to commence
within a 30-day period after the initial delivery of the Preferred Securities.
The Underwriters have advised TXI that they intend to make a market in the
Preferred Securities prior to commencement of trading on the NYSE, but they are
not obliged to do so and may discontinue market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
the Preferred Securities.
In order to meet one of the requirements for listing the Preferred
Securities on the NYSE, the Underwriters will undertake to sell lots of 100 or
more Preferred Securities to a minimum of 400 beneficial holders.
TXI and the Trust have agreed that, during a period of 30 days from the
date of this Prospectus, neither will offer, sell, contract to sell or otherwise
dispose of any securities of TXI or the Trust that are substantially
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similar to the Preferred Securities, or that are convertible into or
exchangeable for, or otherwise represent a right to acquire, any such
securities, except in the offering or with the prior written consent of the
Underwriters.
TXI and the Trust have agreed to indemnify the Underwriters and certain
other persons against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), and to contribute to
payments the Underwriters may be required to make in respect thereof.
In connection with the offering of the Preferred Securities, the
Underwriters and any selling group members and their respective affiliates may
engage in transactions to stabilize, maintain or otherwise affect the market
price of the Preferred Securities. Specifically, the Underwriters may overallot
by selling more Preferred Securities than they are committed to purchase from
the Trust. In such a case, to cover all or part of the short position, the
Underwriters may purchase Preferred Securities in the open market following
completion of the initial offering of the Preferred Securities. The Underwriters
also may engage in stabilizing transactions in which they bid for, and purchase.
Preferred Securities at a level above that which might otherwise prevail in the
open market for the purpose of preventing or retarding a decline in the market
price of the Preferred Securities distributed by that Underwriter or dealer. Any
of the foregoing transactions may result in the maintenance of a price of the
Preferred Securities at a level above that which might otherwise prevail in the
open market. Neither TXI nor any Underwriter makes any representation or
prediction as to the direction or magnitude of any offer that the transactions
described above may have on the price of the Preferred Securities. The
Underwriters are not required to engage in any of the foregoing transactions,
and, if commenced, such transaction may be discontinued at anytime without
notice.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or financial services to
TXI and its affiliates, for which such Underwriters or their affiliates have
received or will receive customary fees and commissions.
LEGAL MATTERS
Certain matters of Delaware law relating to the Trust will be passed upon
for the Company by Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware,
special counsel to the Company. Certain legal matters will be passed upon for
the Company by Locke Purnell Rain Harrell (A Professional Corporation), Dallas,
Texas, and for the Underwriters by Gibson, Dunn & Crutcher LLP, New York, New
York.
EXPERTS
The Consolidated Financial Statements of Texas Industries, Inc. as of May
31, 1995, 1996 and 1997, and for each of the three fiscal years then ended,
appearing in this Prospectus and the registration statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
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ADDITIONAL INFORMATION
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission"), through the Electronic Data Gathering, Analysis
and Retrieval System ("EDGAR"), a registration statement on Form S-3 under the
Securities Act with respect to the Preferred Securities offered hereby (the
"Registration Statement"). This Prospectus, filed as part of the Registration
Statement, does not contain all of the information included in the Registration
Statement and the exhibits and schedules thereto, certain portions of which have
been omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company, the Trust and the Preferred
Securities offered hereby, reference is hereby made to the Registration
Statement and the exhibits and schedules filed therewith or incorporated by
reference thereto. Statements contained in this Prospectus as to the contents of
any contract, agreement or other document are not necessarily complete and in
each such instance, reference is made to the copy of such contract, agreement or
other document filed as an exhibit to the Registration Statement, including
documents incorporated by reference, for a more complete description of the
matters involved and each such statement shall be deemed qualified in its
entirety by such reference. The Registration Statement, including the exhibits
and schedules thereto, may be inspected without charge and copied at the offices
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at 7
World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
materials may be obtained at the prescribed rates from the Commission's Public
Reference Section at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Electronic registration statements filed through EDGAR
may also be accessed electronically through the Commission's home page on the
World Wide Web at http://www.sec.gov.
The Company and the Trust are subject to the periodic reporting
requirements of the Exchange Act, and in accordance therewith, it files reports,
proxy statements and other information required thereby with the Commission via
EDGAR. Copies of such material may be inspected and copied at the offices of the
Commission and accessed electronically through the Commission's home page on the
World Wide Web. Reports, proxy statements, other required information statements
and other information concerning the Company may also be inspected at the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference:
1. Annual Report on Form 10-K for the fiscal year ended May 31, 1997.
2. Quarterly Report on Form 10-Q for the quarter ended August 31, 1997.
3. Quarterly Report on Form 10-Q for the quarter ended November 30, 1997.
4. Quarterly Report on Form 10-Q for the quarter ended February 28, 1998.
5. Current Report on Form 8-K dated July 30, 1997.
6. Current Report on Form 8-K dated September 16, 1997.
7. Current Report on Form 8-K dated January 26, 1998.
8. Proxy Statement for the Annual Meeting of Stockholders held on October
21, 1997.
9. The description of the Company's Common Stock contained in the Company's
Registration Statement on Form S-3 No. 2-80855) dated January 13, 1973.
All documents filed by the Company or the Trust pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Preferred Securities hereby
shall be deemed to be incorporated by reference into this Prospectus and to be a
68
<PAGE> 95
part hereof from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which is or is 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.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the documents
incorporated herein by reference (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference into such
documents). Requests for such copies should be directed to the Director-Investor
Relations, of the Company at Texas Industries, Inc., 1341 West Mockingbird Lane,
Dallas, Texas 75247-6913 or by telephone at (972) 647-6700.
69
<PAGE> 96
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 97
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................... F-2
Consolidated Balance Sheets at May 31, 1997 and 1996........ F-3
Consolidated Statements of Income for the years ended May
31, 1997, 1996 and 1995................................... F-4
Consolidated Statements of Cash Flows for the years ended
May 31, 1997, 1996 and 1995............................... F-5
Consolidated Statements of Shareholders' Equity for the
years ended May 31, 1997, 1996, 1995 and 1994............. F-6
Notes to Consolidated Financial Statements.................. F-7
Consolidated Balance Sheets at February 28, 1998 (Unaudited)
and May 31, 1997.......................................... F-14
Consolidated Statements of Income (Unaudited) for the three
months ended February 28, 1998 and 1997 and the nine
months ended February 28, 1998 and 1997................... F-15
Consolidated Statements of Cash Flows (Unaudited) for the
nine months ended February 28, 1998 and 1997.............. F-16
Notes to Consolidated Financial Statements (Unaudited)...... F-17
</TABLE>
F-1
<PAGE> 98
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Texas Industries, Inc.
We have audited the accompanying consolidated balance sheets of Texas
Industries, Inc. and subsidiaries as of May 31, 1997 and 1996, and the related
consolidated statements of income, cash flows and changes in shareholders'
equity for each of the three years in the period ended May 31, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Texas
Industries, Inc. and subsidiaries at May 31, 1997 and 1996, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended May 31, 1997, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Dallas, Texas
July 8, 1997
F-2
<PAGE> 99
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
MAY 31,
---------------------
1997 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
CURRENT ASSETS
Cash...................................................... $ 19,834 $ 28,055
Notes and accounts receivable............................. 122,783 113,762
Inventories............................................... 167,146 150,526
Prepaid expenses.......................................... 34,613 32,574
-------- --------
TOTAL CURRENT ASSETS.............................. 344,376 324,917
OTHER ASSETS
Real estate and other investments......................... 14,920 19,751
Goodwill and other intangibles............................ 63,297 60,377
Other..................................................... 26,553 20,713
-------- --------
104,770 100,841
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements................................ 118,248 110,836
Buildings................................................. 66,156 60,610
Machinery and equipment................................... 815,019 766,434
-------- --------
999,423 937,880
Less allowances for depreciation.......................... 600,646 562,575
-------- --------
398,777 375,305
-------- --------
$847,923 $801,063
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable.................................... $ 51,021 $ 56,652
Accrued interest, wages and other items................... 36,909 35,446
Current portion of long-term debt......................... 13,452 13,474
-------- --------
TOTAL CURRENT LIABILITIES......................... 101,382 105,572
LONG-TERM DEBT.............................................. 176,056 160,209
DEFERRED FEDERAL INCOME TAXES AND OTHER CREDITS............. 80,080 80,139
MINORITY INTEREST........................................... 37,594 35,121
SHAREHOLDERS' EQUITY
Common stock, $1 par value................................ 25,067 12,534
Additional paid-in capital................................ 255,149 266,303
Retained earnings......................................... 262,774 193,929
Cost of common shares in treasury......................... (90,179) (52,744)
-------- --------
452,811 420,022
-------- --------
$847,923 $801,063
======== ========
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE> 100
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
---------------------------------
1997 1996 1995
--------- --------- ---------
(IN THOUSANDS EXCEPT PER SHARE)
<S> <C> <C> <C>
NET SALES................................................... $973,824 $967,449 $830,526
COSTS AND EXPENSES (INCOME)
Cost of products sold..................................... 767,030 756,715 681,824
Selling, general and administrative....................... 76,535 68,852 58,275
Interest.................................................. 18,885 19,960 20,117
Other income.............................................. (11,848) (13,119) (7,571)
-------- -------- --------
850,602 832,408 752,645
-------- -------- --------
INCOME BEFORE THE FOLLOWING ITEMS.................... 123,222 135,041 77,881
Income taxes................................................ 41,189 47,256 25,700
-------- -------- --------
82,033 87,785 52,181
Minority interest in Chaparral.............................. (6,559) (7,831) (4,164)
-------- -------- --------
NET INCOME........................................ $ 75,474 $ 79,954 $ 48,017
======== ======== ========
Average common shares....................................... 22,243 22,742 24,851
Net income per common share................................. $ 3.40 $ 3.52 $ 1.94
======== ======== ========
Cash dividends.............................................. $ .25 $ .20 $ .15
======== ======== ========
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE> 101
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
---------------------------------
1997 1996 1995
-------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income.............................................. $ 75,474 $ 79,954 $ 48,017
Loss (gain) on disposal of assets....................... 2,131 977 (1,994)
Non-cash items
Depreciation, depletion and amortization............. 53,909 49,280 49,342
Deferred taxes....................................... 683 6,822 5,434
Undistributed minority interest...................... 5,684 6,771 3,028
Other -- net......................................... 6,367 6,454 4,798
Changes in operating assets and liabilities
Notes and accounts receivable........................ (12,570) (13,417) (22,608)
Inventories and prepaid expenses..................... (22,607) (22,921) 10,781
Accounts payable and accrued liabilities............. (3,552) 3,637 17,935
Real estate and investments.......................... 4,380 9,906 1,131
-------- --------- --------
Net cash provided by operations................. 109,899 127,463 115,864
INVESTING ACTIVITIES
Capital expenditures.................................... (85,188) (79,300) (48,751)
Proceeds from disposition of assets..................... 5,281 1,799 3,132
Other -- net............................................ (3,733) (3,154) (1,456)
-------- --------- --------
Net cash used by investing...................... (83,640) (80,655) (47,075)
FINANCING ACTIVITIES
Repayments of short-term borrowing...................... -- -- (15,000)
Proceeds of long-term borrowing......................... 69,206 97,552 50,485
Debt retirements........................................ (53,392) (126,593) (50,127)
Purchase of treasury shares............................. (41,572) (417) (54,688)
Purchase of Chaparral stock............................. (3,770) (12,506) --
Dividends paid.......................................... (5,361) (4,451) (3,618)
Other -- net............................................ 409 1,674 (1,619)
-------- --------- --------
Net cash used by financing...................... (34,480) (44,741) (74,567)
-------- --------- --------
Increase (decrease) in cash............................... (8,221) 2,067 (5,778)
Cash at beginning of year................................. 28,055 25,988 31,766
-------- --------- --------
Cash at end of year....................................... $ 19,834 $ 28,055 $ 25,988
======== ========= ========
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE> 102
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
COMMON
STOCK ADDITIONAL TREASURY TOTAL
PREFERRED $1 PAR PAID-IN RETAINED COMMON SHAREHOLDERS'
STOCK VALUE CAPITAL EARNINGS STOCK EQUITY
--------- ------- ---------- -------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
May 31, 1994............................ $ 598 $12,534 $265,790 $ 75,511 $ (1,762) $352,671
Net income............................ 48,017 48,017
Cash dividends
Preferred stock -- $5 a share...... (30) (30)
Common stock -- $.15 a share....... (3,588) (3,588)
Treasury stock issued for bonuses and
options -- 40,508 shares........... 255 (323) 795 727
Treasury stock purchased -- 2,996,956
shares............................. (54,688) (54,688)
----- ------- -------- -------- -------- --------
May 31, 1995............................ 598 12,534 266,045 119,587 (55,655) 343,109
Net income............................ 79,954 79,954
Cash dividends
Preferred stock -- $4.72 a share... (28) (28)
Common stock -- $.20 a share....... (4,423) (4,423)
Treasury stock issued for bonuses and
options -- 194,628 shares.......... 288 (1,161) 3,328 2,455
Treasury stock purchased -- 15,696
shares............................. (417) (417)
Retirement of preferred stock......... (598) (30) (628)
----- ------- -------- -------- -------- --------
May 31, 1996............................ -- 12,534 266,303 193,929 (52,744) 420,022
Net income............................ 75,474 75,474
Cash dividends
Common stock -- $.25 a share....... (5,361) (5,361)
Shares issued under two-for-one
stock split........................ 12,533 (12,533) --
Treasury stock issued for bonuses and
options -- 262,497 shares.......... 1,379 (1,268) 4,137 4,248
Treasury stock purchased -- 1,566,554
shares............................. (41,572) (41,572)
----- ------- -------- -------- -------- --------
May 31, 1997............................ $ -- $25,067 $255,149 $262,774 $(90,179) $452,811
===== ======= ======== ======== ======== ========
</TABLE>
At May 31, 1997, Common Stock and Additional Paid-in Capital include $127.8
million of accumulated transfers from Retained Earnings in connection with stock
dividends.
See notes to consolidated financial statements.
F-6
<PAGE> 103
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Texas Industries, Inc. (the Company or TXI), through its subsidiaries, is a
producer of steel and cement/concrete products for the construction and
manufacturing industries. Chaparral Steel Company (Chaparral) produces beam,
merchant and special bar quality rounds, reinforcing bars and channels,
primarily for markets in North America and, under certain market conditions,
Europe and Asia. Cement/concrete operations supply cement and aggregates,
ready-mix, pipe, block and brick from facilities concentrated primarily in Texas
and Louisiana, with several products marketed throughout the U.S.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Estimates: The preparation of financial statements and accompanying notes
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported. Actual
results could differ from those estimates.
Principles of Consolidation: The consolidated financial statements include
the accounts of the Company and all subsidiaries. The minority interest
represents the separate public ownership of Chaparral, 15.5% at May 31, 1997 and
16.4% at May 31, 1996.
Property, Plant and Equipment: Property, plant and equipment is recorded at
cost. Provisions for depreciation are computed generally using the straight-line
method. Provisions for depletion of mineral deposits are computed on the basis
of the estimated quantity of recoverable raw materials.
Cash Equivalents: For cash flow purposes, temporary investments which have
maturities of less than 90 days when purchased are considered cash equivalents.
Earnings Per Share: Earnings per share are computed by deducting preferred
dividends from net income and adjusting for amortization of additional goodwill
in connection with the contingent payment for the acquisition of Chaparral, then
dividing this amount by the weighted average number of common shares outstanding
during the period, including common stock equivalents. Earnings per share and
all other common share information have been adjusted to give effect to the
two-for-one stock split in February 1997.
Statement of Financial Accounting Standards No. 128 "Earnings per Share"
(SFAS 128), which is not effective until December 15, 1997, will change the
method currently used to compute earnings per share and require the restatement
of all prior periods. The impact is expected to result in an increase in basic
earnings per share over primary earnings per share of $.08, $.09 and $.02, for
the fiscal years ended 1997, 1996 and 1995, respectively.
Intangible Assets: Goodwill and other intangibles is presented net of
accumulated amortization of $17.9 million at May 31, 1997 and $15.0 million at
May 31, 1996. Goodwill resulting from the acquisition of Chaparral of $57.2
million at May 31, 1997 and $59.2 million at May 31, 1996 (net of accumulated
amortization), is being amortized currently on a straight-line basis over a
40-year period. Other intangibles consisting primarily of goodwill and
non-compete agreements are being amortized on a straight-line basis over periods
of 2 to 15 years. Management reviews remaining goodwill and other intangibles
with consideration toward recovery through future operating results
(undiscounted) at the current rates of amortization.
Commissioning Costs: The Company's policy for new facilities is to
capitalize certain costs until the facility is substantially complete and ready
for its intended use. Chaparral substantially completed its large beam mill
during the third quarter of fiscal 1992. Deferred costs totaling $15.1 million
were amortized over a five-year period. The annual amount of amortization
charged to income was $2.0 million in 1997 and $3.0 million in 1996 and 1995.
Income Taxes: Accounting for income taxes uses the liability method of
recognizing and classifying deferred income taxes. The Company joins in filing a
consolidated return with its subsidiaries. Current and deferred tax expense is
allocated among the members of the group based on a stand-alone calculation of
the tax of the individual member.
F-7
<PAGE> 104
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Financial Instruments: The estimated fair value of each class of financial
instrument as of May 31, 1997 approximates carrying value except for Chaparral's
long-term debt. The fair value of long-term debt at May 31, 1997, estimated by
applying discounted cash flow analysis based on interest rates currently
available to the Company for such debt with similar terms and remaining
maturities, is approximately $198.2 million compared to the carrying amount of
$189.5 million.
Certain amounts in the 1995 and 1996 financial statements have been
reclassified to conform to the 1997 presentation.
WORKING CAPITAL
Working capital totaled $243.0 million at May 31, 1997, compared to $219.3
million at the prior year-end.
Notes and accounts receivable of $122.8 million at May 31, 1997, compared
with $113.8 million in 1996, are presented net of allowances for doubtful
receivables of $2.5 million in 1997 and $3.1 million in 1996.
Inventories are stated at cost (not in excess of market) generally using
the last-in, first-out method (LIFO). If the average cost method (which
approximates current replacement cost) had been used, inventory values would
have been higher by $11.7 million in 1997 and $14.2 million in 1996.
Inventories are summarized as follows:
<TABLE>
<CAPTION>
1997 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Finished products........................................... $ 77,021 $ 64,347
Work in process............................................. 27,162 23,345
Raw materials and supplies.................................. 62,963 62,834
-------- --------
$167,146 $150,526
======== ========
</TABLE>
LONG-TERM DEBT
Long-term debt is comprised of the following:
<TABLE>
<CAPTION>
1997 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Bank obligations, maturing through 2001, interest rates from $ 40,000 $ 9,000
6.31% to 6.38% (.625% over LIBOR).........................
Senior notes due through 2008, interest rates average 75,000 75,000
7.28%.....................................................
Senior notes of Chaparral, due through 2004, interest rates 56,000 64,000
average 10.2%.............................................
First mortgage notes of Chaparral, due through 1999, 8,182 14,320
interest rate 14.2%.......................................
Pollution control bonds, due through 2007, interest rate 7,935 8,615
6.38% (75% of prime)......................................
Other, maturing through 2005, interest rates from 8% to 2,391 2,748
10%.......................................................
-------- --------
189,508 173,683
Less current maturities..................................... 13,452 13,474
-------- --------
$176,056 $160,209
======== ========
</TABLE>
Annual maturities of long-term debt for each of the five succeeding years
are $13.5, $13.3, $9.0, $8.9 and $48.7 million.
The Company has available a bank-financed $100 million long-term line of
credit. In addition to the $40 million currently outstanding under this line,
$8.9 million has been utilized to support letters of credit.
F-8
<PAGE> 105
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Commitment fees at a current annual rate of .22% are paid on the unused portion
of this line. In addition, Chaparral has available a bank-financed $10 million
short-term line of credit which will expire December 31, 1997, if not renewed.
The interest chargeable on borrowings under this line is .375% over LIBOR.
Commitment fees at an annual rate of .125% are paid on the unused portion of
this line.
Loan agreements contain covenants which provide for minimum working
capital, restrictions on purchases of treasury stock and payment of dividends on
common stock, and limitations on incurring certain indebtedness and making
certain investments. Under the most restrictive of these agreements, the
aggregate amount of annual cash dividends on common stock is limited based on
the ratio, excluding Chaparral, of earnings before interest, taxes, depreciation
and amortization plus dividends from Chaparral to fixed charges. In addition,
Chaparral loan agreements restrict dividends and advances to its shareholders,
including the parent company, to $52 million as of May 31, 1997. The Company and
Chaparral are in compliance with all loan covenant restrictions.
Property, plant and equipment, principally Chaparral's, carried at a net
amount of approximately $215.4 million at May 31, 1997 is mortgaged as
collateral for $9.4 million of secured debt.
The amount of interest paid was $19.3 million in 1997, $18.9 million in
1996 and $18.4 million in 1995. Interest capitalized totalled $190,000 in 1997.
SHAREHOLDERS' EQUITY
Common stock consists of:
<TABLE>
<CAPTION>
1997 1996
------ ------
(IN THOUSANDS)
<S> <C> <C>
Shares authorized........................................... 40,000 40,000
Shares outstanding at May 31................................ 20,896 22,200
Average shares outstanding including equivalents............ 22,243 22,742
Shares held in treasury..................................... 4,171 2,867
Shares reserved for stock options and other................. 2,163 2,422
</TABLE>
There are authorized 100,000 shares of Cumulative Preferred Stock, no par
value, of which 20,000 shares are designated $5 Cumulative Preferred Stock
(Voting), redeemable at $105 per share and entitled to $100 per share upon
dissolution. On March 29, 1996 the Company redeemed and retired all outstanding
shares of such $5 Cumulative Preferred Stock. An additional 25,000 shares are
designated Series B Junior Participating Preferred Stock. The Series B Preferred
Stock is not redeemable and ranks, with respect to the payment of dividends and
the distribution of assets, junior to (i) all other series of the Preferred
Stock unless the terms of any other series shall provide otherwise and (ii) the
$5 Cumulative Preferred Stock. Pursuant to a Rights Agreement, in November 1996,
the Company distributed a dividend of one preferred share purchase right for
each outstanding share of the Company's Common Stock. Each right entitles the
holder to purchase from the Company one two-thousandth of a share of the Series
B Junior Participating Preferred Stock at a price of $122.50 per one
two-thousandth share of Series B Preferred Stock, subject to adjustment. The
rights will expire on November 1, 2006 unless the date is extended or the rights
are earlier redeemed or exchanged by the Company pursuant to the Rights
Agreement.
STOCK OPTION PLANS
The Company's stock option plans provide that non-qualified and incentive
stock options to purchase Common Stock may be granted to directors, officers and
key employees at market prices at date of grant. Generally, options become
exercisable in installments beginning one or two years after date of grant and
expire six or ten years later depending on the initial date of grant. The
Company has elected to continue utilizing the accounting prescribed by APB No.
25 for stock issued under these plans and therefore no compensation cost has
been recognized. If compensation cost had been determined based on the fair
value at the date of grant
F-9
<PAGE> 106
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
consistent with the method prescribed by Statement of Financial Accounting
Standard No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123), the
Company's net income and earnings per share would have been reduced to the
following pro forma amounts:
<TABLE>
<CAPTION>
1997 1996
------ ------
(IN THOUSANDS)
<S> <C> <C>
Net income
As reported............................................... 75,474 79,954
Pro forma................................................. 74,272 79,548
Primary earnings per share
As reported............................................... 3.40 3.52
Pro forma................................................. 3.36 3.51
</TABLE>
Because the method of accounting under SFAS No. 123 has not been applied to
options granted prior to June 1, 1995 the pro forma compensation cost may not be
representative of that to be expected in future years.
The fair value of each option grant is estimated on the date of grant for
purposes of the pro forma disclosures using the Black-Scholes option-pricing
model with the following weighted average assumptions used for grants made in
1997 and 1996, respectively: dividend yield of 1.05% and .89%, expected
volatility of 24% and 24%; risk-free interest rates of 6.38% and 6.15% and
expected lives of 6.4 and 6.4 years.
A summary of option transactions for the two years ended May 31, 1997
follows:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
SHARES UNDER OPTION OPTION PRICE
---------------------- ----------------
1997 1996 1997 1996
--------- --------- ------ ------
<S> <C> <C> <C> <C>
Outstanding at June 1.............................. 1,232,598 1,096,882 $15.98 $12.70
Granted.......................................... 809,200 374,400 26.96 22.74
Exercised........................................ (234,067) (192,444) 10.35 11.05
Cancelled........................................ (10,600) (46,240) 22.66 13.45
--------- --------- ------ ------
Outstanding at May 31.............................. 1,797,131 1,232,598 $21.62 $15.98
Options exercisable at May 31...................... 347,491 329,918 $15.18 $11.04
Weighted-average fair value of options granted
during the year.................................. $ 9.46 $ 7.98
</TABLE>
As of May 31, 1997, the 1.8 million option shares outstanding have an
exercise price between $10.19 and $32.54 and a weighted-average remaining life
of 8.0 years. In addition, 240,440 shares were available for future grants.
INCOME TAXES
The Company made income tax payments of $39.5 million, $38.7 million, and
$19.7 million in 1997, 1996 and 1995, respectively.
The provisions for income taxes are composed of:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Current..................................................... $40,506 $40,434 $20,266
Deferred.................................................... 683 6,822 5,434
------- ------- -------
Expense..................................................... $41,189 $47,256 $25,700
======= ======= =======
</TABLE>
F-10
<PAGE> 107
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
A reconcilement from statutory federal taxes to the above provisions
follows:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Taxes at statutory rate............................... $43,127 $47,267 $27,258
Tax credit carryforwards.............................. -- -- (333)
Additional depletion.................................. (2,984) (2,707) (2,352)
Goodwill.............................................. 702 702 809
State income tax...................................... 912 1,905 552
Non taxable insurance benefits........................ (664) (561) (502)
Other -- net.......................................... 96 653 268
------- ------- -------
$41,189 $47,256 $25,700
======= ======= =======
</TABLE>
The components of the net deferred tax liability at May 31 are summarized
below:
<TABLE>
<CAPTION>
1997 1996
------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets
Deferred compensation..................................... $ 5,523 $ 4,732
Expenses not currently tax deductible..................... 8,332 9,496
Tax cost in inventory..................................... 586 3,698
------- --------
Total deferred tax assets......................... 14,441 17,926
Deferred tax liabilities
Accelerated tax depreciation.............................. 64,154 65,481
Deferred real estate gains................................ 5,178 5,672
Commissioning costs....................................... -- 704
Other..................................................... 1,526 1,803
------- --------
Total deferred tax liabilities.................... 70,858 73,660
------- --------
Net tax liability........................................... 56,417 55,734
Less current portion (asset)................................ (6,236) (10,175)
------- --------
Net deferred tax liability.................................. $62,653 $ 65,909
======= ========
</TABLE>
LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES
The Company is subject to federal, state and local environmental laws and
regulations concerning, among other matters, air emissions, furnace dust
disposal and wastewater discharge. The Company believes it is in substantial
compliance with applicable environmental laws and regulations. Notwithstanding
such compliance, if damage to persons or property or contamination of the
environment has been or is caused by the conduct of the Company's business or by
hazardous substances or wastes used in, generated or disposed of by the Company,
the Company may be held liable for such damages and be required to pay the cost
of investigation and remediation of such contamination. The amount of such
liability could be material. Changes in federal or state laws, regulations or
requirements or discovery of unknown conditions could require additional
expenditures by the Company.
The Company and subsidiaries are defendants in lawsuits which arose in the
normal course of business. In management's judgment (based on the opinion of
counsel) the ultimate liability, if any, from such legal proceedings will not
have a material effect on the consolidated financial position.
F-11
<PAGE> 108
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
RETIREMENT PLANS
Substantially all employees of the Company are covered by a series of
defined contribution retirement plans. The amount of pension expense charged to
costs and expenses for the above plans was $3.4 million in 1997, $2.9 million in
1996 and $2.6 million in 1995. It is the Company's policy to fund the plans to
the extent of charges to income.
INCENTIVE PLANS
All personnel employed as of May 31 share in the pretax income of the
Company for the year then ended based on predetermined formulas. The duration of
most of the plans is one year; certain executives are additionally covered under
a three-year plan. All plans are subject to annual review by the Company's Board
of Directors. The expense for these plans, included in selling, general and
administrative, was $14.8 million, $15.1 million and $8.9 million for 1997, 1996
and 1995, respectively.
Certain executives of Chaparral participate in a deferred compensation plan
based on a five-year average of earnings. Amounts recorded as expense
(reduction) under the plan were $1.9 million, $.7 million and $(.1) million for
1997, 1996 and 1995, respectively.
OPERATING LEASES
Total expense for operating leases for mobile equipment, office space and
other items (other than for mineral rights) amounted to $17.2 million in 1997,
$16.4 million in 1996 and $12.0 million in 1995. Non-cancelable operating leases
with an initial or remaining term of more than one year totaled $61.2 million at
May 31, 1997. Annual lease payments for the five succeeding years are $15.2
million, $8.8 million, $8.6 million, $8.0 million and $6.6 million.
BUSINESS SEGMENTS
Business segment information is presented on pages 9 and 10. Intersegment
sales, which are not material, are accounted for at prices comparable to normal
trade customer sales. Operating profit is net sales less operating costs and
expenses, excluding general corporate expenses and interest expense.
Identifiable assets by segment are those assets that are used in the Company's
operation in each segment. Corporate assets consist primarily of cash, real
estate subsidiaries and other financial assets not identified with a major
business segment.
F-12
<PAGE> 109
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following is a summary of quarterly financial information (in thousands
except per share):
<TABLE>
<CAPTION>
AUGUST NOVEMBER FEBRUARY MAY
-------- -------- -------- --------
<S> <C> <C> <C> <C>
1997
- ------------------------------------------------
Net Sales
Steel......................................... $149,527 $143,637 $147,715 $175,797
Cement/concrete............................... 96,415 90,739 68,903 101,091
-------- -------- -------- --------
245,942 234,376 216,618 276,888
======== ======== ======== ========
Operating profit
Steel......................................... 15,508 14,754 17,861 23,364
Cement/concrete............................... 25,513 22,557 8,176 26,802
-------- -------- -------- --------
41,021 37,311 26,037 50,166
======== ======== ======== ========
Net income...................................... 19,884 17,903 10,126 27,561
Per share
Net income*................................... .87 .79 .47 1.29
Dividends..................................... .05 .05 .075 .075
Stock price
High....................................... 34 5/16 33 7/16 29 5/16 29 1/4
Low........................................ 31 5/16 26 15/16 24 1/8 20 7/8
1996
- ------------------------------------------------
Net Sales
Steel......................................... $138,141 $154,990 $158,954 $155,571
Cement/concrete............................... 93,963 89,271 76,086 100,473
-------- -------- -------- --------
232,104 244,261 235,040 256,044
======== ======== ======== ========
Operating profit
Steel......................................... 13,346 19,892 21,173 21,365
Cement/concrete............................... 24,844 21,903 13,685 29,696
-------- -------- -------- --------
38,190 41,795 34,858 51,061
======== ======== ======== ========
Net income...................................... 17,131 21,452 16,004 25,367
Per share
Net income.................................... .76 .95 .70 1.11
Dividends..................................... .05 .05 .05 .05
Stock price
High....................................... 24 7/8 27 5/8 31 1/8 34 5/8
Low........................................ 17 13/16 23 1/4 25 1/8 30 1/4
</TABLE>
- ---------------
* The sum of these amounts does not equal the annual amount because of changes
in the average number of common equity shares outstanding during the year.
MERGER PROPOSAL
On May 22, 1997, the Company made an offer to merge with Chaparral Steel
Company. Of the approximately 28.4 million shares of Chaparral outstanding at
May 31, 1997, the Company owns 24.0 million shares with the balance of the
outstanding shares publicly traded on the New York Stock Exchange. Under the
terms of the offer, owners of the publicly traded shares of Chaparral would
receive consideration of $14.25 per share.
F-13
<PAGE> 110
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
FEBRUARY 28, MAY 31,
1998 1997
------------ --------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
CURRENT ASSETS
Cash...................................................... $ 4,428 $ 19,834
Notes and accounts receivable............................. 152,079 122,783
Inventories............................................... 166,571 167,146
Prepaid expenses.......................................... 45,467 34,613
---------- --------
TOTAL CURRENT ASSETS.............................. 368,545 344,376
OTHER ASSETS
Real estate and other investments......................... 13,301 14,920
Goodwill and other intangibles............................ 155,081 63,297
Other..................................................... 33,110 26,553
---------- --------
201,492 104,770
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements................................ 133,298 118,248
Buildings................................................. 68,199 66,156
Machinery and equipment................................... 979,092 815,019
---------- --------
1,180,589 999,423
Less allowances for depreciation.......................... 633,258 600,646
---------- --------
547,331 398,777
---------- --------
$1,117,368 $847,923
========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable.................................... $ 90,010 $ 51,021
Accrued interest, wages and other items................... 43,573 36,909
Current portion of long-term debt......................... 13,430 13,452
---------- --------
TOTAL CURRENT LIABILITIES......................... 147,013 101,382
LONG-TERM DEBT.............................................. 369,404 176,056
DEFERRED FEDERAL INCOME TAXES AND OTHER CREDITS............. 83,402 80,080
MINORITY INTEREST........................................... -- 37,594
SHAREHOLDERS' EQUITY
Common stock, $1 par value................................ 25,067 25,067
Additional paid-in capital................................ 255,149 255,149
Retained earnings......................................... 324,605 262,774
Cost of common shares in treasury......................... (87,272) (90,179)
---------- --------
517,549 452,811
---------- --------
$1,117,368 $847,923
========== ========
</TABLE>
See notes to consolidated financial statements.
F-14
<PAGE> 111
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
FEBRUARY 28, FEBRUARY 28,
------------------- -------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE)
<S> <C> <C> <C> <C>
NET SALES.......................................... $281,421 $216,618 $861,168 $696,936
COSTS AND EXPENSES (INCOME)
Cost of products sold............................ 228,074 178,129 683,116 554,956
Selling, general and administrative.............. 23,752 17,431 67,798 56,006
Interest......................................... 6,205 4,852 14,418 14,165
Other income..................................... (5,059) (1,824) (10,603) (7,169)
-------- -------- -------- --------
252,972 198,588 754,729 617,958
-------- -------- -------- --------
INCOME BEFORE THE FOLLOWING ITEMS........ 28,449 18,030 106,439 78,978
Income taxes....................................... 9,201 6,330 35,252 26,767
-------- -------- -------- --------
19,248 11,700 71,187 52,211
Minority interest in Chaparral..................... (620) (1,574) (4,400) (4,298)
-------- -------- -------- --------
NET INCOME............................... $ 18,628 $ 10,126 $ 66,787 $ 47,913
======== ======== ======== ========
BASIC
Average shares................................... 21,135 21,418 21,066 22,012
Earnings per share............................... $ .88 $ .48 $ 3.18 $ 2.18
======== ======== ======== ========
DILUTED
Average shares................................... 21,912 21,786 21,717 22,457
Earnings per share............................... $ .85 $ .47 $ 3.08 $ 2.14
======== ======== ======== ========
Cash dividends..................................... $ .075 $ .075 $ .225 $ .175
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
F-15
<PAGE> 112
TEXAS INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FEBRUARY 28,
---------------------
1998 1997
--------- --------
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income................................................ $ 66,787 $ 47,913
Loss on disposal of assets................................ 611 186
Non-cash items
Depreciation, depletion and amortization............... 45,001 40,979
Deferred taxes......................................... (1,538) (2,331)
Undistributed minority interest........................ 4,177 3,643
Other -- net........................................... 5,601 4,182
Changes in operating assets and liabilities
Notes and accounts receivable.......................... (12,537) 2,226
Inventories and prepaid expenses....................... 6,305 (27,075)
Accounts payable and accrued liabilities............... 28,126 (4,002)
Real estate and investments............................ 1,834 2,742
--------- --------
Net cash provided by operations................... 144,367 68,463
INVESTING ACTIVITIES
Purchase of Riverside Cement Company...................... (110,916) --
Chaparral merger.......................................... (71,970) --
Capital expenditures -- Virginia steel facility........... (47,881) --
Capital expenditures -- other............................. (113,568) (65,262)
Proceeds from disposal of assets.......................... 2,282 1,426
Other -- net.............................................. (4,300) (2,316)
--------- --------
Net cash used by investing........................ (346,353) (66,152)
FINANCING ACTIVITIES
Proceeds from long-term borrowing......................... 267,639 53,206
Debt retirements.......................................... (74,324) (28,726)
Purchase of treasury shares............................... (558) (41,572)
Purchase of Chaparral stock............................... -- (3,770)
Dividends paid............................................ (4,721) (3,794)
Other -- net.............................................. (1,456) (1,707)
--------- --------
Net cash provided (used) by financing............. 186,580 (26,363)
--------- --------
Decrease in cash............................................ (15,406) (24,052)
Cash at beginning of period................................. 19,834 28,055
--------- --------
Cash at end of period....................................... $ 4,428 $ 4,003
========= ========
</TABLE>
See notes to consolidated financial statements.
F-16
<PAGE> 113
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Texas Industries, Inc. (the Company or TXI), through its subsidiaries, is a
producer of steel and cement, aggregate and concrete products for the
construction and manufacturing industries. Chaparral Steel Company (Chaparral)
produces beams, merchant and special bar quality rounds, reinforcing bars and
channels, primarily for markets in North America and, under certain market
conditions, Europe and Asia. Cement, aggregate and concrete operations supply
cement and aggregates, ready-mix, pipe, block and brick from facilities
concentrated primarily in Texas, Louisiana, and California with several products
marketed throughout the U.S.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine-month period ended February 28,
1998, are not necessarily indicative of the results that may be expected for the
year ended May 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended May 31, 1997.
Estimates: The preparation of financial statements and accompanying notes
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported. Actual
results could differ from those estimates.
Principles of Consolidation: The consolidated financial statements include
the accounts of the Company and all subsidiaries. The minority interest
represents the separate public ownership of Chaparral which was acquired by the
Company on December 31, 1997. Certain amounts in the prior period financial
statements have been reclassified to conform to the current period presentation.
Property, Plant and Equipment: Property, plant and equipment is recorded at
cost. Provisions for depreciation are computed generally using the straight-line
method. Provisions for depletion of mineral deposits are computed on the basis
of the estimated quantity of recoverable raw materials.
Cash Equivalents: For cash flow purposes, temporary investments which have
maturities of less than 90 days when purchased are considered cash equivalents.
Earnings Per Share: Effective February 28, 1998, the Company adopted
Statement of Financial Accounting Standards No. 128 "Earnings per Share" (SFAS
128). SFAS 128 prescribes new calculations for Basic and Diluted Earnings Per
Share (EPS) which replaces the former calculations for Primary and Fully Diluted
EPS and requires the restatement of prior period EPS data.
Basic EPS is computed by adjusting net income for the amortization of
additional goodwill in connection with a contingent payment for the acquisition
of Chaparral, then dividing by the weighted average number of common shares
outstanding during the period including contingently issuable shares. Diluted
EPS also adjusts the outstanding shares for the dilutive effect of stock options
and awards.
F-17
<PAGE> 114
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
Basic and Diluted EPS are calculated as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
FEBRUARY 28, FEBRUARY 28,
------------------ ------------------
1998 1997 1998 1997
------- ------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE)
<S> <C> <C> <C> <C>
Earnings:
Net income........................................ $18,628 $10,126 $66,787 $47,913
Contingent price amortization..................... 58 58 174 174
------- ------- ------- -------
$18,686 $10,184 $66,961 $48,087
======= ======= ======= =======
Shares:
Weighted average shares outstanding............... 21,034 21,337 20,969 21,923
Contingently issuable shares...................... 101 81 97 89
------- ------- ------- -------
21,135 21,418 21,066 22,012
Stock option and award dilution................... 777 368 651 445
------- ------- ------- -------
21,912 21,786 21,717 22,457
======= ======= ======= =======
Basic earnings per share............................ $ .88 $ .48 $ 3.18 $ 2.18
======= ======= ======= =======
Diluted earnings per share.......................... $ .85 $ .47 $ 3.08 $ 2.14
======= ======= ======= =======
</TABLE>
Intangible Assets: Goodwill and other intangibles is presented net of
accumulated amortization of $20.8 million at February 28, 1998 and $17.9 million
at May 31, 1997. Goodwill resulting from the acquisitions of Chaparral Steel
Company and Riverside Cement Company, totalling $148.8 million at February 28,
1998 and $57.2 million at May 31, 1997 (net of accumulated amortization) are
being amortized currently on a straight-line basis over 40-year periods. Other
intangibles consisting primarily of goodwill and non-compete agreements are
being amortized on a straight-line basis over periods of 2 to 15 years.
Management reviews remaining goodwill and other intangibles with consideration
toward recovery through future operating results (undiscounted) at the current
rates of amortization.
Income Taxes: Accounting for income taxes uses the liability method of
recognizing and classifying deferred income taxes. The Company joins in filing a
consolidated return with its subsidiaries. Current and deferred tax expense is
allocated among the members of the group based on a stand-alone calculation of
the tax of the individual member.
WORKING CAPITAL
Working capital totaled $221.5 million at February 28, 1998, compared to
$243.0 million at May 31, 1997.
Notes and accounts receivable of $152.1 million at February, compared with
$122.8 million at May, are presented net of allowances for doubtful receivables
of $7.2 million at February and $2.5 million at May.
Inventories are stated at cost (not in excess of market) generally using
the last-in, first-out method (LIFO). If the average cost method (which
approximates current replacement cost) had been used, inventory values would
have been higher by $12.7 million at February and $11.7 million at May.
F-18
<PAGE> 115
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
Inventories are summarized as follows:
<TABLE>
<CAPTION>
FEBRUARY MAY
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Finished products........................................... $ 61,739 $ 77,021
Work in process............................................. 35,739 27,162
Raw materials and supplies.................................. 69,093 62,963
-------- --------
$166,571 $167,146
======== ========
</TABLE>
LONG-TERM DEBT
Long-term debt is comprised of the following:
<TABLE>
<CAPTION>
FEBRUARY MAY
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Bank obligations, maturing through 2002, interest rate 6.03%
(.4% over LIBOR).......................................... $ 38,000 $ 40,000
Senior notes due through 2017, interest rates average
7.28%..................................................... 200,000 --
Senior notes due through 2008, interest rates average
7.28%..................................................... 75,000 75,000
Senior notes due through 2004, interest rates average
10.2%..................................................... 56,000 --
Senior notes due through 1999, interest rate 14.2%.......... 4,091 --
Pollution control bonds, due through 2007, interest rate
6.38% (75% of prime)...................................... 7,595 7,935
Replaced Chaparral debt..................................... -- 64,182
Other, maturing through 2005, interest rates from 8% to
10%....................................................... 2,148 2,391
-------- --------
382,834 189,508
Less current maturities..................................... 13,430 13,452
-------- --------
$369,404 $176,056
======== ========
</TABLE>
Annual maturities of long-term debt for each of the five succeeding years
are $13.4, $9.1, $8.9, $8.9 and $46.7 million.
The Company has available a bank-financed $350 million long-term revolving
credit facility. In addition to the $38.0 million currently outstanding under
this facility, $9.4 million has been utilized to support letters of credit.
Commitment fees at a current annual rate of .125% are paid on the unused portion
of this facility.
On December 31, 1997, Chaparral's senior and first mortgage notes, which
restricted dividends and advances to its shareholders including the parent
company were replaced with senior notes of the Company having the same interest
rate and maturities as the Chaparral notes but with the same loan covenants as
the Company's other senior notes.
Loan agreements contain covenants which provide for minimum working
capital, restrictions on purchases of treasury stock and payment of dividends on
common stock, and limitations on incurring certain indebtedness and making
certain investments. Under the most restrictive of these agreements, the
aggregate amount of annual cash dividends on common stock is limited based on
the ratio of earnings before interest, taxes, depreciation and amortization to
fixed charges. The Company is in compliance with all loan covenant restrictions.
The amount of interest paid for the nine-month periods presented was $12.3
million in 1998 and $12.2 million in 1997. Interest capitalized totaled $2.1
million in the 1998 period.
F-19
<PAGE> 116
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
SHAREHOLDERS' EQUITY
Common stock consists of:
<TABLE>
<CAPTION>
FEBRUARY MAY
-------- ------
(IN THOUSANDS)
<S> <C> <C>
Shares authorized........................................... 40,000 40,000
Shares outstanding at end of period......................... 21,088 20,896
Weighted average shares outstanding assuming dilution....... 21,717 22,163
Shares held in treasury..................................... 3,979 4,171
Shares reserved for stock options and other................. 3,979 2,163
</TABLE>
There are authorized 100,000 shares of Cumulative Preferred Stock, no par
value, of which 20,000 shares are designated $5 Cumulative Preferred Stock
(Voting), redeemable at $105 per share and entitled to $100 per share upon
dissolution. On March 29, 1996, the Company redeemed and retired all outstanding
shares of such $5 Cumulative Preferred Stock. An additional 25,000 shares are
designated Series B Junior Participating Preferred Stock. The Series B Preferred
Stock is not redeemable and ranks, with respect to the payment of dividends and
the distribution of assets, junior to (i) all other series of the Preferred
Stock unless the terms of any other series shall provide otherwise and (ii) the
$5 Cumulative Preferred Stock. Pursuant to a Rights Agreement, in November 1996,
the Company distributed a dividend of one preferred share purchase right for
each outstanding share of the Company's Common Stock. Each right entitles the
holder to purchase from the Company one two-thousandth of a share of the Series
B Junior Participating Preferred Stock at a price of $122.50 per one
two-thousandth share of Series B Preferred Stock, subject to adjustment. The
rights will expire on November 1, 2006 unless the date is extended or the rights
are earlier redeemed or exchanged by the Company pursuant to the Rights
Agreement.
STOCK OPTION PLANS
The Company's stock option plans provide that non-qualified and incentive
stock options to purchase Common Stock may be granted to directors, officers and
key employees at market prices at date of grant. Generally, options become
exercisable in installments beginning one or two years after date of grant and
expire six or ten years later depending on the initial date of grant. A summary
of option transactions for the nine-month period ended February 28, 1998,
follows:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE
SHARES UNDER OPTION OPTION PRICE
------------------- ----------------
<S> <C> <C>
Outstanding at June 1............................ 1,797,131 $21.62
Granted........................................ 365,550 46.27
Exercised...................................... (195,454) 15.15
Canceled....................................... (44,040) 21.35
--------------- -----------
Outstanding at February 28....................... 1,923,187 $26.97
=============== ===========
</TABLE>
At February 28, 1998, there were 536,437 shares exercisable and 1,918,530
shares available for future grants. Outstanding options expire on various dates
to January 14, 2008.
INCOME TAXES
Federal income taxes for the interim periods ended February 28, 1998 and
1997, have been included in the accompanying financial statements on the basis
of an estimated annual rate. The estimated annualized tax rate is 33.1% for 1998
compared with 33.9% for 1997. The primary reason that these respective tax rates
differ from the 35% statutory corporate rate is due to goodwill expense which is
not tax deductible, percentage depletion which is tax deductible and the net
state income tax expense. The Company made income tax
F-20
<PAGE> 117
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
payments of $37.2 million and $30.8 million in the nine-month periods ended
February 28, 1998 and 1997, respectively.
LEGAL PROCEEDINGS AND CONTINGENT LIABILITIES
The Company is subject to federal, state and local environmental laws and
regulations concerning, among other matters, air emissions, furnace dust
disposal and wastewater discharge. The Company believes it is in substantial
compliance with applicable environmental laws and regulations. Notwithstanding
such compliance, if damage to persons or property or contamination of the
environment has been or is caused by the conduct of the Company's business or by
hazardous substances or wastes used in, generated or disposed of by the Company,
the Company may be held liable for such damages and be required to pay the cost
of investigation and remediation of such contamination. The amount of such
liability could be material. Changes in federal or state laws, regulations or
requirements or discovery of unknown conditions could require additional
expenditures by the Company.
The Company and subsidiaries are defendants in lawsuits which arose in the
normal course of business. In management's judgment (based on the opinion of
counsel) the ultimate liability, if any, from such legal proceedings will not
have a material effect on the consolidated financial position of the Company.
ACQUISITIONS
On December 31, 1997, the Company acquired the 15.7% separate public
ownership of Chaparral Steel Company. Pursuant to the merger agreement, the
owners of the approximately 4.5 million publicly traded shares received cash
consideration of $15.50 per share. As of February 28, 1998, $72.0 million of the
estimated $77.1 million total acquisition cost including transaction expenses
had been paid. The excess of the acquisition costs over the fair value of the
net assets acquired, approximately $34.9 million, was recorded as goodwill and
is being amortized over a 40-year period.
Effective December 31, 1997, the Company acquired Riverside Cement Company
for an estimated $115.4 million in cash and the assumption of certain
liabilities. An initial cash payment of $110.9 million was made on January 15,
1998 with the balance payable within 60 days. The estimated purchase price was
allocated to the net assets acquired based on their estimated fair values. The
fair value of tangible assets acquired and liabilities assumed was $65.8 million
and $9.1 million, respectively. The balance of the purchase price, $58.7
million, was recorded as goodwill and is being amortized over a 40-year period.
Riverside Cement Company owns and operates cement plants in Crestmore and Oro
Grande, California with distribution terminals in the northern and southern
parts of the state. The purchased manufacturing facilities are planned to be
upgraded and expanded with modern technology within existing permit limitations
and limestone reserves. The purchase is expected to increase the Company's
cement capacity by 60%.
F-21
<PAGE> 118
No dealer, salesperson or other individual has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the offering. If given or made, such information or
representation must not be relied upon as having been authorized by the Trust or
any of the Underwriters. This Prospectus does not constitute an offer to sell,
or a solicitation of an offer to buy, the Preferred Securities in any
jurisdiction where, or to any person to whom, it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in the affairs
of the Company or the Trust since the date hereof.
TABLE OF CONTENTS
- ------------------------------------------------------
<TABLE>
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 11
Ratio of Earnings to Fixed Charges.... 18
Accounting Treatment.................. 18
Use of Proceeds....................... 18
Price Range of Common Stock and
Dividends........................... 19
Capitalization........................ 20
Selected Consolidated Financial
Data................................ 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 22
Business.............................. 28
Description of the Preferred
Securities.......................... 33
Description of the Preferred
Securities Guarantee................ 44
Description of the Convertible
Subordinated Debentures............. 47
Effect of Obligations Under the
Convertible Subordinated Debentures
and the Preferred Securities
Guarantee........................... 58
Certain Federal Income Tax
Consequences........................ 59
Certain ERISA Considerations.......... 64
Underwriting.......................... 66
Legal Matters......................... 67
Experts............................... 67
Additional Information................ 68
Incorporation of Certain Documents by
Reference........................... 68
Index to Consolidated Financial
Statements.......................... F-1
</TABLE>
PROSPECTUS June , 1998
TXI Logo
PREFERRED SECURITIES OF
TXI CAPITAL TRUST I
% Shared Preference
Redeemable Securities ("SPuRS")
(Liquidation Preference $50 per Preferred Security)
fully and unconditionally
guaranteed by and convertible
into the common stock of
TEXAS INDUSTRIES, INC.
<PAGE> 119
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Other expenses of all issuances and distributions pursuant to this
Registration Statement to be borne by the Company are estimated* as follows:
<TABLE>
<S> <C>
Registration fee-Securities and Exchange Commission......... $147,500
Blue Sky registration fees and expenses..................... 10,000
Printing costs.............................................. 125,000
Legal fees and expenses..................................... 105,000
Accounting fees and expenses................................ 35,000
Trustees' fees and expenses................................. 25,000
Warrant Agent's fees and expenses........................... 5,000
Transfer Agent and Registrars' fees......................... 5,000
Miscellaneous expenses...................................... 22,500
--------
Total............................................. $480,000
========
</TABLE>
- ---------------
* All of the amounts are estimated, except the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of the State
of Delaware empowers a corporation to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful on the merits or otherwise in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
in the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification provided for by Section 145
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; that indemnification provided for by Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee
II-1
<PAGE> 120
or agent and shall inure to the benefit of such person's heirs, executors and
administrators; and empowers the corporation to purchase and maintain insurance
on behalf of a director or officer of the corporation against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
provides that a certificate of incorporation may contain a provision eliminating
or limiting the personal liability of a director to the corporation or to its
stockholders for monetary damages for breach of fiduciary duty as a director
provided that such provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article Eleventh of the Company's Certificate of Incorporation, as amended,
provides that, to the fullest extent permitted by the Delaware General
Corporation Law, as amended from time to time, no director or former director of
the Company shall be personally liable to the Company or its stockholders for
monetary damages for any breach of fiduciary duty as a director.
In addition, Section 27 of the Company's Bylaws further provides that the
Company shall indemnify its officers, directors, employees and agents to the
fullest extent permitted by law.
Under Section 8 of the Underwriting Agreement filed as Exhibit 1 to this
Registration Statement, the Underwriters have agreed to indemnify, under certain
conditions, the Company, its officers and directors, and persons who control the
Company within the meaning of the Securities Act of 1933, as amended, against
certain liabilities.
The Amended and Restated Trust Agreement of TXI Capital Trust I (the "Trust
Agreement") provides that the Company will indemnify and hold harmless, to the
full extent permitted by law, (i) each trustee, (ii) any affiliate of any
trustee, (iii) any officer, director, shareholder, employee, representative or
agent of any trustee, and (iv) any employee or agent of the Trust or its
affiliates for any loss, damage, liability, tax, penalty, expense or claim
incurred in connection with the creation, operation or termination of the Trust
if he acted in good faith on behalf of the Trust and in a manner he reasonably
believed to be within the scope of authority conferred to him by the Trust
Agreement (except that no such indemnification shall be made in respect of any
loss, damage or claim incurred by him by reason of negligence or willful
misconduct).
II-2
<PAGE> 121
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1. -- Form of Underwriting Agreement between the Company and
the Underwriters.+
2. -- Agreement and Plan of Merger dated as of July 30, 1997
among Chaparral Steel Company, the Company and TXI
Acquisition Inc. (incorporated by reference to Exhibit
(c) of the Company's Schedule 13E-3/A Transaction
Statement dated November 28, 1997).
4.1 -- Certificate of Incorporation of the Company, as amended.*
4.2 -- Bylaws of the Company.*
4.3 -- Form of Rights Agreement dated as of November 1, 1996,
between Texas Industries, Inc. and ChaseMellon
Shareholder Services, L.L.C. (incorporated by reference
to Exhibit (4) of the Company's Form 8-K dated November
1, 1996).
4.4 -- Trust Agreement, dated as of May 26, 1998, among Texas
Industries, Inc., First Chicago Delaware Inc., Kenneth R.
Allen, Larry L. Clark and James R. McCraw.+
4.5 -- Form of Amended and Restated Trust Agreement, dated as of
, 1998, among Texas Industries, Inc.,
The First National Bank of Chicago, First Chicago
Delaware Inc., Kenneth R. Allen, Larry L. Clark and James
R. McCraw.+
4.6 -- Form of Convertible Subordinated Debenture Indenture,
dated as of , 1998 between Texas
Industries, Inc. and First Chicago Delaware Inc.+
4.7 -- Form of Guarantee Agreement, dated as of
, 1998, by Texas Industries, Inc. and First Chicago
Delaware Inc.+
4.8 -- Form of Senior Indenture.+
4.9 -- Form of Subordinated Indenture.+
4.10 -- Form of Warrant Agreements.+
5. -- Form of Opinion of Morris, Nichols, Arsht & Tunnell.+
10.1 -- $350,000,000 Second Amended and Restated Credit Agreement
among Texas Industries, Inc., Certain Lenders, Certain
Co-Agents and NationsBank of Texas, N.A., as
Administrative Lender dated December 18, 1997
(incorporated by reference to Exhibit 10.2 of the
Company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1998).
10.2 -- Texas Industries, Inc. $80,000,000 7.15% Senior Notes,
Series A, due April 15, 2006; $40,000,000 7.20% Senior
Notes, Series B, due April 15, 2007; $10,000,000 7.28%
Senior Notes, Series C, due April 15, 2009; $45,000,000
7.395% Senior Notes, Series D, due April 15, 2012;
$25,000,000 7.59% Senior Notes, Series E, due April 15,
2017 note agreement dated as of December 18, 1997
(incorporated by reference to Exhibit 10.3 of the
Company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1998).
12. -- Statement Regarding Computation of Ratios.+
15. -- Letter Re: Unaudited Interim Financial Information.+
</TABLE>
II-3
<PAGE> 122
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.1 -- Consent of Ernst & Young LLP.+
23.2 -- Consent of Locke Purnell Rain Harrell (A Professional
Corporation).*
23.3 -- Consent of Morris, Nichols, Arsht & Tunnell (included in
Exhibit 5).+
24. -- Powers of Attorney (included on signature page).*+
25.1 -- Form T-1 Statement of Eligibility of The First National
Bank of Chicago relating to the Debt Securities and the
Guarantees of Trust Preferred Securities.+
25.2 -- Form T-1 Statement of Eligibility of The First National
Bank of Chicago relating to the Trust Preferred
Securities.+
</TABLE>
- ---------------
* Previously filed.
+ Filed herewith.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act"), may be permitted to directors, officers,
trustees and controlling persons of the Company or the Trust pursuant to the
provisions described under Item 15 above, or otherwise, the Company and the
Trust have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company and the Trust of
expenses incurred or paid by a director, officer, trustee or controlling person
of the Company and the Trust in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, trustee or controlling person
in connection with the securities being registered, the Company 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 them is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The Company and the Trustee hereby undertake that, for purposes of
determining any liability under the Act, each filing of The Company'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 the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
II-4
<PAGE> 123
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Company and the Trustee hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company'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 the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The Trust hereby undertakes to provide to the underwriter at the
closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, trustees and controlling
persons of the Company or the Trust pursuant to the provisions described under
Item 15 above, or otherwise, the Company and the Trust have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Company and the Trust of expenses incurred or paid by a
director, officer, trustee or controlling person of the Company and the Trust in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer, trustee or controlling person in connection with the
securities being registered, the Company and the Trust 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 them is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(e) That, for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(f) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(g) The Company and the Trust hereby undertake to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act ("Act") in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
II-5
<PAGE> 124
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on May 27, 1998.
TEXAS INDUSTRIES, INC.
By: /s/ ROBERT D. ROGERS*
----------------------------------
Robert D. Rogers
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GERALD R. HEFFERNAN* Chairman of the Board May 27, 1998
- -----------------------------------------------------
Gerald R. Heffernan
/s/ ROBERT D. ROGERS* President and Chief Executive May 27, 1998
- ----------------------------------------------------- Officer
Robert D. Rogers
/s/ RICHARD M. FOWLER* Vice President and Chief Financial May 27, 1998
- ----------------------------------------------------- Officer
Richard M. Fowler
/s/ GORDON E. FORWARD* President of Chaparral Steel May 27, 1998
- ----------------------------------------------------- Company and Director
Gordon E. Forward
/s/ ROBERT ALPERT* Director May 27, 1998
- -----------------------------------------------------
Robert Alpert
/s/ JOHN M. BELK* Director May 27, 1998
- -----------------------------------------------------
John M. Belk
/s/ RICHARD I. GALLAND* Director May 27, 1998
- -----------------------------------------------------
Richard I. Galland
/s/ JAMES M. HOAK* Director May 27, 1998
- -----------------------------------------------------
James M. Hoak
Director May , 1998
- -----------------------------------------------------
Eugenio Clariond Reyes
/s/ IAN WACHTMEISTER* Director May 27, 1998
- -----------------------------------------------------
Ian Wachtmeister
/s/ ELIZABETH C. WILLIAMS* Director May 27, 1998
- -----------------------------------------------------
Elizabeth C. Williams
*By: /s/ RICHARD M. FOWLER May 27, 1998
------------------------------------------------
Richard M. Fowler
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 125
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Trust
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on May 27, 1998.
TXI CAPITAL TRUST I
By: /s/ KENNETH R. ALLEN
----------------------------------
Kenneth R. Allen,
Administrative Trustee
By: /s/ LARRY L. CLARK
----------------------------------
Larry L. Clark,
Administrative Trustee
By: /s/ JAMES R. MCCRAW
----------------------------------
James R. McCraw,
Administrative Trustee
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Kenneth R. Allen, and James R. McCraw, and
each of them, such individual's true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for such individual and in
his or her name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and any registration statement related to the offering contemplated by this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, and to file the same, with all exhibits
hereto, and all documents in connection therewith, with the Securities and
Exchange Commission and any state or other securities authority, 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 and to intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their 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 by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ KENNETH R. ALLEN Administrative Trustee May 27, 1998
- -----------------------------------------------------
Kenneth R. Allen
/s/ LARRY L. CLARK Administrative Trustee May 27, 1998
- -----------------------------------------------------
Larry L. Clark
/s/ JAMES R. MCCRAW Administrative Trustee May 27, 1998
- -----------------------------------------------------
James R. McCraw
</TABLE>
II-7
<PAGE> 126
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1. -- Form of Underwriting Agreement between the Company and
the Underwriters.+
2. -- Agreement and Plan of Merger dated as of July 30, 1997
among Chaparral Steel Company, the Company and TXI
Acquisition Inc. (incorporated by reference to Exhibit
(c) of the Company's Schedule 13E-3/A Transaction
Statement dated November 28, 1997).
4.1 -- Certificate of Incorporation of the Company, as amended.*
4.2 -- Bylaws of the Company.*
4.3 -- Form of Rights Agreement dated as of November 1, 1996,
between Texas Industries, Inc. and ChaseMellon
Shareholder Services, L.L.C. (incorporated by reference
to Exhibit (4) of the Company's Form 8-K dated November
1, 1996).
4.4 -- Trust Agreement, dated as of May 26, 1998, among Texas
Industries, Inc., First Chicago Delaware Inc., Kenneth R.
Allen, Larry L. Clark and James R. McCraw.+
4.5 -- Form of Amended and Restated Trust Agreement, dated as of
, 1998, among Texas Industries, Inc.,
The First National Bank of Chicago, First Chicago
Delaware Inc., Kenneth R. Allen, Larry L. Clark and James
R. McCraw.+
4.6 -- Form of Convertible Subordinated Debenture Indenture,
dated as of , 1998 between Texas
Industries, Inc. and First Chicago Delaware Inc.+
4.7 -- Form of Guarantee Agreement, dated as of
, 1998, by Texas Industries, Inc. and First Chicago
Delaware Inc.+
4.8 -- Form of Senior Indenture.+
4.9 -- Form of Subordinated Indenture.+
4.10 -- Form of Warrant Agreements.+
5. -- Form of Opinion of Morris, Nichols, Arsht & Tunnell.+
10.1 -- $350,000,000 Second Amended and Restated Credit Agreement
among Texas Industries, Inc., Certain Lenders, Certain
Co-Agents and NationsBank of Texas, N.A., as
Administrative Lender dated December 18, 1997
(incorporated by reference to Exhibit 10.2 of the
Company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1998).
10.2 -- Texas Industries, Inc. $80,000,000 7.15% Senior Notes,
Series A, due April 15, 2006; $40,000,000 7.20% Senior
Notes, Series B, due April 15, 2007; $10,000,000 7.28%
Senior Notes, Series C, due April 15, 2009; $45,000,000
7.395% Senior Notes, Series D, due April 15, 2012;
$25,000,000 7.59% Senior Notes, Series E, due April 15,
2017 note agreement dated as of December 18, 1997
(incorporated by reference to Exhibit 10.3 of the
Company's Quarterly Report on Form 10-Q for the quarter
ended February 28, 1998).
12. -- Statement Regarding Computation of Ratios.+
15. -- Letter Re: Unaudited Interim Financial Information.+
</TABLE>
<PAGE> 127
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
23.1 -- Consent of Ernst & Young LLP.+
23.2 -- Consent of Locke Purnell Rain Harrell (A Professional
Corporation).*
23.3 -- Consent of Morris, Nichols, Arsht & Tunnell (included in
Exhibit 5).+
24. -- Powers of Attorney (included on signature page).*+
25.1 -- Form T-1 Statement of Eligibility of The First National
Bank of Chicago relating to the Debt Securities and the
Guarantees of Trust Preferred Securities.+
25.2 -- Form T-1 Statement of Eligibility of The First National
Bank of Chicago relating to the Trust Preferred
Securities.+
</TABLE>
- ---------------
* Previously filed.
+ Filed herewith.
<PAGE> 1
EXHIBIT 1
TXI CAPITAL TRUST I
___% Share Preference Unit Redeemable Securities ("SPURS")
(Liquidation Preference $50 per Security)
fully and unconditionally guaranteed by
and convertible into the Common Stock of
TEXAS INDUSTRIES, INC.
UNDERWRITING AGREEMENT
___________, 1998
<PAGE> 2
UNDERWRITING AGREEMENT
__________, 1998
SBC Warburg Dillon Read Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
c/o SBC Warburg Dillon Read Inc.
535 Madison Avenue
New York, New York 10022
as Managing Underwriters
Dear Sirs:
TXI Capital Trust I (the "Trust"), a statutory business trust
created under the Business Trust Act of the State of Delaware (the "Delaware
Act") proposes to issue and sell to you and the other underwriters, if any,
named in Schedule A (the "Underwriters"), for whom you are acting as Managing
Underwriters (the "Managing Underwriters"), an aggregate of ___________ shares
(the "Firm Securities") of its ____% Share Preference Unit Redeemable
Securities (the "Preferred Securities"). In addition, solely for the purpose
of covering overallotments, the Trust proposes to issue and sell, at the
Underwriters' option, up to _________ additional shares of the Preferred
Securities (the "Additional Securities"). The Additional Securities and the
Firm Securities are collectively referred to as the "Securities". The
Securities are described in the Prospectus which is referred to below. If you
are the only Underwriters, all references herein to the Managing Underwriters
shall be deemed to be references to the Underwriters.
The Preferred Securities represent preferred beneficial
ownership interests in the Trust. Pursuant to the Preferred Securities
Guarantee Agreement (the "Guarantee Agreement") to be entered into by Texas
Industries, Inc. ("TXI"), a Delaware corporation, and ____________________ as
Preferred Guarantee Trustee (the "Preferred Guarantee Trustee") for the benefit
of the holders from time to time of the Preferred Securities, the Preferred
Securities will be guaranteed (the "Guarantees") by TXI with respect to
distributions and amounts
<PAGE> 3
payable upon liquidation or redemption. TXI will be the owner of all of the
common beneficial ownership interests in the Trust, which will be represented
by the common securities (the "Common Securities") of the Trust.
Proceeds from the sale of the Preferred Securities to the
Underwriters, and from the concurrent sale of the Common Securities to TXI,
will be used to purchase $___________ aggregate principal amount of TXI's ____%
Convertible Subordinated Debentures due 2028 (the "Debentures"). The
Debentures will be issued by TXI pursuant to an Indenture (the "Indenture") to
be entered into between TXI and _______________, as Trustee (the "Indenture
Trustee"). In view of the fact that TXI will be the owner of all of the Common
Securities and that the proceeds from the sale of the Preferred Securities will
be used to purchase the Debentures from TXI, TXI has agreed to enter into this
Agreement and to make the representations and warranties to the Underwriters
herein set forth, and to indemnify the Underwriters and hold them harmless and
to contribute to certain amounts payable by the Underwriters, as provided
herein, and to pay the expenses of the Trust relating to the offering of the
Preferred Securities contemplated by the Registration Statement and the
Prospectus (as hereinafter defined).
The Preferred Securities and the Common Securities
(collectively referred to as the "Trust Securities") may be exchanged at the
option of the holder for a principal amount of Debentures equal to the
liquidation amount of the Trust Securities so being exchanged. This Agreement,
the Indenture, the Debentures, the Trust Agreement (as defined in Section 3(h))
and the Guarantee Agreement are referred to collectively as the "Operative
Documents". Copies of the Operative Documents, in substantially final form,
have been delivered to each of the Underwriters.
The Trust and TXI have filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively called the "Act"), with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3,
including a prospectus, relating to the Securities, the Debentures, the
Guarantees and the shares (the "Conversion Shares") of common stock, par value
$1.00 per share (the "Common Stock"), of TXI issuable upon conversion of the
Debentures. Such registration statement incorporates by reference documents
that TXI has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively called the "Exchange Act"). TXI and the Trust have
furnished to you, for use by the Underwriters and by dealers,
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<PAGE> 4
copies of one or more preliminary prospectuses and all documents incorporated
by reference therein (each such preliminary prospectus, including the documents
incorporated therein by reference, is called a "Preliminary Prospectus")
relating to the Securities. Except where the context otherwise requires, the
registration statement as in effect at the time of execution of this Agreement
or, if the registration statement is not yet effective, as amended when it
becomes effective, including all documents filed as a part thereof or
incorporated by reference therein, and including any registration statement
filed pursuant to Rule 462(b) under the Act increasing the size of the offering
registered under the Act and any information contained in a prospectus
subsequently filed with the Commission pursuant to Rule 424(b) under the Act
and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is herein called the
"Registration Statement", and the prospectus, including all documents
incorporated therein by reference, in the form filed by the Trust and TXI with
the Commission pursuant to Rule 424(b) under the Act or, if no such filing is
required, in the form of final prospectus included in the Registration
Statement at the time it became effective, is herein called the "Prospectus".
The Trust, TXI and the Underwriters agree as follows:
1. Sale and Purchase. On the basis of the
representations and warranties and the other terms and conditions herein set
forth, the Trust agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Trust the
number of Firm Securities set forth opposite the name of such Underwriter on
Schedule A, at a purchase price of ____% of the liquidation amount thereof,
plus accrued distributions, if any, from ___________, 1998 to the time of
purchase (as hereinafter defined). You may release the Firm Securities for
public sale promptly after this Agreement becomes effective. You may from time
to time increase or decrease the public offering price after the initial public
offering to such extent as you may determine.
In addition, on the basis of the representations and
warranties and the other terms and conditions herein set forth, the Trust
hereby grants to the several Underwriters an option to purchase, and the
Underwriters shall have the right to purchase, severally and not jointly, from
the Trust all or a portion of the Additional Securities as may be necessary to
cover overallotments made in connection with the offering of the Firm
Securities, at the same purchase price per share to be paid by the several
Underwriters to the Trust for the Firm Securities. This option may be
exercised in whole or in part from time to time on or
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<PAGE> 5
before the thirtieth day following the date hereof, by written notice to the
Trust. Any such notice shall set forth the aggregate number of Additional
Securities as to which the option is being exercised, and the date and time
when the Additional Securities are to be delivered (any such date and time
being herein referred to as an "additional time of purchase"); provided,
however, that no additional time of purchase shall occur earlier than the time
of purchase (as defined below) nor earlier than the second business day* after
the date on which the option shall have been exercised nor later than the
eighth business day after the date on which the option shall have been
exercised. The number of Additional Securities to be sold to each Underwriter
at an additional time of purchase shall be the number which bears the same
proportion to the aggregate number of Additional Securities being purchased at
such additional time of purchase as the number of Firm Securities set forth
opposite the name of such Underwriter on Schedule A bears to the total number
of Firm Securities (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares).
2. Payment and Delivery. Payment of the purchase price for the
Firm Securities shall be made to the Trust by wire transfer, in immediately
available funds, against delivery of the certificates for the Firm Securities
to you for the respective accounts of the Underwriters, at the office of SBC
Warburg Dillon Read Inc. in New York City. Such payment and delivery shall be
made at 9:30 A.M., New York City time, on ________________, 1998 (unless
another date not later than ________________, 1998 shall be agreed to by you
and the Trust or unless postponed in accordance with the provisions of Section
8). The time at which such payment and delivery are actually made is called
the "time of purchase". Certificates for the Firm Securities shall be
delivered to you in definitive form in such names and in such denominations as
you shall specify on the second business day preceding the time of purchase.
For the purpose of expediting the checking of the certificates for the Firm
Securities by you, the Trust agrees to make such certificates available to you
for such purpose at least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Securities
shall be made at the additional time of purchase in the same manner as the
payment for the Firm Securities.
- ---------------
* As used herein, "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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<PAGE> 6
Certificates for the Additional Securities shall be delivered to you in
definitive form in such names and in such denominations as you shall specify on
the second business day preceding the additional time of purchase. For the
purpose of expediting the checking of the certificates for the Additional
Securities by you, the Trust agrees to make such certificates available to you
for such purpose at least one full business day preceding the additional time
of purchase.
3. Representations and Warranties of the Trust and TXI.
The Trust and TXI, jointly and severally, represent and warrant to each of the
Underwriters that:
(a) Each Preliminary Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the Act; when the Registration
Statement becomes or became effective and at all times subsequent
thereto up to the time of purchase and the additional time of
purchase, the Registration Statement and the Prospectus, and any
supplements or amendments thereto, complied and will comply in all
material respects with the provisions of the Act; and the Registration
Statement at all such times did not and 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 not
misleading, and the Prospectus at all such times did not and 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; provided, however, that neither the Trust
nor TXI makes any representation or warranty with respect to any
statement contained in the Registration Statement or the Prospectus in
reliance upon and in conformity with information concerning the
Underwriters and furnished in writing by or on behalf of any
Underwriter through you to the Trust expressly for use in the
Registration Statement or the Prospectus and set forth in the section
of the Registration Statement and the Prospectus entitled
"Underwriting"; the documents incorporated by reference in the
Prospectus, at the time they were filed with the Commission, complied
in all material respects with the requirements of the Exchange Act,
and do 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.
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<PAGE> 7
(b) As of the date of this Agreement, TXI has an
authorized consolidated capitalization as set forth under the column
entitled "February 28,1998 Actual" in the section of the Registration
Statement and the Prospectus entitled "Capitalization" and, as of the
time of purchase, the authorized consolidated capitalization of TXI
will be as set forth under the column entitled "February 28, 1998 As
Adjusted" in the section of the Registration Statement and the
Prospectus entitled "Capitalization"; all of the issued and
outstanding shares of capital stock of TXI have been duly authorized
and validly issued and are fully paid and nonassessable and are free
of statutory and contractual preemptive rights.
(c) As of the date of this Agreement, the Trust has an
authorized capitalization of (A) ____________ Common Securities, none
of which are issued or outstanding, and (ii) _____________ Preferred
Securities, none of which are issued or outstanding. As of the time
of purchase, the authorized consolidated capitalization of the Trust
will be (A) ____________ Common Securities, all of which will be
issued or outstanding and owned by TXI, and (ii) ___________ Preferred
Securities, all of which are issued and outstanding.
(d) TXI has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware with full power and authority to (i) own its properties and
conduct its business as described in the Registration Statement and
the Prospectus and (ii) execute and deliver this Agreement and the
other Operative Documents and (A) to issue, sell and deliver the
Debentures as contemplated herein and in the Indenture, (B) to issue
the Guarantees as contemplated herein and in the Guarantee Agreement
and (C) to issue the Conversion Shares upon conversion of the
Debentures pursuant to the Indenture.
(e) The Trust has been duly organized and is validly
existing as a business trust in good standing under the Delaware Act
with full power and authority to (i) own its assets and conduct its
business as described in the Registration Statement and the Prospectus
and (ii) execute and deliver this Agreement and the other Operative
Documents and to issue, sell and deliver the Common Securities and the
Preferred Securities as contemplated herein and in the Trust
Agreement. All filings required under the laws of the State of
Delaware with respect to the valid existence of the Trust as a
business trust have been made. Prior to the date
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<PAGE> 8
hereof, the Trust has conducted no business, and will conduct no
business other than the transactions contemplated by this Agreement
and as contemplated by the Registration Statement and the Prospectus.
(f) All of the issued and outstanding shares of capital
stock of each of the subsidiaries of TXI and all of the outstanding
partnership interests of each partnership operated by TXI
(collectively referred to as the "Subsidiaries") are owned directly or
indirectly by TXI; all of such shares have been duly authorized and
validly issued and are fully paid and (except for general partnership
interests and beneficial interests in trusts) nonassessable and,
except as described in the Prospectus, are owned free and clear of any
pledge, lien, encumbrance, security interest or other claim; there are
no outstanding rights, subscriptions, warrants, calls, preemptive
rights, options or other agreements of any kind with respect to the
capital stock of any of the Subsidiaries. For purposes of this
Section 3(f) and the definition of "Subsidiaries", the Trust will not
be deemed to be a Subsidiary.
(g) Each of the Subsidiaries has been duly formed and is
validly existing as a corporation, partnership or trust, as the case
may be, in good standing under the laws of its respective jurisdiction
of incorporation or organization, with full power and authority to own
its respective properties and to conduct its respective businesses.
(h) Each of TXI and each of the Subsidiaries is duly
qualified or licensed by and is in good standing in each jurisdiction
in which it owns or leases property or conducts its business and in
each other jurisdiction in which the failure, individually or in the
aggregate, to be so qualified or licensed could have a material
adverse effect on the properties, assets, operations, business,
business prospects or condition (financial or other) of TXI and the
Subsidiaries taken as a whole; each of TXI and each of the
Subsidiaries is in compliance in all material respects with the laws,
orders, rules, regulations and directives applicable to TXI or any of
its Subsidiaries issued or administered by each such jurisdiction.
The Trust is not required to be qualified or licensed by or in good
standing in, any jurisdiction other than the State of Delaware.
(i) Neither TXI nor any of the Subsidiaries is in breach
of, or in default under (nor has any event occurred which with notice,
lapse of time or both would constitute a breach of, or default under),
its charter or bylaws, or in
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<PAGE> 9
the performance or observance of any obligation, agreement, covenant
or condition contained in any license, indenture, lease, mortgage,
deed of trust, bank loan or credit agreement, material supply
agreement or other agreement or instrument to which TXI or any of the
Subsidiaries is a party or by which any of them may be bound or
affected, except for such breach or default as would not have a
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of TXI
and the Subsidiaries taken as a whole. The execution, delivery and
performance of this Agreement and the other Operative Documents, the
issuance and sale of the Securities and the Debentures and the
application of the net proceeds thereof as described in the
Prospectus, the issuance of the Guarantees, the issuance of the
Conversion Shares upon conversion of the Debentures and the
consummation of the transactions contemplated hereby and by the other
Operative Documents will not conflict with, or result in any breach of
or constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), the charter or bylaws of TXI or any of the Subsidiaries or
under any provision of any license, indenture, lease, mortgage, deed
of trust, bank loan or credit agreement, material supply agreement or
other agreement or instrument to which TXI or any of the Subsidiaries
is a party or by which any of them or their properties may be bound or
affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to TXI
or any of the Subsidiaries.
(j) The Trust is not a party to or bound by any license,
indenture, lease, mortgage, deed of trust, bank loan or credit
agreement, material supply agreement or other agreement or instrument
other than this Agreement. The Trust has no liabilities or
obligations other than those arising out of the transactions described
in the Registration Statement and the Prospectus and the agreements
and instruments contemplated by the Trust Agreement and described in
the Registration Statement and the Prospectus. The Trust is not a
party to or subject to any action, suit or proceeding of any nature.
The Trust is not in breach of, or in default under (nor has any event
occurred which with notice, lapse of time or both would constitute a
breach of, or default under), the Amended and Restated Trust Agreement
(the "Trust Agreement") among TXI,____________ , as Property Trustee
(the "Property Trustee"), First Chicago Delaware Inc., as Delaware
Trustee (the "Delaware Trustee") and the Administrative Trustees named
therein (the "Administrative
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<PAGE> 10
Trustees"). The execution, delivery and performance of this Agreement
and the other Operative Documents, the issuance and sale of the
Securities, the application of the net proceeds thereof as described
in the Prospectus and the consummation of the transactions
contemplated hereby and by the other Operative Documents will not
conflict with, or result in any breach of or constitute a default
under (nor constitute any event which with notice, lapse of time or
both would constitute a breach of, or default under), the Trust
Agreement or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Trust.
(k) The Firm Securities and the Additional Securities,
when issued and delivered to and paid for by the Underwriters as
contemplated hereby, will be duly authorized and validly issued and
fully paid and nonassessable, free and clear of any pledge, lien,
encumbrance, security interest, preemptive right or other claim. The
Debentures, when issued and delivered to and paid for by the Trust as
contemplated by the Operative Documents, will have been duly
authorized and validly issued and will constitute legal, valid and
binding obligations of TXI entitled to the benefits of the Indenture
and enforceable against TXI in accordance with their terms, except as
the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally and general principles of
equity. The Conversion Shares issuable upon conversion of the
Debentures have been duly authorized and validly reserved for issuance
upon conversion of the Debentures and, when issued upon conversion of
the Debentures as contemplated by the Indenture, will have been
validly issued and will be fully paid and nonassessable, free and
clear of any pledge, lien, encumbrance, security interest, preemptive
right or other claim. The Guarantees, when issued by TXI as
contemplated by the Operative Documents, will have been duly
authorized and validly issued and will constitute legal, valid and
binding obligations of TXI enforceable against TXI in accordance with
their terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally and
general principles of equity.
(l) This Agreement has been duly authorized, executed and
delivered by the Trust and TXI.
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<PAGE> 11
(m) The Trust Agreement has been duly authorized by TXI
and, when executed and delivered by TXI, the Property Trustee, the
Delaware Trustee and the Administrative Trustees, will constitute the
legal, valid and binding obligation of TXI enforceable against TXI in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity. Each of the
Administrative Trustees is an employee of TXI and has been duly
authorized by TXI to serve in such capacity and to execute and deliver
the Trust Agreement.
(n) The Indenture has been duly authorized by TXI and,
when executed and delivered by TXI and the Indenture Trustee, will
constitute the legal, valid and binding obligation of TXI enforceable
against TXI in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally and general principles of equity.
(o) The Guarantee Agreement has been duly authorized by
TXI and, when executed and delivered by TXI, will constitute the
legal, valid and binding obligation of TXI enforceable against TXI in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity.
(p) The Securities, the Debentures, the Guarantees and
the capital stock of TXI conforms in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus. The certificates for the Securities and the Debentures
are in due and proper form, and the holders of the Securities after
making payment therefor will not be subject to personal liability by
reason of being such holders.
(q) The Trust Agreement, the Indenture and the Guarantee
Agreement conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(r) No approval, authorization, consent or order of or
filing with any federal, state, local or foreign
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<PAGE> 12
governmental or regulatory commission, board, body, authority or
agency is required in connection with the issuance and sale of the
Securities or the Debentures, the issuance of the Guarantees or the
issuance of the Conversion Shares upon conversion of the Debentures as
contemplated hereby and by the other Operative Documents, other than
registration of the Securities and the Debentures under the Act,
qualification of the Trust Agreement and the Guarantee Agreement as
indentures under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act'), clearance of the offering of the Securities
with the National Association of Securities Dealers, Inc. (the "NASD")
and any necessary qualification under the securities or blue sky laws
of the various jurisdictions in which the Securities are being offered
by the Underwriters.
(s) No person has the right, contractual or otherwise, to
cause the Trust or TXI to issue to it, or register pursuant to the
Act, any securities of the Trust or TXI in consequence of the issue
and sale of the Securities to the Underwriters hereunder or the
issuance of the Debentures to the Trust.
(t) Ernst & Young LLP, whose reports on the consolidated
financial statements of TXI and the Subsidiaries are included or
incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants with respect to the
Trust and TXI as required by the Act and the applicable published
rules and regulations thereunder.
(u) All legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required.
(v) There is no action, suit or proceeding pending or
threatened against TXI or any of the Subsidiaries or any of their
properties, at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency that could result in a judgment, decree or order
having a material adverse effect on the properties, assets,
operations, business, business prospects or condition (financial or
other) of TXI and the Subsidiaries taken as a whole.
(x) The audited and unaudited financial statements
included in the Registration Statement and the Prospectus
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present fairly the consolidated financial condition of TXI and the
Subsidiaries as of the dates indicated and the consolidated results of
operations and cash flows of TXI and the Subsidiaries for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis during the periods involved.
(y) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
and except as may be otherwise stated in the Registration Statement or
the Prospectus, there has not been: (i) any material adverse change
in the properties, assets, operations, business, business prospects or
condition (financial or other), present or prospective, of TXI and the
Subsidiaries taken as a whole or of the Trust; (ii) any transaction,
that is material to TXI and the Subsidiaries taken as a whole or the
Trust, contemplated or entered into by TXI or any of the Subsidiaries
or the Trust; or (iii) any obligation, contingent or otherwise,
directly or indirectly incurred by TXI or any of the Subsidiaries or
the Trust that is material to TXI and the Subsidiaries taken as a
whole or the Trust.
(z) TXI has obtained the agreement of the shareholders
listed on Schedule B not to offer, sell, contract to sell, transfer or
otherwise encumber or dispose of, directly or indirectly, any shares
of Common Stock, or securities convertible into or exchangeable for
Common Stock, for a period of 90 days from the date of the Prospectus
without the prior written consent of SBC Warburg Dillon Read Inc.
(aa) Neither TXI nor any of the Subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or
state wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations
promulgated thereunder, which in each case might result in any
material adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other) of TXI
and the Subsidiaries taken as a whole.
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<PAGE> 14
(bb) TXI and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including without limitation under any
applicable Environmental Laws, as are necessary to own, lease and
operate its respective properties and to conduct its business; TXI and
each of the Subsidiaries has fulfilled and performed all of its
material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except
as described in the Prospectus, such permits contain no restrictions
that are materially burdensome to TXI's or any of the Subsidiaries'
ability to operate their business in the manner described in the
Prospectus.
(cc) In the ordinary course of its business, TXI conducts
a periodic review of the effect of Environmental Laws on the business,
operations and properties of TXI and the Subsidiaries, in the course
of which it identifies and evaluates associated costs and liabilities
(including without limitation any capital or operating expenditure
required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, TXI reasonably has
concluded that such associated costs and liabilities, singly or in the
aggregate, would not have a material adverse effect on the properties,
assets, operations, business, business prospects or condition
(financial or other) of TXI and the Subsidiaries taken as a whole.
(dd) Neither TXI nor any of the Subsidiaries, nor any
employee of TXI or any of the Subsidiaries, has made any payment of
funds of TXI or any of the Subsidiaries prohibited by law, and no
funds of TXI or any of the Subsidiaries have been set aside to be used
for any payment prohibited by law.
(ee) TXI and the Subsidiaries have filed all federal or
state income or franchise tax returns required to be filed and have
paid all taxes shown thereon as due, and there is no material tax
deficiency which has been or might be asserted against TXI or any of
the Subsidiaries; all material tax liabilities are adequately provided
for on the books of TXI and the Subsidiaries.
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(ff) TXI and the Subsidiaries have good title to all
properties and assets owned or leased by them, in each case free and
clear of all liens, security interests, pledges, charges,
encumbrances, mortgages and defects (except such as are described or
referred to in the Prospectus and the financial statements and the
notes thereto contained therein or such as do not interfere with the
use made and proposed to be made of such property by TXI and the
Subsidiaries).
(gg) None of the Trust, TXI or any of the Subsidiaries is
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, or is subject to regulation under such Act.
4. Certain Covenants of the Trust and TXI. The Trust
and TXI hereby agree as follows:
(a) The Trust and TXI will furnish such information as
may be required and otherwise will cooperate in qualifying the
Securities, the Debentures, the Guarantees and the Conversion Shares
for offering and sale under the securities or blue sky laws of such
states as you may designate and will maintain such qualifications in
effect as long as required for the distribution of the Securities, the
Debentures, the Guarantees and the Conversion Shares, provided that
neither the Trust nor TXI will be required to qualify as a foreign
corporation or trust or to consent to the service of process under the
laws of any such state (except service of process with respect to the
offering and sale of the Securities, the Debentures, the Guarantees
and the Conversion Shares). The Trust and TXI promptly will advise
you of the receipt by the Trust or TXI of any notification with
respect to the suspension of the qualification of the Securities, the
Debentures, the Guarantees or the Conversion Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose, and will use their best efforts to obtain the withdrawal
of any order of suspension at the earliest practicable moment.
(b) The Trust and TXI will make available to you in New
York City, as soon as practicable after the Registration Statement
becomes effective, and thereafter from time to time to furnish to the
Underwriters, as many copies of the Prospectus (or of the Prospectus
as amended or supplemented if the Trust or TXI shall have made any
amendment or supplement thereto after the effective date of the
Registration Statement) as the Underwriters may request for the
purposes contemplated by the Act.
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(c) The Trust and TXI will advise you promptly and if
requested by you will confirm such advice in writing, (i) when the
Registration Statement has become effective and when any
post-effective amendment thereto becomes effective and (ii) when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act, if required under the Act (which the Trust and TXI agree to
file in a timely manner under such Rule).
(d) The Trust and TXI will advise you promptly,
confirming such advice in writing, of any request by the Commission
for amendments or supplements to the Registration Statement or the
Prospectus or for additional information with respect thereto, or of
notice of institution of proceedings for or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of
the Registration Statement, will use their best efforts to obtain the
lifting or removal of such order as soon as possible. The Trust and
TXI will advise you promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus, including by filing any
document that would be incorporated therein by reference, and will
file no such amendment or supplement to which you shall object in
writing.
(e) The Trust and TXI will furnish to you for a period of
three years from the date of this Agreement (i) copies of all reports
or other communications that the Trust or TXI shall send to their
respective securityholders or from time to time shall publish or
publicly disseminate and (ii) copies of all annual, quarterly and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar form as may be designated by the Commission, and
any other document filed by the Trust or TXI pursuant to Section 12,
13, 14 or 15(d) of the Exchange Act.
(f) The Trust and TXI will advise the Underwriters
promptly of the happening of any event known to the Trust or TXI
within the time during which a prospectus relating to the Securities,
the Debentures, the Guarantees or the Conversion Shares is required to
be delivered under the Act that, in the reasonable judgment of the
Trust or TXI, would require the making of any change in the Prospectus
then being used, or in the information incorporated therein by
reference, so that the Prospectus, as then supplemented, would not
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under
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<PAGE> 17
which they are made, not misleading and, during such time, promptly
will prepare and furnish, at TXI's expense, to the Underwriters such
amendments or supplements to such Prospectus as may be necessary to
reflect any such change in such quantities as requested by the
Underwriters, and to furnish to you a copy of such proposed amendment
or supplement before filing any such amendment or supplement with the
Commission.
(g) The Trust and TXI will make generally available to
their respective securityholders, and will deliver to you, an earnings
statement of TXI (which need not be audited and which will satisfy the
provisions of Section 11(a) of the Act including, at the option of
TXI, Rule 158) covering a period of 12 months beginning after the
effective date of the Registration Statement but ending not later than
15 months after the date of the Registration Statement, as soon as is
reasonably practicable after the termination of such 12-month period.
(h) The Trust and TXI will furnish to you four signed
copies of the Registration Statement, as initially filed with the
Commission, and of all amendments thereto (including all exhibits
thereto and documents incorporated by reference therein) and
sufficient conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters.
(i) The Trust and TXI will furnish to you as early as
practicable prior to the time of purchase and the additional time of
purchase, as the case may be, but not later than two business days
prior thereto, a copy of the latest available unaudited interim
consolidated financial statements, if any, of TXI and the Subsidiaries
that have been read by TXI's independent certified public accountants
as stated in their letter to be furnished pursuant to Section 6(b).
(j) The Trust and TXI will apply the net proceeds from
the sale of the Securities and the Debentures in the manner set forth
under the caption "Use of Proceeds" in the Registration Statement and
the Prospectus.
(k) The Trust and TXI will use their best efforts to
cause the Securities to be included in the New York Stock Exchange.
(l) Whether or not the transactions contemplated in this
Agreement and the other Operative Documents are consummated or this
Agreement otherwise becomes effective or
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<PAGE> 18
is terminated, TXI will pay all expenses, fees and taxes (other than
(x) any transfer taxes and (y) fees and disbursements of your counsel
except as set forth under Section 5 and clauses (iii) and (iv) below)
in connection with (i) the preparation and filing of the Registration
Statement, each Preliminary Prospectus, the Prospectus and any
amendment or supplement thereto, and the printing and furnishing of
copies of each thereof to you and to dealers (including costs of
mailing and shipment), (ii) the issuance, sale and delivery of the
Securities, the Debentures, the Guarantees and the Conversion Shares,
(iii) the word processing or printing of this Agreement, the other
Operative Documents and any dealer agreements, and the reproduction or
printing and furnishing of copies of each thereof to you and to
dealers (including costs of mailing and shipment), (iv) the
qualification of the Securities, the Debentures, the Guarantees and
the Conversion Shares or offering and sale under state laws as
aforesaid (including legal fees and filing fees and other
disbursements of your counsel) and the printing and furnishing of
copies of any blue sky surveys to you and to dealers, (v) any listing
of the Securities on any securities exchange or qualification of the
Securities for inclusion in the New York Stock Exchange and any
registration of the Securities, the Debentures, the Guarantees and the
Conversion Shares under the Exchange Act, (vi) any filing for review
of the public offering of the Securities by the NASD, (vii) any fees
payable to rating agencies with respect to the Trust Securities or the
Debentures and (viii) the performance of the Trust's and TXI's other
obligations hereunder.
(m) TXI will not sell, contract to sell, transfer or
otherwise encumber or dispose of, directly or indirectly, any shares
of Common Stock or securities convertible into or exchangeable for
Common Stock or permit the registration under the Act of any shares of
Common Stock, except for the registration of the Securities and the
sale of the Debentures pursuant to this Agreement and the Indenture
for a period commencing on the date hereof and continuing for 90 days
after the date of the Prospectus, without the prior written consent of
SBC Warburg Dillon Read Inc., except for (i) issuance of shares of
Common Stock upon the exercise of outstanding options, (ii) grant of
options to purchase Common Stock pursuant to TXI's existing employee
stock option plans and (iii) issuance of shares of Common Stock in a
private transaction in connection with the acquisition by TXI of a
business or assets so long as the recipient of such shares of Common
Stock agrees to comply with the provisions of this Section 4(m).
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<PAGE> 19
(n) The Trust and TXI will refrain from investing the
proceeds from the sale of the Securities in a manner that would cause
the Trust or TXI or any of the Subsidiaries to become an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(o) TXI will take all such action as may be required, so
long as any of the Debentures remain outstanding, to maintain a
sufficient number of authorized shares of Common Stock reserved for
issuance upon conversion of such debentures.
5. Reimbursement of Underwriters' Expenses. If the Firm
Securities or the Additional Securities are not delivered pursuant to this
Agreement for any reason, other than the failure of the Underwriters to
purchase the Firm Securities or the Additional Securities as provided herein
(unless such failure is permitted under the provisions of Section 6 or Section
7(b) of this Agreement), TXI will reimburse the Underwriters for all of their
out-of-pocket expenses, including the fees and disbursements of their counsel.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Trust and TXI on the date
hereof and at the time of purchase (and the several obligations of the
Underwriters at any additional time of purchase are subject to the accuracy of
the representations and warranties on the part of the Trust and TXI on the date
hereof and at the time of purchase and at such additional time of purchase, as
the case may be), the performance by the Trust and TXI of their obligations
hereunder and to the following conditions:
(a) The Trust and TXI shall furnish to you at the time of
purchase and at such additional time of purchase, as the case may be,
an opinion of Locke Purnell Rain Harrell (A Professional Corporation),
counsel for the Trust and TXI, addressed to the Underwriters and dated
the time of purchase or such additional time of purchase, as the case
may be, with reproduced copies for each of the other Underwriters and
in form and scope satisfactory to Gibson, Dunn & Crutcher LLP, counsel
for the Underwriters, stating that:
(i) TXI has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, with full corporate power and authority
(A) to own its properties and conduct its business as
described in
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<PAGE> 20
the Registration Statement and the Prospectus and (B) to execute and
deliver this Agreement and the other Operative Documents and (A) to
issue, sell and deliver the Debentures as contemplated herein and in
the Indenture, (B) to issue the Guarantees as contemplated herein and
in the Guarantee Agreement and (C) to issue the Conversion Shares upon
conversion of the Debentures pursuant to the Indenture;
(ii) each of ________, _________ and _______ (the
"Material Subsidiaries") has been duly formed and is validly existing
as a corporation, partnership or trust, as the case may be, in good
standing under the laws of the state in which such Material Subsidiary
is incorporated or organized, with full power and authority to own its
properties and to conduct its business as described in the
Registration Statement and the Prospectus;
(iii) all of the issued and outstanding shares of capital
stock of each Material Subsidiary have been duly authorized and
validly issued and are fully paid and (except for general partnership
interests and beneficial interests in trusts) nonassessable and,
except as set forth in the Prospectus, are owned, directly or
indirectly, by TXI, to the knowledge of such counsel, free and clear
of any pledge, lien, encumbrance, security interest, preemptive right
or other claim, and to the knowledge of such counsel there are no
rights, warrants, options or other agreements to acquire or
instruments convertible into or exchangeable for any shares of capital
stock or other equity interest of any Material Subsidiary, except as
set forth in the Prospectus;
(iv) this Agreement has been duly authorized, executed and
delivered by the Trust and TXI;
(v) (a) the Securities, when issued and delivered to and
paid for by the Underwriters, will be duly authorized, validly issued,
fully paid and nonassessable, and will be free of any pledge, lien,
encumbrance, claim or preemptive right; and (b) the certificates for
the Securities are in due and proper form and the holders of the
Securities will not be subject to personal liability by reason of
being such holders; the Debentures, when issued and delivered to and
paid for by the Trust as contemplated by the Operative Documents, will
have been duly authorized
19
<PAGE> 21
and validly issued and will constitute legal, valid and binding
obligations of TXI entitled to the benefits of the Indenture and
enforceable against TXI in accordance with their terms, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally and general principles of
equity; the Conversion Shares issuable upon conversion of the
Debentures have been duly authorized and validly reserved for issuance
upon conversion of the Debentures and, when issued upon conversion of
the Debentures as contemplated by the Indenture, will have been
validly issued and will be fully paid and nonassessable, free and
clear of any pledge, lien, encumbrance, security interest, preemptive
right or other claim; the Guarantees, when issued by TXI as
contemplated by the Operative Documents, will have been duly
authorized and validly issued and will constitute legal, valid and
binding obligations of TXI enforceable against TXI in accordance with
their terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally and
general principles of equity.
(vi) the outstanding shares of capital stock of TXI have
been duly authorized and validly issued and are fully paid,
nonassessable and free of statutory and, to the knowledge of such
counsel, contractual preemptive rights;
(vii) the Securities, the Debentures, the Guarantees and
the capital stock of TXI conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus;
(viii) the Indenture has been duly authorized by TXI and,
when executed and delivered by TXI and the Indenture Trustee, will
constitute the legal, valid and binding obligation of TXI enforceable
against TXI in accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally and general principles of equity;
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<PAGE> 22
(ix) the Guarantee Agreement has been duly authorized by
TXI and, when executed and delivered by TXI, will constitute the
legal, valid and binding obligation of TXI enforceable against TXI in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity;
(x) the Trust Agreement has been duly authorized by TXI
and, when executed and delivered by TXI, the Property Trustee, the
Delaware Trustee and the Administrative Trustees, will constitute the
legal, valid and binding obligation of TXI enforceable against TXI in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and general principles of equity;
(xi) the Trust Agreement, the Indenture and the Guarantee
Agreement conform in all material respects to the descriptions thereof
contained in the Registration Statement and the Prospectus;
(xii) the Registration Statement and the Prospectus (except
as to the financial statements and schedules and financial and
statistical data contained or incorporated by reference therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act;
(xiii) the Registration Statement has become effective under
the Act and, to the best of such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened under the
Act;
(xiv) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency is required in
connection with the issuance or sale of the Securities or the
Debentures, the issuance of the Guarantees or the issuance of the
Conversion Shares upon conversion of the Debentures as contemplated
hereby and by the other
21
<PAGE> 23
Operative Documents, other than registration of the Securities and the
Debentures under the Act, qualification of the Trust Agreement and the
Guarantee Agreement as indentures under the Trust Indenture Act under
the Act (except such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky laws of
the various jurisdictions in which the Securities are being offered by
the Underwriters, the clearance of the offering with the NASD or any
foreign securities laws);
(xv) the execution, delivery and performance of this
Agreement and the other Operative Documents by TXI, the issuance and
sale of the Debentures and the application of the net proceeds thereof
as described in the Prospectus, the issuance of the Guarantees, the
issuance of the Conversion Shares upon conversion of the Debentures
and the consummation of the transactions contemplated hereby and by
the other Operative Documents do not and will not conflict with, or
result in any breach of, or constitute a default under (nor constitute
any event which with notice, lapse of time or both would constitute a
breach of or default under), the charter or bylaws of TXI or any of
the Subsidiaries, or any provision of any license, indenture, lease,
mortgage, deed of trust, bank loan or credit agreement or other
agreement or instrument to which TXI or any of the Subsidiaries is a
party or by which TXI or any of the Subsidiaries or their properties
are bound or affected, or under any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order applicable to
TXI or any of the Subsidiaries;
(xvi) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Trust, the issuance
and sale of the Securities, the application of the net proceeds
thereof as described in the Prospectus and the consummation of the
transactions contemplated hereby and by the other Operative Documents
do not and will not conflict with, or result in any breach of or
constitute a default under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, or default
under), the Trust Agreement or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order
applicable to the Trust.
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<PAGE> 24
(xvii) the statements in the Registration Statement and the
Prospectus under the captions "Risk Factors -- Status of Certain
Tariffs" and "Impact of Environmental Laws", and in TXI's Quarterly
Report on Form 10-Q for the period ended February 28, 1998 under the
captions "Shareholders' Equity" and "Stock Option Plans", insofar as
they are descriptions of laws, regulations and rules, of legal and
governmental proceedings or of contracts, agreements, leases and other
legal documents, or refer to statements of law or legal conclusions,
have been reviewed by such counsel and are accurate in all material
respects;
(xviii) the statements in the Registration Statement and the
Prospectus under the caption "Certain Federal Income Tax
Consequences", insofar as they are descriptions of provisions of the
Internal Revenue Code and the treasury regulations published
thereunder, have been reviewed by such counsel and are accurate in all
material respects; the Debentures should be treated as debt for
federal income tax purposes; and the Trust will be treated as a
grantor trust for federal income tax purposes;
(xix) none of the Trust, TXI of any of the Subsidiaries is
an "investment company" or a person "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended; and
(xx) nothing has come to the attention of such counsel
that causes them to believe that the Registration Statement or any
amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of
purchase contained an untrue statement of a material fact or omitted
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 (it being understood that such counsel
need express no opinion with respect to the financial statements and
schedules and other financial and statistical data included in the
Registration Statement or Prospectus).
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<PAGE> 25
(b) The Trust and TXI shall furnish to you at the time of
purchase and at such additional time of purchase, as the case may be,
an opinion of Robert C. Moore, Esq., General Counsel of TXI, addressed
to the Underwriters and dated the time of purchase or such additional
time of purchase, as the case may be, with reproduced copies for each
of the other Underwriters and in form satisfactory to Gibson, Dunn &
Crutcher LLP, counsel for the Underwriters, stating that:
(i) each of _________, _______ and ________ (the
"Other Subsidiaries") has been duly formed and is validly
existing as a corporation, partnership or trust, as the case
may be, in good standing under the laws of the state in which
such Other Subsidiary is incorporated or organized, with full
power and authority to own its properties and to conduct its
business as described in the Registration Statement and the
Prospectus;
(ii) each of TXI and each of the Subsidiaries is
duly qualified or licensed to do business by and is in good
standing as a foreign corporation in each jurisdiction in
which it conducts business or owns property and in which the
failure, individually or in the aggregate, to be so licensed
or qualified could have a material adverse effect on the
properties, assets, operations, business, business prospects
or condition (financial or other) of TXI and the Subsidiaries
taken as a whole;
(iii) all of the issued and outstanding shares of
capital stock of each Other Subsidiary have been duly
authorized and validly issued and are fully paid and
nonassessable and, except as set forth in the Prospectus, are
owned, directly or indirectly, by TXI free and clear of any
pledge, lien, encumbrance, security interest, preemptive right
or other claim, and there are no rights, warrants, options or
other agreements to acquire or instruments convertible into or
exchangeable for any shares of capital stock or other equity
interest of any Other Subsidiary, except as set forth in the
Prospectus;
(iv) the Trust Agreement has been duly authorized
by TXI and, when executed and delivered by TXI, the Property
Trustee, the Delaware Trustee and the Administrative Trustees,
will constitute the legal, valid and binding obligation of TXI
enforceable
24
<PAGE> 26
against TXI in accordance with its terms, except as the
enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally and
general principles of equity. Each of the Administrative
Trustees is an employee of TXI and has been duly authorized by
TXI to serve in such capacity and to execute and deliver the
Trust Agreement.
(iv) TXI has an authorized capitalization as set
forth under the heading "Capitalization" in the Registration
Statement and the Prospectus;
(v) to the best of such counsel's knowledge,
neither TXI nor any of the Subsidiaries is in breach of or in
default under (nor has any event occurred which with notice,
lapse of time or both would constitute a breach of or default
under) any license, indenture, lease, mortgage, deed of trust,
bank loan or credit agreement or any other agreement or
instrument to which TXI or any of the Subsidiaries is a party
or by which TXI or any of the Subsidiaries or their properties
are bound or affected or under any law, regulation or rule or
any decree, judgment or order applicable to TXI or any of the
Subsidiaries, except for such matters as could not,
individually or in the aggregate, have a material adverse
effect on the properties, assets, operations, business,
business prospects or condition (financial or other) of TXI
and the Subsidiaries taken as a whole;
(vi) to the best of such counsel's knowledge, after
due inquiry, neither TXI nor any of the Subsidiaries has
violated any Environmental Laws, nor any federal or state law
relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours
laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated
thereunder, which in each case might result in any material
adverse effect on the properties, assets, operations,
business, business prospects or condition (financial or other)
of TXI and the Subsidiaries taken as a whole;
(vii) TXI and each of the Subsidiaries has such
permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits"),
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<PAGE> 27
including without limitation under any applicable
Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct its business in the
manner described in the Prospectus; to the best of such
counsel's knowledge, after due inquiry, TXI and each of the
Subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any
other material impairment of the rights of the holder of any
such permit, subject in each case to such qualification as may
be set forth in the Prospectus; and, except as described in
the Prospectus, such permits contain no restrictions that are
materially burdensome to TXI or any of the Subsidiaries;
(viii) except as described in the Registration
Statement and the Prospectus, there are no actions, suits or
proceedings of which such counsel has knowledge pending or
threatened against TXI or any of the Subsidiaries, or any of
their respective properties, at law or in equity, or before or
by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency that
individually or in the aggregate could result in a judgment,
decree or order having a material adverse effect on the
properties, assets, operations, business, business prospects
or condition (financial or other) of TXI and the Subsidiaries
taken as a whole;
(ix) the documents incorporated by reference in the
Registration Statement and Prospectus, when they were filed
(or, if an amendment with respect to any such document was
filed, when such amendment was filed), complied as to form in
all material respects with the Exchange Act (except as to the
financial statements and schedules and other financial and
statistical data contained or incorporated by reference
therein, as to which such counsel need express no opinion);
and
(x) to the best of such counsel's knowledge, no
person has the right, contractual or otherwise, to cause the
Trust or TXI to issue to it, or register pursuant to the Act,
any securities of the Trust or TXI in consequence of the issue
and sale of the
26
<PAGE> 28
Securities to the Underwriters hereunder or the
issuance of the Debentures to the Trust.
(xi) all contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement have been so described or filed.
(c) The Trust and TXI shall furnish to you at the time
of purchase and at such additional time of purchase, as the case may be,
an opinion of Morris, Nichols, Arsht & Tunnell, special Delaware
counsel for the Trust, addressed to the Underwriters and dated the time
of purchase or such additional time of purchase, as the case may be,
with reproduced copies for each of the other Underwriters and in form
and scope satisfactory to Gibson, Dunn & Crutcher LLP, counsel for the
Underwriters, stating that:
(i) the Trust has an authorized capitalization of
(A) ____________ Common Securities, all of which will be
issued or outstanding and owned by TXI, and (ii) ___________
Preferred Securities, all of which are issued and outstanding;
(ii) the Trust has been duly organized and is
validly existing as a business trust in good standing under
the Delaware Act with full power and authority to (i) own its
assets and conduct its business as described in the
Registration Statement and the Prospectus and (ii) execute and
deliver this Agreement and the other Operative Documents and
to issue, sell and deliver the Common Securities and the
Preferred Securities as contemplated herein and in the Trust
Agreement; all filings required under the laws of the State of
Delaware with respect to the valid existence of the Trust as a
business trust have been made;
(iii) the Securities, when issued and delivered to
and paid for by the Underwriters as contemplated hereby, will
be duly authorized and validly issued and fully paid and
nonassessable, free and clear of any pledge, lien,
encumbrance, security interest, preemptive right or other
claim; the holders of the Trust Securities will be entitled to
the same limitation of personal liability extended to holders
of common stock of private for profit corporations organized
under the General Corporation Law of the State of Delaware;
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<PAGE> 29
(iv) assuming that the Trust derives no income from
or in connection with sources with the State of Delaware and
has no assets, activities (other than maintaining the Delaware
Trustee and the filing of documents with the secretary of
State of the State of Delaware) or employees in the State of
Delaware, the holders of the Trust Securities (other than
those holders domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware
solely as a result of their participation in the Trust, and
the Trust will not be liable for any income tax imposed by the
State of Delaware;
(v) this Agreement has been duly authorized,
executed and delivered by the Trust; and
(vi) the execution, delivery and performance by the
Trust of this Agreement and the other Operative Documents, the
issuance and sale of the Securities, the application of the
net proceeds thereof by the Trust as described in the
Prospectus and the consummation by the Trust of the
transactions contemplated hereby and by the other Operative
Documents will not conflict with, or result in any breach of
or constitute a default under (nor constitute any event which
with notice, lapse of time or both would constitute a breach
of, or default under), the Trust Agreement or under any law,
regulation or rule of the State of Delaware applicable to the
Trust.
(d) You shall have received from Ernst & Young LLP
letters dated, respectively, the date of this Agreement and the time
of purchase and additional time of purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in form and substance satisfactory to you.
(e) You shall have received at the time of purchase and
at the additional time of purchase, as the case may be, opinions from
Gibson, Dunn & Crutcher LLP in form and substance satisfactory to you.
(f) No amendment or supplement to the Registration
Statement or the Prospectus, including documents deemed to be
incorporated by reference therein, shall be filed prior to the time
the Registration Statement becomes effective to which you shall have
objected in writing.
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<PAGE> 30
(g) The Registration Statement shall become effective at
or before 5:00 P.M., New York City time, on the date of this Agreement
and, if Rule 430A under the Act is used, the Prospectus shall have
been filed with the Commission pursuant to Rule 424(b) under the Act
at or before 5:00 P.M., New York City time, on the second full
business day after the date of this Agreement; provided, however, that
the Trust and TXI and you and any group of Underwriters, including
you, who have agreed hereunder to purchase in the aggregate at least
50% of the Firm Securities from time to time may agree in writing or
by telephone, confirmed in writing, on a later date.
(h) Prior to the time of purchase or the additional time
of purchase, as the case may be: (i) no stop order with respect to
the effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto,
or modifications thereof, if any, shall 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 not
misleading; and (iii) the Prospectus and all amendments or supplements
thereto, or modifications thereof, if any, shall 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.
(i) Between the time of execution of this Agreement and
the time of purchase or the additional time of purchase, as the case
may be, there has not been: (i) any material and adverse change,
present or prospective, in the properties, assets, operations,
business, business prospects or condition (financial or other) of TXI
and the Subsidiaries taken as a whole or the Trust, other than as
described in the Registration Statement and the Prospectus; (ii) any
transaction that is material to TXI and the Subsidiaries taken as a
whole or the Trust contemplated or entered into by TXI or any of the
Subsidiaries or the Trust, other than as described in the Registration
Statement and the Prospectus; or (iii) any obligation, contingent or
otherwise, directly or indirectly, incurred by TXI or any of the
Subsidiaries or the Trust that is material to TXI and the Subsidiaries
taken as a whole or the Trust, other than as described in the
Registration Statement, the Prospectus and the documents incorporated
by reference therein.
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<PAGE> 31
(j) TXI, at the time of purchase or additional time of
purchase, as the case may be, will deliver to you a certificate of two
of its executive officers to the effect that the representations and
warranties of TXI and the Trust set forth in this Agreement are true
and correct as of each such date and the conditions set forth in
Section 6(g) and Section 6(h) have been met.
(k) You shall have received a signed letter, dated the
date of this Agreement, from each of the shareholders listed in
Schedule B to the effect that such persons shall not offer, sell,
contract to sell, transfer or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into
or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock for a period of 90 days from the date of the
Prospectus without the prior written consent of SBC Warburg Dillon
Read Inc.
(l) TXI shall have furnished to you such other documents
and certificates as you reasonably may request.
(m) The Trust and TXI shall have performed such of their
obligations under this Agreement as are to be performed by the terms
hereof at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
(n) The Securities shall have been approved for listing
on the New York Stock Exchange subject top official notice of
issuance.
7. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective (i) if Rule
430A under the Act is not used, when you shall have received
notification of the effectiveness of the Registration Statement, or
(ii) if Rule 430A under the Act is used, when the parties hereto have
executed and delivered this Agreement.
(b) The obligations of the several Underwriters hereunder
shall be subject to termination in the absolute discretion of you or
any group of Underwriters (which may include you) which has agreed to
purchase in the aggregate at least 50% of the Firm Securities if, at
any time prior to the time of purchase or, with respect to the
purchase of any Additional Securities, the additional time of
purchase, as the case may be, trading in securities on the New York
Stock
30
<PAGE> 32
Exchange shall have been suspended or minimum prices shall have been
established on the New York Stock Exchange or if a banking moratorium
shall have been declared either by the United States or New York State
authorities, or if the United States shall have declared war in
accordance with its constitutional processes or there shall have
occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis of such magnitude in its
effect on, or any material adverse change in, any U.S. or
international financial market which, in each case, in your judgment
or in the judgment of such group of Underwriters, makes it
impracticable to market the Securities. If you or any group of
Underwriters elect to terminate this Agreement as provided in this
Section 7(b), the Trust, TXI and each other Underwriter shall be
notified promptly by letter or telegram.
(c) If any Underwriter shall default in its obligation to
take up and pay for the Firm Securities to be purchased by it
hereunder and if the number of Firm Securities which all Underwriters
so defaulting shall have agreed but failed to take up and pay for does
not exceed 10% of the total number of Firm Securities, the
non-defaulting Underwriters shall take up and pay for (in addition to
the aggregate principal amount of Firm Securities they are obligated
to purchase pursuant to Section 1) the number of Firm Securities
agreed to be purchased by all such defaulting Underwriters as
hereinafter provided. Such Securities shall be taken up and paid for
by such non-defaulting Underwriter or Underwriters in such amount or
amounts as you may designate with the consent of each Underwriter so
designated or, in the event no such designation is made, such
Securities shall be taken up and paid for by all non-defaulting
Underwriters pro rata in proportion to the aggregate number of Firm
Securities set opposite the names of such non-defaulting Underwriters
in Schedule A.
(d) If any Underwriter shall default in its obligation to
take up and pay for the Firm Securities to be purchased by it
hereunder and if the number of Firm Securities which all Underwriters
so defaulting shall have agreed but failed to take up and pay for
exceeds 10% of the total number of Firm Securities, and arrangements
satisfactory to you, the Trust and TXI are not made within 48 hours
after such default, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter.
31
<PAGE> 33
(e) Without relieving any defaulting Underwriter from its
obligations hereunder, the Trust and TXI agree with the non-defaulting
Underwriters that the Trust will not sell any Firm Securities
hereunder unless all of the Firm Securities are purchased by the
Underwriters (or by substituted underwriters selected by you with the
approval of the Trust and TXI or selected by the Trust and TXI with
your approval pursuant to Section 7(d)). If a new Underwriter or
Underwriters are substituted for a defaulting Underwriter or
Underwriters in accordance with Section 7(d), the Trust and TXI or you
shall have the right to postpone the time of purchase for a period not
exceeding five business days in order that any necessary change in the
Registration Statement and the Prospectus and other documents may be
effected. The term Underwriter as used in this Agreement shall refer
to and include any Underwriter substituted under this Section 7 with
like effect as if such substituted Underwriter had originally been
named in Schedule A.
(f) If the purchase of the Securities by the
Underwriters, as contemplated by this Agreement, is not consummated
for any reason permitted under this Agreement or if such purchase is
not consummated because the Trust and TXI shall be unable to comply
with any of the terms of this Agreement, the Trust and TXI shall not
be under any obligation or liability under this Agreement (except to
the extent provided in Sections 4(l), 5 and 8), and the Underwriters
shall be under no obligation or liability to the Trust or TXI under
this Agreement (except to the extent provided in Section 8).
8. Indemnity by the Trust and TXI and the
Underwriters.
(a) The Trust and TXI, jointly and severally, agree to
indemnify, defend and hold harmless each Underwriter, each person that
controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, and each Underwriter's agents,
employees, officers and directors and the agents, employees, officers
and directors of any such controlling person (collectively, the
"Underwriter indemnified parties") from and against any and all
losses, claims, damages, judgments, liabilities and expenses
(including the fees and expenses of counsel and other expenses in
connection with investigating, defending or settling any such action
or claim) which, jointly or severally, any Underwriter indemnified
party may incur as they are incurred (and regardless of whether such
Underwriter indemnified party is a party to the litigation,
32
<PAGE> 34
if any) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the registration
statement relating to the Securities or the Prospectus or any
Preliminary Prospectus, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, judgments,
liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or alleged untrue statement or omission
based upon and in conformity with information with respect to any
Underwriter furnished in writing by any Underwriter through you to the
Trust and TXI expressly for use therein with reference to such
Underwriter. This indemnity agreement will be in addition to any
liability the Trust or TXI otherwise may have.
(b) If any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
brought or asserted against any Underwriter indemnified party, with
respect to which indemnity may be sought against the Trust or TXI
pursuant to this Section 8, such Underwriter indemnified party shall
promptly notify the Trust and TXI in writing, and the Trust and TXI
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Underwriter indemnified party and
payment of all fees and expenses; provided that the omission so to
notify the Trust or TXI shall not relieve it from any liability that
it may have to any Underwriter indemnified party under this Section 8,
unless the failure to give such notice materially prejudices the
Trust's or TXI's ability to defend such action or proceeding. An
Underwriter indemnified party shall have the right to employ separate
counsel in any such action or proceeding and to assume the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter indemnified party unless (i) the
employment of such counsel has been authorized in writing by the Trust
or TXI, (ii) the Trust or TXI has failed promptly to assume the
defense and employ counsel satisfactory to the Underwriter indemnified
party or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Underwriter
indemnified party and the Trust and TXI and such Underwriter
indemnified party shall have reasonably concluded that there may be
one or more legal defenses available to it that are different from or
additional to those available to the Trust or TXI (in which case
neither the Trust nor TXI shall not have the right to assume the
defense of such action on behalf of such Underwriter
33
<PAGE> 35
indemnified party), in any of which events such fees and expenses
shall be borne by the Trust and TXI and reimbursed as they are
incurred. It is understood, however, that the Trust and TXI shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriter indemnified parties, which firm shall be designated in
writing by SBC Warburg Dillon Read Inc., and that all such fees and
expenses shall be reimbursed as they are incurred. The Trust and TXI
shall not be liable for any settlement of any such action effected
without the written consent of the Trust or TXI (which consent shall
not be unreasonably withheld or delayed), but if settled with the
written consent of the Trust or TXI , or if there is a final judgment
with respect thereto, the Trust and TXI agree to indemnify and hold
harmless each Underwriter indemnified party from and against any loss
or liability by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify,
defend and hold harmless the Trust and TXI, their respective directors
and trustees, their officers who sign the Registration Statement, and
any person that controls the Trust and TXI within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act (collectively,
the "TXI indemnified parties") to the same extent as the foregoing
indemnity from the Trust and TXI to the Underwriter indemnified
parties, but only with respect to information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter
through you to the Trust and TXI expressly for use with respect to
such Underwriter in the Registration Statement, any Preliminary
Prospectus or the Prospectus. In case any action shall be brought
against any TXI indemnified party based on the Registration Statement,
any Preliminary Prospectus or the Prospectus and in respect of which
indemnity may be sought against any Underwriter pursuant to this
Section 8(c), such Underwriter shall have the rights and duties given
to the Trust and TXI by Section 8(b) (except that if the Trust and TXI
shall have assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof, provided that the fees and
expenses of such separate counsel shall be at the expense of such
Underwriter, except as provided in Section 8(b)), and the TXI
indemnified parties shall have the rights
34
<PAGE> 36
and duties given to the Underwriter indemnified parties by Section
8(b).
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless any Underwriter
indemnified party or any TXI indemnified party, then the party
required to indemnify such indemnified party under this Section 8, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages, judgments, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits
received by the Trust and TXI on the one hand and the Underwriters on
the other hand from the offering of the Securities, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
relative fault of the Trust and TXI on the one hand and the
Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Trust and TXI on the one hand
and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by the Trust bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in
the table on the cover page of the Prospectus. The relative fault of
the Trust and TXI on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether
the untrue statement or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Trust or TXI or by the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, claims,
damages, judgments, liabilities and expenses referred to above shall
be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending
any claim or action.
The Trust and TXI and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation or
35
<PAGE> 37
by any other method of allocation (even if the Underwriters were
treated as one entity for such purpose) that does not take account of
the equitable considerations referred to in this Section 8(d).
Notwithstanding the provisions of this Section 8(d), no Underwriter
indemnified party shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities
underwritten by such Underwriter indemnified party and distributed to
the public were offered to the public exceeds the amount of any
damages which such Underwriter indemnified party otherwise has been
required to pay by reason of such untrue statement or alleged untrue
statement or omission or alleged omission. 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. The Underwriters'
obligations to contribute pursuant to this Section 8 are several in
proportion to their respective underwriting commitments and are not
joint.
The statements under the caption "Underwriting" and the legend
on page two in the Prospectus (to the extent such statements relate to
an Underwriter) constitute the only information furnished to the Trust
and TXI in writing by such Underwriter expressly for use in the
Registration Statement, any Preliminary Prospectus or the Prospectus.
(e) The indemnity and contribution agreements contained
in this Section 8 and the representations, warranties and covenants of
the Trust and TXI contained in this Agreement shall remain in full
force and effect, regardless of any investigation made by or on behalf
of any Underwriter indemnified party or by or on behalf of any TXI
indemnified party, and shall survive any termination of this Agreement
or the issuance and delivery of the Securities. Subject to the
provisions of Section 8(b) and Section 8(c), the Trust and TXI and
each Underwriter agree promptly to notify the other of the
commencement of any litigation or proceeding against it in connection
with the issuance and sale of the Securities or in connection with the
Registration Statement or the Prospectus.
9. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered
or sent to SBC Warburg Dillon Read Inc., 535 Madison Avenue, New York, New York
10022, Attention: Syndicate Department; and if to TXI , shall be sufficient in
all respects if delivered or sent to TXI at the
36
<PAGE> 38
offices of TXI at 1341 West Mockingbird Lane, Dallas, Texas 75247-6700,
Attention: Robert C. Moore; and if to the Trust, shall be sufficient in all
respects if delivered or sent to TXI Capital Trust I, c/o Texas Industries,
Inc., 1341 West Mockingbird Lane, Dallas, Texas 75247-6700, Attention:
Administrative Trustees.
10. Construction. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE SECTION HEADINGS IN THIS
AGREEMENT HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE
NOT A PART OF THIS AGREEMENT.
11. Parties at Interest. The Agreement herein set forth
has been and is made solely for the benefit of the Underwriters, the Trust,
TXI, the Underwriter indemnified parties and the TXI indemnified parties, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
12. Counterparts. This Agreement may be signed by the
parties in counterparts which together shall constitute one and the same
agreement among the parties.
37
<PAGE> 39
If the foregoing correctly sets forth the understanding among
the Trust, TXI and the Underwriters, please so indicate in the space provided
below for such purpose, whereupon this letter and your acceptance shall
constitute a binding agreement among the Trust, TXI and the Underwriters,
severally.
Very truly yours,
TEXAS INDUSTRIES, INC.
By:
-------------------------------------
Name:
Title:
TXI CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
TXI CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
TXI CAPITAL TRUST I
By:
-------------------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written,
on behalf of themselves,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated
and the other several
Underwriters named in
Schedule A
SBC WARBURG DILLON READ INC., as
Managing Underwriter
By:
-------------------------------------
Name:
Title:
<PAGE> 40
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Underwriter Firm Securities
- ----------- ---------------
<S> <C>
Dillon, Read & Co. Inc . . . . . . . . . . .
Merrill Lynch, Pierce, Fenner & Smith Incorporated. . .
Morgan Stanley & Co. Incorporated
___________
Total
============
</TABLE>
<PAGE> 41
SCHEDULE B
SHAREHOLDERS WHO HAVE EXECUTED LOCK-UP AGREEMENTS
<PAGE> 1
EXHIBIT 4.4
TRUST AGREEMENT
THIS TRUST AGREEMENT (this "Agreement"), dated as of May 26, 1998, among
(i) Texas Industries, Inc., a Delaware corporation (the "Depositor"), (ii)
First Chicago Delaware Inc., a Delaware corporation, as Delaware trustee (the
"Delaware Trustee"), and (iii) Kenneth R. Allen, Larry L. Clark and James R.
McCraw, each an individual, as trustees (each of such trustees described in
clauses (ii) and (iii), a "Trustee," and collectively, the "Trustees"). The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as TXI CAPITAL
TRUST I, in which name the Trustees, or the Depositor to the extent provided
herein, may engage in the transactions contemplated hereby, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10.00. The Trustees hereby acknowledge receipt of such amount
in trust from the Depositor, which amount shall constitutes the initial trust
estate. It is the intention of the parties hereto that the Trust created hereby
constitute a business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Section 3801, et seq. (the "Business Trust Act"), and that this
document constitutes the governing instrument of the Trust. The Trustees are
hereby authorized and directed to execute and file a certificate of trust with
the Delaware Secretary of State in accordance with the provisions of the
Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities and Common Securities
referred to therein. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Trustees shall not have any duty or obligation
hereunder or with respect to the trust estate, except as otherwise required by
applicable law or as may be necessary to obtain, prior to such execution and
delivery, any licenses, consents or approvals required by applicable law or
otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust: (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to the
registration under the Securities Act of 1933, as amended (the "1933 Act"), of
the Preferred Securities of the Trust (including any registration statement for
the same offering that is to be effective upon filing pursuant to Rule 462(b)
under the 1933 Act), and (b) a Registration Statement on Form 8-A (the "1934
Act Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust under the Securities Exchange Act of 1934, as amended; (ii) to file
with the New York Stock Exchange, Inc. (the "Exchange") and execute on behalf
of the Trust one or more listing applications and all other applications,
statements, certificates, agreements and other instruments as shall be
necessary or
<PAGE> 2
desirable to cause the Preferred Securities to be listed on the Exchange; (iii)
to file and execute on behalf of the Trust, such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process
and other papers and documents as shall be necessary or desirable to register
the Preferred Securities under the securities or blue sky laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary or
desirable; and (iv) to execute on behalf of the Trust an Underwriting Agreement
relating to the Preferred Securities, among the Trust, the Depositor and the
Underwriters named therein, substantially in the form included as an exhibit to
the 1933 Act registration Statement. In the event that any filing referred to
in clauses (i), (ii) and (iii) above is required by the rules and regulations
of the Commission, the Exchange or state securities or blue sky laws, to be
executed on behalf of the Trust by one or more of the Trustees, each of the
trustees, in its, her or his capacity as a Trustee of the Trust, is hereby
authorized and, to the extent so required, directed to join in any such filing
and to execute on behalf of the Trust any such document unless required by the
rules and regulations of the Commission, the Exchange or state securities or
blue sky laws. In connection with the filings referred to above, the Depositor
and First Chicago Delaware Inc., the Delaware Trustee, and Kenneth R. Allen,
Larry L. Clark and James R. McCraw, each as Trustees and not in their
individual capacities, hereby constitutes and appoints Kenneth R. Allen, Larry
L. Clark and James R. McCraw, and each of them, as its true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the Depositor or such Trustee or in the Depositor's or such
Trustees' name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act Registration
Statement and the 1934 Act Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Commission, the Exchange and administrators of he state securities or blue sky
laws, granting unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to be
done in connection therewith, as fully to and all intents and purposes as the
Depositor or such Trustee might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
respective substitute or substitutes, shall do or cause to be done by virtue
hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be four and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by
a written instrument signed by the Depositor which may increase or decrease the
number of Trustees' provided, however that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the state of Delaware and otherwise
meets the requirements of applicable Delaware law. Subject to the foregoing,
the Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon 30 days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
2
<PAGE> 3
8. The Delaware Trustee shall not have any powers or duties of the
Trustees set forth herein, except as required under the Business Trust Act. The
Delaware Trustee shall be a Trustee hereunder for the sole and limited purpose
of fulfilling the requirements of Section 3807 of the Business Trust Act.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
TEXAS INDUSTRIES, INC.
as Depositor
By: /s/ RICHARD M. FOWLER
----------------------------------
Richard M. Fowler
Vice President - Finance
FIRST CHICAGO DELAWARE INC.
as Delaware Trustee
By: /s/ SANDRA L. CARUBA
----------------------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ KENNETH R. ALLEN
--------------------------------------
Kenneth R. Allen, as trustee
/s/ LARRY L. CLARK
--------------------------------------
Larry L. Clark, as trustee
/s/ JAMES R. MCCRAW
--------------------------------------
James R. McCraw, as trustee
3
<PAGE> 1
EXHIBIT 4.5
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
TEXAS INDUSTRIES, INC., AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO
----------------------------------
AS PROPERTY TRUSTEE,
FIRST CHICAGO DELAWARE INC.
AS DELAWARE TRUSTEE,
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN,
AND
THE SEVERAL HOLDERS (AS DEFINED HEREIN)
DATED AS OF ____________, 1998
<PAGE> 2
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- ----------- -------
<S> <C>
(Section) 310 (a)(1)........................................................................ 8.7
(a)(2)........................................................................ 8.7
(a)(3)........................................................................ 8.9
(a)(4)........................................................................ 2.7(a)(ii)
(b)........................................................................... 8.8
(Section) 311 (a)........................................................................... 8.13
(b)........................................................................... 8.13
(Section) 312 (a)........................................................................... 5.7
(b)........................................................................... 5.7
(c)........................................................................... 5.7
(Section) 313 (a)........................................................................... 8.14(a)
(a)(4)........................................................................ 8.14(b)
(b)........................................................................... 8.14(b)
(c)........................................................................... 10.9
(d)........................................................................... 8.14(c)
(Section) 314 (a)........................................................................... 8.15
(b)........................................................................... Not Applicable
(c)(1)........................................................................ 8.16
(c)(2)........................................................................ 8.16
(c)(3)........................................................................ Not Applicable
(d)........................................................................... Not Applicable
(e)........................................................................... 1.1, 8.16
(Section) 315 (a)........................................................................... 8.1(a), 8.3(a)
(b)........................................................................... 8.2, 10.9
(c)........................................................................... 8.1(a)
(d)........................................................................... 8.1, 8.3
(e)........................................................................... Not Applicable
(Section) 316 (a)........................................................................... Not Applicable
(a)(1)(A)..................................................................... Not Applicable
(a)(1)(B)..................................................................... Not Applicable
(a)(2)........................................................................ Not Applicable
(b)........................................................................... 5.14
(c)........................................................................... 6.7
(Section) 317 (a)(1)........................................................................ Not Applicable
(a)(2)........................................................................ Not Applicable
(b)........................................................................... 5.9
(Section) 318 (a)........................................................................... 10.11
</TABLE>
- -------------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINED TERMS..........................................................................................2
Section 1.1 Definitions................................................................................2
ARTICLE II CONTINUATION OF TRUST................................................................................10
Section 2.1 Name......................................................................................10
Section 2.2 Office of Delaware Trustee; Principal Place of Business...................................11
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses...........................11
Section 2.4 Issuance of Preferred Securities..........................................................11
Section 2.5 Issuance of Common Securities; Subscription and Purchase of Debentures..................11
Section 2.6 Declaration of Trust......................................................................12
Section 2.7 Authorization to Enter into Certain Transactions..........................................12
Section 2.8 Assets of Trust...........................................................................16
Section 2.9 Title to Trust Property...................................................................16
ARTICLE III PAYMENT ACCOUNT.....................................................................................16
Section 3.1 Payment Account...........................................................................16
ARTICLE IV DISTRIBUTIONS; REDEMPTION; CONVERSION................................................................17
Section 4.1 Distributions.............................................................................17
Section 4.2 Redemption................................................................................18
Section 4.3 Conversion................................................................................20
Section 4.4 Subordination of Common Securities........................................................23
Section 4.5 Payment Procedures........................................................................23
Section 4.6 Tax Returns and Reports...................................................................24
Section 4.7 Payment of Expenses of Trust..............................................................24
Section 4.8 Payments under Indenture or Pursuant to Direct Actions....................................24
ARTICLE V TRUST SECURITIES CERTIFICATES.........................................................................24
Section 5.1 Initial Ownership.........................................................................24
Section 5.2 Trust Securities Certificates.............................................................24
Section 5.3 Execution and Delivery of Trust Securities Certificates...................................25
Section 5.4 Registration of Transfer and Exchange of Preferred Securities Certificates................25
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates........................26
Section 5.6 Persons Deemed Securityholders............................................................26
Section 5.7 Access to List of Securityholders' Names and Addresses....................................27
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
Section 5.8 Maintenance of Office or Agency..........................................................27
Section 5.9 Appointment of Paying Agent..............................................................27
Section 5.10 Appointment of Conversion Agent..........................................................28
Section 5.11 Ownership of Common Securities by Depositor..............................................28
Section 5.12 Book-Entry Preferred Securities Certificates; Common Securities Certificate..............28
Section 5.13 Notices to Clearing Agency...............................................................29
Section 5.14 Definitive Preferred Securities Certificates.............................................29
Section 5.15 Rights of Securityholders................................................................30
Section 5.16 CUSIP Numbers............................................................................32
ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING............................................................32
Section 6.1 Limitations on Voting Rights.............................................................32
Section 6.2 Notice of Meetings.......................................................................34
Section 6.3 Meetings of Securityholders..............................................................34
Section 6.4 Voting Rights............................................................................34
Section 6.5 Proxies, etc.............................................................................34
Section 6.6 Securityholder Action by Written Consent.................................................35
Section 6.7 Record Date for Voting and Other Purposes................................................35
Section 6.8 Acts of Securityholders..................................................................35
Section 6.9 Inspection of Records....................................................................36
ARTICLE VII REPRESENTATIONS AND WARRANTIES......................................................................36
Section 7.1 Representations and Warranties of Property Trustee and Delaware Trustee..................36
Section 7.2 Representations and Warranties of Depositor..............................................38
ARTICLE VIII TRUSTEES...........................................................................................38
Section 8.1 Certain Duties and Responsibilities......................................................38
Section 8.2 Certain Notices..........................................................................39
Section 8.3 Certain Rights of Property Trustee.......................................................40
Section 8.4 Not Responsible for Recitals or Issuance of Securities...................................42
Section 8.5 May Hold Securities......................................................................42
Section 8.6 Compensation; Indemnity; Fees............................................................42
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees.............................43
Section 8.8 Conflicting Interests....................................................................44
Section 8.9 Co-Trustees and Separate Trustee.........................................................44
Section 8.10 Resignation and Removal; Appointment of Successor........................................45
Section 8.11 Acceptance of Appointment by Successor...................................................47
Section 8.12 Merger, Conversion, Consolidation or Succession to Business..............................47
Section 8.13 Preferential Collection of Claims Against Depositor or Trust.............................47
Section 8.14 Reports by Property Trustee..............................................................48
Section 8.15 Reports to Property Trustee..............................................................48
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
Section 8.16 Evidence of Compliance with Conditions Precedent........................................49
Section 8.17 Number of Trustees......................................................................49
Section 8.18 Delegation of Power.....................................................................49
ARTICLE IX TERMINATION, LIQUIDATION AND MERGER..................................................................50
Section 9.1 Termination Upon Expiration Date........................................................50
Section 9.2 Early Termination.......................................................................50
Section 9.3 Termination.............................................................................50
Section 9.4 Liquidation.............................................................................51
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of Trust.........................52
ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................53
Section 10.1 Limitation of Rights of Securityholders.................................................53
Section 10.2 Liability of Common Securityholder......................................................53
Section 10.3 Amendment...............................................................................53
Section 10.4 Separability............................................................................55
Section 10.5 Governing Law...........................................................................55
Section 10.6 Payments Due on Non-Business Day........................................................55
Section 10.7 Successors..............................................................................55
Section 10.8 Headings................................................................................55
Section 10.9 Reports, Notices and Demands............................................................55
Section 10.10 Agreement Not to Petition...............................................................56
Section 10.11 Trust Indenture Act; Conflict with Trust Indenture Act..................................56
Section 10.12 Acceptance of Terms of Trust Agreement, Guarantee and Indenture.........................57
Section 10.13 Holders are Parties.....................................................................57
Section 10.14 Counterparts............................................................................57
</TABLE>
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<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT (this "Trust Agreement"),
dated as of ___________, 1998, among (i) TEXAS INDUSTRIES, INC., a Delaware
corporation (including any successors or assigns, the "Depositor"), (ii) The
First National Bank of Chicago, as property trustee (in such capacity, the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) First Chicago Delaware Inc.,
as Delaware trustee (the "Delaware Trustee"), (iv) Kenneth R. Allen, an
individual, Larry L. Clark, an individual, and James R. McCraw, an individual,
each of whose address is c/o Texas Industries, Inc., 1341 West Mockingbird
Lane, Dallas, Texas 75247-6913 (each an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees are referred to individually as a
"Trustee" and collectively as the "Trustees") and (v) the several Holders (as
hereinafter defined).
WITNESSETH
WHEREAS, the Depositor, the Delaware Trustee and the Administrative
Trustees have heretofore duly declared and established a business trust pursuant
to the Delaware Business Trust Act by the entering into that certain Trust
Agreement, dated as of May ___, 1998 (the "Original Trust Agreement"), and by
the execution and filing with the Secretary of State of the State of Delaware of
the Certificate of Trust, filed on May ___, 1998, attached as Exhibit A (the
"Certificate of Trust"); and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities (as hereinafter
defined) by the Trust to the Depositor, (ii) the issuance and sale of the
Preferred Securities (as hereinafter defined) by the Trust pursuant to the
Underwriting Agreement (as hereinafter defined) and (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the
Debentures (as hereinafter defined) issued pursuant to the Indenture (as
hereinafter defined).
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders (as hereinafter defined), hereby
amends and restates the Original Trust Agreement in its entirety and agrees as
follows:
<PAGE> 7
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act (as hereinafter defined), either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8(a).
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on a Like Amount of Debentures
for such period.
"Administrative Trustee" means each of the individuals identified as an
"Administrative Trustee" in the preamble to this Trust Agreement, solely in such
individual's capacity as an Administrative Trustee of the Trust and not in such
individual's individual capacity, or such Administrative Trustee's successor in
interest in such capacity, and includes any Special Administrative Trustee (as
hereinafter defined) appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Appointment Event" has the meaning set forth in Section 6.1(d).
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
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<PAGE> 8
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of such Person or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.10.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Depositor to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.12.
"Business Day" means a day other than (i) a Saturday or Sunday and (ii)
a day on which banking institutions in The City of New York or the State of
Delaware are authorized or required by law or executive order to remain closed.
"Certificate Depository Agreement" means the agreement among the Trust,
the Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Preferred Securities Certificates,
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Certificate of Trust" has the meaning specified in the recitals
hereof, as amended from time to time.
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<PAGE> 9
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The Depository Trust
Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means an undivided common beneficial interest in the
assets of the Trust, having a Liquidation Amount of $50 and having the rights
provided therefor in this Trust Agreement, including the right to convert to
shares of the Common Stock and the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Common Stock" means the common stock of the Depositor, par value $1.00
per share.
"Conversion Agent" has the meaning set forth in Section 4.3(d).
"Conversion Date" has the meaning set forth in Section 4.3(b).
"Conversion Price" has the meaning set forth in Section 4.3(a).
"Conversion Request" has the meaning set forth in Section 4.3(b).
"Corporate Trust Office" means (i) when used with respect to the
Property Trustee, the principal office of the Property Trustee located in
Wilmington, Delaware, and (ii) when used with respect to the Indenture Trustee,
the principal office of the Indenture Trustee located in Wilmington, Delaware.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Stated Maturity" means the date specified pursuant to the
terms of the Debentures as the date on which the principal of the Debentures is
due and payable.
"Debenture Tax Event" means a "Tax Event" as defined in the Indenture.
4
<PAGE> 10
"Debentures" means the $_____________ aggregate principal amount (or,
if the overallotment option is exercised pursuant to the Underwriting Agreement,
the $____________ aggregate principal amount ) of the Depositor's ____%
Convertible Subordinated Debentures Due 2028 issued pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as
the context requires) of (i) Preferred Securities Certificates issued as
Book-Entry Preferred Securities Certificates as provided in Section 5.12(a) and
(ii) Preferred Securities Certificates issued in certificated, fully registered
form as provided in Section 5.14.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. 3801, et seq., as it may be amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Direct Action" has the meaning specified in Section 5.15(e).
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Indenture Event of Default; or
(b) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a period
of 30 days; or
(c) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with in clause (b) or (c) above) and continuation of such default or breach for
a period of 90 days after there has been given, by registered or certified mail,
to the defaulting Trustee or Trustees by the Holders of at least 25% in
aggregate
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<PAGE> 11
Liquidation Amount of the Outstanding Preferred Securities, a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property Trustee
within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
"Expiration Date" has the meaning specified in Section 9.1.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and ____________________, as trustee, contemporaneously with the
execution and delivery of this Trust Agreement, for the benefit of the Holders
of the Preferred Securities, as amended from time to time.
"Indenture" means the Indenture, dated as of ______________, 1998
between the Depositor and the Indenture Trustee, as trustee, as amended or
supplemented from time to time.
"Indenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Indenture Trustee" means First Chicago Delaware Inc., a Delaware
corporation, as trustee under the Indenture, and any successor trustee appointed
as provided therein.
"Investment Company Event" means that the Administrative Trustees shall
have received an opinion from independent counsel to the effect that, as a
result of the occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law
becomes effective on or after the date of this Prospectus.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture, the proceeds of which will be used to pay the Redemption Price of
such Trust Securities and (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a dissolution or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $50 per Trust Security.
6
<PAGE> 12
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman,
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary, of
the Depositor, and delivered to the appropriate Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 8.16 shall be the
principal executive, financial or accounting officer of the Depositor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding" means, when used with respect to Trust Securities as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Securities Registrar
or delivered to the Securities Registrar for cancellation;
(b) Trust Securities for whose payment or redemption funds in the
necessary amount theretofore have been deposited with the Property Trustee or
any Paying Agent for the Holders of such Trust Securities; provided that, if
such Trust Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement;
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<PAGE> 13
(c) Trust Securities which have been converted pursuant to Section 4.3;
and
(d) Trust Securities which have been paid or in exchange for or in lieu
of which other Trust Securities have been executed and delivered pursuant to
this Trust Agreement, including pursuant to Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Preferred Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be Outstanding,
except that (a) in determining whether any Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Preferred Securities that such Trustee actually knows to be so
owned shall be so disregarded and (b) the foregoing shall not apply at any time
when all of the Outstanding Preferred Securities are owned by the Depositor, one
or more of the Trustees and/or any such Affiliate. Preferred Securities so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Administrative Trustees the
pledgee's right so to act with respect to such Preferred Securities and that the
pledgee is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the beneficial owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9 and initially shall be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its corporate
trust department for the benefit of the Securityholders in which all amounts
paid in respect of the Debentures will be held and from which the Property
Trustee, through the Paying Agent, shall make payments to the Securityholders in
accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
D.
"Preferred Security" means an undivided preferred beneficial interest
in the assets of the Trust, having a Liquidation Amount of $50 and having the
rights provided therefor in this Trust Agreement, including the right to convert
to shares of the Common Stock and the right to receive Distributions and a
Liquidation Distribution as provided herein.
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<PAGE> 14
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Property Trustee of the Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor property trustee
appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the Debenture Stated
Maturity shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, paid by the Depositor upon the concurrent
redemption of a Like Amount of Debentures, allocated on a pro rata basis (based
on Liquidation Amounts) among the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10(a).
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security is registered in the Securities Register; any such Person shall be a
beneficial owner within the meaning of the Delaware Business Trust Act;
provided, however, that in determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in this
Trust Agreement, then for the purpose of any such determination, so long as
Definitive Preferred Securities Certificates have not been issued, the term
Securityholders or Holders as used herein shall refer to the Owners.
"Special Administrative Trustee" means an Administrative Trustee
appointed by the Holders of the Preferred Securities pursuant to the provisions
of Section 6.1(d).
"Special Event" means an Investment Company Event or a Tax Event.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced proposed change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which proposed
change, pronouncement or decision is announced on or after the date of issuance
of the Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to United States federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or within 90 days after the
date of such Opinion of Counsel, will not be, deductible by the Depositor, in
whole or in part, for United States federal income tax purposes,
9
<PAGE> 15
or (iii) the Trust is, or will be within 90 days after the date of such Opinion
of Counsel, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Trust" means the Delaware business trust created and continued hereby
and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including (i) all exhibits hereto and (ii) for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) any funds on deposit in,
or owing to, the Payment Account and (c) all proceeds and rights in respect of
the foregoing.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trust Security" means any of the Common Securities and the Preferred
Securities.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
____________, 1998, among the Trust, the Depositor and SBC Warburg Dillon Read
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley &
Co. Incorporated, as representatives of the underwriters named therein.
ARTICLE II
CONTINUATION OF TRUST
SECTION 2.1 NAME.
The Trust continued hereby shall be known as "TXI Capital Trust I", as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders and the other Trustees, in which name
the Trustees engage in the transactions contemplated hereby, make and execute
contracts and other instruments on behalf of the Trust and sue and be sued.
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SECTION 2.2 OFFICE OF DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The address of the Delaware Trustee in the State of Delaware is 300
King Street, Wilmington, Delaware 19801, Attention: Corporate Trust Department,
or such other address in the State of Delaware as the Delaware Trustee may
designate by written notice to the Securityholders and the Depositor. The
principal executive office of the Trust is c/o Texas Industries, Inc., 1341 West
Mockingbird Lane, Dallas, Texas 75247-6913.
SECTION 2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES.
The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor will pay organizational
expenses of the Trust as they arise or, upon request of any Trustee, promptly
will reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor will make no claim upon the Trust Property for the payment of such
expenses.
SECTION 2.4 ISSUANCE OF PREFERRED SECURITIES.
(a) As of _____________, 1998, the Depositor, on behalf of the Trust
and pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, will
execute in accordance with Section 5.2 and deliver to the Underwriters named in
the Underwriting Agreement the Preferred Securities Certificates, registered in
the name of the nominee of the initial Clearing Agency, in an aggregate amount
of _____________ Preferred Securities having an aggregate Liquidation Amount of
$_____________, against receipt of an aggregate purchase price of
$_______________ plus accrued Distributions from ____________, 1998, if any.
Such Administrative Trustee promptly will deliver such amount to the Property
Trustee.
(b) In the event the underwriters elect to exercise their overallotment
option pursuant to the Underwriting Agreement, contemporaneously with the
execution and delivery of this Trust Agreement, an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 5.2 and deliver to
the Underwriters named in the Underwriting Agreement Capital Securities
Certificates, registered in the name of the nominee of the initial Clearing
Agency, in an aggregate amount of ____ Preferred Securities having an aggregate
Liquidation Amount of $______, against receipt of an aggregate purchase price of
$_____________ plus accrued distributions from ____________ , 1998, if any. Such
Administrative Trustee promptly will deliver such amount to the Property
Trustee.
SECTION 2.5 ISSUANCE OF COMMON SECURITIES; SUBSCRIPTION AND PURCHASE OF
DEBENTURES.
(a) Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, will execute in
accordance with Section 5.2 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount of
_____________ Common Securities having an aggregate Liquidation
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Amount of $____________ against payment by the Depositor of an aggregate
purchase price of $____________, plus accrued Distributions from ___________,
1998, if any. Such Administrative Trustee promptly will deliver such amount to
the Property Trustee. Contemporaneously therewith, an Administrative Trustee, on
behalf of the Trust, will subscribe to and purchase from the Depositor
Debentures, registered in the name of the Trust and having an aggregate
principal amount equal to $_____________. In satisfaction of the purchase price
for such Debentures, the Property Trustee, on behalf of the Trust, will deliver
to the Depositor the sum of $______________ plus accrued interest, if any, from
__________,1998.
(b) In the event the underwriters elect to exercise their overallotment
option pursuant to the Underwriting Agreement, contemporaneously with the
execution and delivery of this Trust Agreement, an Administrative Trustee, on
behalf of the Trust, will execute in accordance with Section 5.2 and deliver to
the Depositor Common Securities Certificates, registered in the name of the
Depositor, in an aggregate amount of ________ Common Securities having an
aggregate Liquidation Amount of $___________ against payment by the Depositor of
an aggregate purchase price of $_____________, plus accrued distributions from
____________, 1998, if any. Such Administrative Trustee promptly will deliver
such amount to the Property Trustee. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, will subscribe to and purchase
from the Depositor Debentures, registered in the name of the Trust and having an
aggregate principal amount equal to $__________. In satisfaction of the purchase
price for such Debentures, the Property Trustee, on behalf of the Trust, will
deliver to the Depositor the sum of $_____________ (being the sum of the amounts
delivered to the Property Trustee pursuant to (i) the second sentence of Section
2.4(b), and (ii) the first sentence of this Section 2.5(b)).
SECTION 2.6 DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities, (b) to use the proceeds from such sale to acquire the
Debentures and (c) to engage in those activities necessary or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein, and the
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Trust and the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Delaware Business Trust Act.
SECTION 2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth in
Section 2.7(b) and Article VIII and in accordance with the following provisions
(i), (ii) and (iii), the Trustees shall have the authority
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to enter into all transactions and agreements determined by the Trustees to be
appropriate in exercising the authority, express or implied, otherwise granted
to the Trustees under this Trust Agreement, and to perform all acts in
furtherance thereof, including the following:
(i) As among the Trustees, each Administrative Trustee, acting
singly or collectively, shall have the power and authority (except
during any period in which the Holders of the Preferred Securities
shall have appointed a Special Administrative Trustee pursuant to
Section 6.1(d)) to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) causing the Trust to enter into, and executing,
delivering and performing on behalf of the Trust, the
Certificate Depository Agreement and such other agreements as
may be necessary or desirable in connection with the purposes
and function of the Trust;
(C) assisting in the registration of the Preferred
Securities under the Securities Act of 1933, as amended, and
under state securities or blue sky laws, and the qualification
of this Trust Agreement and the Guarantee as trust indentures
under the Trust Indenture Act;
(D) assisting in the listing, if any, of the Preferred
Securities upon the New York Stock Exchange or any other such
national stock exchange or exchanges or the Nasdaq National
Market or any other automated quotation system or systems as
shall be determined by the Depositor and the registration of
the Preferred Securities under the Exchange Act, if required,
and the preparation and filing of all periodic and other
reports and other documents pursuant to the foregoing;
(E) sending notices (other than notices of default) and
other information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Trust Agreement;
(F) appointing a Paying Agent, Conversion Agent and
Securities Registrar in accordance with this Trust Agreement;
(G) registering transfer of the Trust Securities in
accordance with this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust and
executing and filing the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) unless otherwise required by the Delaware Business
Trust Act or the Trust Indenture Act, executing on behalf of
the Trust (either acting alone or
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together with any or all of the Administrative Trustees) any
documents that the Administrative Trustees have the power to
execute pursuant to this Trust Agreement; and
(J) taking any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is
necessary or advisable to give effect to the terms of this
Trust Agreement for the benefit of the Securityholders
(without consideration of the effect of any such action on any
particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) establishing the Payment Account;
(B) receiving and holding the Debentures;
(C) collecting principal of, premium, if any, and interest
on, and any other payments made in respect of, the Debentures
in the Payment Account;
(D) distributing, through the Paying Agent, amounts owed
to the Securityholders in respect of the Trust Securities;
(E) exercising all of the rights, powers and privileges of
a holder of the Debentures;
(F) sending notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(G) distributing the Trust Property in accordance with the
terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement,
winding up the affairs of and liquidating the Trust and the
executing and filing the certificate of cancellation with the
Secretary of State of the State of Delaware; and
(I) except as otherwise provided in this Section
2.7(a)(ii), the Property Trustee shall have none of the
duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 2.7(a)(i).
(iii) At such times as a Special Administrative Trustee shall
have been appointed by the Holders of the Preferred Securities pursuant
to Section 6.1(d), the Special Administrative Trustee shall have the
power and authority to act on behalf of the Trust jointly with the
Administrative Trustees, and the Administrative Trustees and the
Special Administrative Trustee shall act collectively as determined by
a majority.
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(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not: (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement; (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein; (iii) take any action that would cause the
Trust to fail or cease to qualify as a "grantor trust" for United States federal
income tax purposes; (iv) incur any indebtedness for borrowed money or issue any
other debt; (v) take or consent to any action that would result in the creation
of a Lien on any of the Trust Property; (vi) invest any proceeds received by the
Trust from holding the Debentures, but shall distribute all such proceeds to
Holders of Trust Securities pursuant to the terms of this Trust Agreement and of
the Trust Securities; (vii) acquire any assets other than the Trust Property;
(viii) possess any power or otherwise act in such a way as to vary the Trust
Property; (ix) possess any power or otherwise act in such a way as to vary the
terms of the Trust Securities in any way whatsoever (except to the extent
expressly authorized in this Trust Agreement or by the terms of the Trust
Securities); or (x) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Trust
Securities. The Administrative Trustees shall defend all claims and demands of
all Persons at any time claiming any Lien on any of the Trust Property adverse
to the interest of the Trust or the Securityholders in their capacity as
Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the
Commission and the execution on behalf of the Trust of one or more
registration statements on the appropriate form in relation to the
Preferred Securities, including any amendments thereto;
(ii) the determination of the states in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and the determination of any and all such acts,
other than acts that must be taken by or on behalf of the Trust, and
the advice to the Trustees of actions they must take on behalf of the
Trust, and the preparation for execution and filing of any documents to
be executed and filed by the Trust or on behalf of the Trust, as the
Depositor deems necessary or advisable in order to comply with the
applicable laws of any such states;
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to the New York Stock Exchange or
any other national stock exchange or the Nasdaq National Market or any
other automated quotation system for listing upon notice of issuance of
any Preferred Securities and filing with such exchange or
self-regulatory organization such notifications and documents as may be
necessary from time to time to maintain such listing;
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(iv) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the
Preferred Securities; and
(v) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) The Administrative Trustees are authorized and directed to conduct
the affairs of the Trust and to operate the Trust so that the Trust will not be
deemed to be an "investment company" required to be registered under the 1940
Act, or fail to be classified as a grantor trust for United States federal
income tax purposes and so that the Debentures will be treated as indebtedness
of the Depositor for United States federal income tax purposes. In this
connection, the Depositor and the Administrative Trustees are authorized to take
any action, not inconsistent with applicable law, the Certificate of Trust or
this Trust Agreement, that each of the Depositor and any Administrative Trustee
determines in its discretion to be necessary or desirable for such purposes, as
long as such action does not adversely affect in any material respect the
interests of the Holders of the Preferred Securities.
SECTION 2.8 ASSETS OF TRUST.
The assets of the Trust shall consist solely of the Trust Property.
SECTION 2.9 TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee will
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee will have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All funds and other property deposited or held from time to time in the Payment
Account will be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as provided
herein, including (and subject to) any priority of payments provided for herein.
(b) The Property Trustee will deposit in the Payment Account, promptly
upon receipt, all payments of principal of, premium, if any, or interest on, and
any other payments or proceeds with respect to, the Debentures. Amounts held in
the Payment Account will not be invested by the Property Trustee.
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ARTICLE IV
DISTRIBUTIONS; REDEMPTION; CONVERSION
SECTION 4.1 DISTRIBUTIONS.
(a) The Trust Securities represent undivided beneficial ownership
interests in the Trust Property, and distributions (the "Distributions") will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including Additional Interest, as defined in the Indenture) are made
on the Debentures.
Accordingly:
(i) Distributions on the Trust Securities will be cumulative,
and will accumulate whether or not there are funds of the Trust
available for the payment of Distributions. Distributions will accrue
from _____________, 1998, and, except in the event (and to the extent)
that the Depositor exercises its right to defer the payment of interest
on the Debentures pursuant to the Indenture, will be payable quarterly
in arrears on [March 31, June 30, September 30 and December 31] of each
year, commencing on ____________, 1998. If any date on which a
Distribution is otherwise payable on the Trust Securities is not a
Business Day, then the payment of such Distribution will be made on the
next succeeding day that is a Business Day (without any additional
Distributions or other payment in respect of such delay) except that,
if such Business Day is in the next succeeding calendar year, payment
of such Distribution shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date (each date on which Distributions are payable in accordance
with this Section 4.1(a), a "Distribution Date").
(ii) Assuming payments of interest on the Debentures are made
when due (and before giving effect to Additional Amounts, if
applicable), Distributions on the Trust Securities shall be payable at
an annual rate of _____% of the Liquidation Amount of the Trust
Securities, the annual interest rate for the Debentures. The amount of
Distributions payable for any period will be computed (i) for any full
90-day quarterly Distribution period, on the basis of a 360-day year of
twelve 30-day months and (ii) for any period shorter than a full 90-day
quarterly Distribution period for which Distributions are computed, on
the basis of a 30-day month, and for periods of less than a month, the
actual number of days elapsed per 30-day month.
(iii) Distributions on the Trust Securities will be made by
the Property Trustee from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Trust has funds then
on hand and available in the Payment Account for the payment of such
Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be one Business Day prior to such Distribution Date; provided, however,
that in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the 15th day of the month in which the
relevant
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Distribution Date occurs without giving effect to the third sentence of Section
4.1(a)(i) (whether or not such record date is a Business Day).
SECTION 4.2 REDEMPTION.
(a) On each Debenture Redemption Date and on the Debenture Stated
Maturity, the Trust shall be required to redeem a Like Amount of Trust
Securities at the Redemption Price. In addition, in the case of the occurrence
of a Tax Event, if (i) the Depositor has received an opinion (a "Redemption Tax
Opinion") from independent tax counsel experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk that the
Depositor would be precluded from deducting the interest on the Debentures for
United States federal income tax purposes even after the Convertible
Subordinated Debentures were distributed to the holders of Preferred Securities
in liquidation of such holders' interests in the Trust Pursuant to Section 9.4
or (ii) the Administrative Trustees shall have been informed by such tax counsel
that an opinion from independent tax counsel experienced in such matters to the
effect that the holders of the Preferred Securities will not recognize any gain
or loss for United States federal income tax purposes as a result of such
dissolution and distribution of Convertible Subordinated Debentures (a "No
Recognition Opinion") cannot be delivered, the Depositor shall have the right,
upon not less than 30 nor more than 60 days notice, to redeem the Convertible
Subordinated Debentures in whole or in part for cash within 90 days following
the occurrence of such Tax Event, and, following such redemption, Preferred
Securities with an aggregate liquidation amount equal to the aggregate principal
amount of the Convertible Subordinated Debentures so redeemed shall be redeemed
by the Trust at the Redemption Price on a pro rata basis; provided, however,
that, if at the time there is available to the Depositor or the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Trust, the holders of the Preferred Securities or the Depositor, the Trust
will pursue such measure in lieu of redemption.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed;
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(v) that on the Redemption Date the Redemption Price shall become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon shall cease to accrue on and after said date; and
(vi) if the Preferred Securities are no longer in book-entry-only
form, the place and address where the Holders shall surrender their
Preferred Securities Certificates.
(c) The Trust Securities redeemed on each Redemption Date will be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption at Debenture Redemption Date or payment at Debenture Stated Maturity.
Redemptions of the Trust Securities will be made and the Redemption Price will
be payable on each Redemption Date only to the extent that the Trust has funds
then on hand and available in the Payment Account for the payment of such
Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee, so long as the
Preferred Securities are in book-entry-only form, will irrevocably deposit with
the Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and shall give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof.
If the Preferred Securities are no longer in book-entry-only form, the Property
Trustee, subject to Section 4.2(c), will irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and will give the
Paying Agent irrevocable instructions and authority to pay the Redemption Price
to the Holders thereof upon surrender of their Preferred Securities
Certificates. Notwithstanding the foregoing, Distributions payable on or prior
to the Redemption Date for any Trust Securities called for redemption will be
payable to the Holders of such Trust Securities as they appear on the Securities
Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit all rights of
Securityholders holding Trust Securities so called for redemption shall cease,
except (i) the right of such Securityholders to receive the Redemption Price and
any Distribution payable on or prior to the Redemption Date, but without
interest thereon and (ii) the right of the Securityholders to cause the
Conversion Agent to convert the Trust Securities, and such Trust Securities will
cease to be Outstanding. In the event that any date on which any Redemption
Price is payable is not a Business Day, then payment of the Redemption Price
payable on such date shall be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption is
improperly withheld or refused and not paid either by the Trust or by the
Depositor pursuant to the Guarantee, Distributions on such Trust Securities
shall continue to accrue, at the then applicable rate, from the Redemption Date
originally established by the Trust for such Trust Securities to the date such
Redemption Price is actually paid, in which case the actual payment date shall
be the date fixed for redemption for purposes of calculating the Redemption
Price.
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(e) Payment of the Redemption Price on the Trust Securities shall be
made to the recordholders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which shall be one Business
Day prior to the relevant Redemption Date; provided, however, that in the event
that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date 15 days prior to the relevant Redemption
Date.
(f) Subject to Section 4.4(a), if less than all of the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption, by such
method as the Property Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to $50 or an
integral multiple of $50 in excess thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $50. The Property Trustee
shall promptly notify the Security Registrar in writing of the Preferred
Securities selected for redemption and, in the case of any Preferred Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Trust Agreement, unless the context otherwise requires,
all provisions relating to the redemption of Preferred Securities shall relate,
in the case of any Preferred Securities redeemed or to be redeemed only in part,
to the portion of the Liquidation Amount of Preferred Securities that has been
or is to be redeemed.
SECTION 4.3 CONVERSION.
The Securityholders shall have the right at any time prior to 5:00 p.m.
(New York City time) on the Business Day immediately preceding the date of
repayment of such Trust Securities, whether at maturity or upon redemption
(either at the option of the Depositor or pursuant to a Tax Event), at their
option, to cause the Conversion Agent to convert Trust Securities, on behalf of
the converting Holders, into shares of the Common Stock in the manner described
herein on and subject to the following terms and conditions:
(a) The Trust Securities shall be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Trust Securities for a portion of the Debentures theretofore held by the Trust
on the basis of one Security per $50 principal amount of Debentures, and
immediately convert such amount of Debentures into fully paid and nonassessable
shares of Common Stock at an initial conversion rate of ______ shares of Common
Stock per $50 principal amount of Debentures (which is equivalent to a
conversion price of $______ per share of Common Stock, subject to certain
adjustments set forth in the terms of the Debentures (as so adjusted,
"Conversion Price")).
(b) In order to convert Trust Securities into Common Stock, the Holder
shall submit to the Conversion Agent an irrevocable request to convert Trust
Securities on behalf of such
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Holder (the "Conversion Request"), together, if the Trust Securities are in
certificated form, with such Trust Security Certificates. The Conversion Request
shall: (i) set forth the number of Trust Securities to be converted and the name
or names, if other than the Holder, in which the shares of Common Stock should
be issued; and (ii) direct the Conversion Agent (A) to exchange such Trust
Securities for a portion of the Debentures held by the Trust (at the rate of
exchange specified in Section 4.3(a)) and (B) to immediately convert such
Debentures on behalf of such Holder into Common Stock (at the Conversion Price
specified in Section 4.3(a)). The Conversion Agent shall notify the Trust of the
Holder's election to exchange Trust Securities for a portion of the Debentures
held by the Trust and the Property Trustee on behalf of the Trust shall, upon
receipt of such notice, deliver to the Conversion Agent the appropriate
principal amount of Debentures for exchange in accordance with this Section 4.3.
The Conversion Agent shall thereupon notify the Depositor of the Holder's
election to convert such Debentures into shares of Common Stock.
(c) Accrued Distributions shall not be paid on Preferred Securities
that are converted, nor will any payment, allowance or adjustment be made for
accumulated and unpaid Distributions, whether or not in arrears, on converted
Preferred Securities except that if any Trust Security is converted (i) on or
after a record date for payment of Distributions thereon, the amount of the
Distributions payable on the related payment date with respect to such Trust
Security shall be paid by the converting Holder to the Trust and the
Distributions payable on the related payment date with respect to such Trust
Security shall be distributed on such payment date to the Holder as of such
record date, despite such conversion, and (ii) during an Extension Period and
after the Property Trustee mails a notice of redemption with respect to the
Preferred Securities that are converted, accrued and unpaid Distributions
through the date of conversion on such Preferred Securities called for
redemption shall be distributed to the Holder who converts such Preferred
Securities, which Distribution shall be made on the redemption date fixed for
redemption. Except as provided above, neither the Trust nor the Depositor shall
make, or be required to make, any payment, allowance or adjustment upon any
conversion on account of any accumulated and unpaid Distributions accrued on the
Trust Securities (including any Additional Amount) surrendered for conversion,
or on account of any accumulated and unpaid dividends, if any, on the shares of
Common Stock issued upon such conversion. The Depositor shall make no payment or
allowance for distributions on the shares of Common Stock issued upon such
conversion, except to the extent that such shares of Common Stock are held of
record on the record date for any such distributions and except as provided in
Section 12.9 of the Indenture. Trust Securities shall be deemed to have been
converted immediately prior to 5:00 p.m. (New York City time) on the day on
which a Conversion Request relating to such Trust Securities is received by the
Trust in accordance with the foregoing provisions of this Section 4.3 (the
"Conversion Date"). The Person or Persons entitled to receive the Common Stock
issuable upon conversion of the Debentures shall be treated for all purposes as
the record holder or holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Depositor shall issue and
deliver at the office of the Conversion Agent a certificate or certificates for
the number of full shares of Common Stock issuable upon such conversion,
together with the cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same as provided in Section
4.3(e), unless otherwise directed by
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the Holder in the Conversion Request, and the Conversion Agent shall distribute
such certificate or certificates to such Person or Persons.
(d) Each Holder of a Trust Security by his acceptance thereof appoints
the Bank (the "Conversion Agent") for the purpose of effecting the conversion of
Trust Securities in accordance with this Section 4.3. In effecting the
conversion and transactions described in this Section 4.3, the Conversion Agent
shall be acting as agent of the Securityholders directing it to effect such
conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Trust Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Trust Securities in accordance with this
Section 4.3 and (ii) to convert all or a portion of the Debentures into Common
Stock and thereupon to deliver such shares of Common Stock in accordance with
the provisions of this Section 4.3 and to deliver to the Trust a new Debenture
or Debentures for any resulting unconverted principal amount.
(e) No fractional shares of Common Stock shall be issued as a result of
conversion, but in lieu thereof, such fractional interest shall be paid in cash
(based on the last reported sale price of the Common Stock on the Conversion
Date) by the Depositor to the Trust, which in turn shall make such payment to
the Holder or Holders of Trust Securities so converted.
(f) The Depositor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all of the Debentures then outstanding. Notwithstanding
the foregoing, the Depositor shall be entitled to deliver, upon conversion of
Debentures, shares of Common Stock reacquired and held in the treasury of the
Depositor (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debentures shall be duly authorized, validly issued,
fully paid and nonassessable. The Trust shall deliver the shares of Common Stock
received upon conversion of the Debentures to the converting Holder free and
clear of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of the Depositor and the Trust shall
prepare and shall use its best efforts to obtain and keep in force such
governmental or regulatory permits or other authorizations as may be required by
law, and shall comply with all applicable requirements as to registration or
qualification of the Common Stock (and all requirements to list the Common Stock
issuable upon conversion of Debentures that are at the time applicable), in
order to enable the Depositor to lawfully issue Common Stock to the Trust upon
conversion of the Debentures and the Trust to lawfully deliver the Common Stock
to each Holder upon conversion of the Trust Securities.
(g) The Depositor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Trust Securities. The Depositor shall not, however, be
required to pay any tax that may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock in a name other than that in
which the Trust Securities so converted were registered, and no such issue or
delivery shall be made
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unless and until the person requesting such issue has paid to the Trust the
amount of any such tax or has established to the satisfaction of the Trust that
such tax has been paid.
(h) Nothing in this Section 4.3 shall limit the requirement of the
Trust to withhold taxes pursuant to the terms of the Trust Securities or as set
forth in this Trust Agreement or otherwise require the Property Trustee or the
Trust to pay any amount on account of such withholdings.
SECTION 4.4 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 4.2(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the
Trust Securities; provided, however, that if on any Distribution Date or
Redemption Date any Event of Default resulting from a Indenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any Common
Security, and no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions (including Additional Amounts,
if applicable) on all Outstanding Preferred Securities for all Distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all Outstanding
Preferred Securities then called for redemption, shall have been made or
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Indenture Event of Default, the Holder of Common Securities shall be
deemed to have waived any right to act with respect to any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Preferred Securities shall have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities shall have the right to direct the
Property Trustee to act on their behalf.
SECTION 4.5 PAYMENT PROCEDURES.
Payments of Distributions (including Additional Amounts, if applicable)
in respect of the Preferred Securities shall be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Securities Register or, if the Preferred Securities are held by a Clearing
Agency, such Distributions shall be made to the Clearing Agency in immediately
available funds, which shall credit the relevant Persons' accounts at such
Clearing Agency on the applicable Distribution Dates. Payments in respect of the
Common Securities shall be made in
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such manner as shall be mutually agreed in writing between the Property Trustee
and the Common Securityholder.
SECTION 4.6 TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form and the
information required to be provided on such form. The Administrative Trustees
shall provide the Depositor and the Property Trustee with a copy of all such
returns and reports promptly after such filing or furnishing. The Trustees shall
comply with United States federal withholding and backup withholding tax laws
and information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 4.7 PAYMENT OF EXPENSES OF TRUST.
Pursuant to Section 10.6 of the Indenture, the Depositor, as borrower,
has agreed to pay to the Trust, and reimburse the Trust for, the full amount of
any costs, expenses or liabilities of the Trust (other than obligations of the
Trust to pay the Holders of any Preferred Securities or other similar interests
in the Trust the amounts due such Holders pursuant to the terms of the Preferred
Securities or such other similar interests, as the case may be), including any
taxes, duties or other governmental charges of whatever nature (other than
withholding taxes) imposed on the Trust by the United States or any other taxing
authority. Such payment obligation includes any such costs, expenses or
liabilities of the Trust that are required by applicable law to be satisfied in
connection with a termination of the Trust.
SECTION 4.8 PAYMENTS UNDER INDENTURE OR PURSUANT TO DIRECT ACTIONS.
Any amount payable hereunder to any Holder of Preferred Securities
shall be reduced by the amount of any corresponding payment such Holder (or an
Owner with respect to the Holder's Preferred Securities) has directly received
pursuant to Section 5.8 of the Indenture or Section 5.13 of this Trust
Agreement.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1 INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are Outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
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SECTION 5.2 TRUST SECURITIES CERTIFICATES.
The Trust Securities Certificates shall be issued in minimum
denominations of $50 Liquidation Amount and integral multiples of $50 in excess
thereof. The Trust Securities Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of at least one Administrative Trustee
and, if executed on behalf of the Trust by facsimile, countersigned by a
transfer agent or its agent. The Preferred Securities Certificates shall be
authenticated by the Property Trustee by manual or facsimile signature of an
authorized signatory thereof and, if executed by such authorized signatory of
the Property Trustee by facsimile, countersigned by a transfer agent or its
agent. Trust Securities Certificates bearing the manual signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust or the Property Trustee or, if
executed on behalf of the Trust or the Property Trustee by facsimile,
countersigned by a transfer agent or its agent, shall be validly issued and
entitled to the benefits of this Trust Agreement, notwithstanding that such
individuals or any of them shall have ceased to be so authorized prior to the
delivery of such Trust Securities Certificates or did not hold such offices at
the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 5.4, 5.12 and 5.14.
SECTION 5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman of the board,
its president, any executive vice president or any vice president and its
treasurer or assistant treasurer or controller without further corporate action
by the Depositor, in authorized denominations.
SECTION 5.4 REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES CERTIFICATES.
(a) The Depositor shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 5.8, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Preferred Securities Certificates (the "Securities Register") in which the
transfer agent and registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section 5.11 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of
Preferred Securities Certificates as herein provided. The Bank shall be the
initial Securities Registrar.
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.8, the Administrative Trustees or any one of them shall execute on behalf of
the Trust (and if executed on behalf of the Trust by a
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facsimile signature, such certificate shall be countersigned by a transfer agent
or its agent) and deliver, in the name of the designated transferee or
transferees, one or more new Preferred Securities Certificates in authorized
denominations of a like aggregate Liquidation Amount dated the date of execution
by such Administrative Trustee or Trustees. The Securities Registrar shall not
be required to register the transfer of any Preferred Securities that have been
called for redemption during a period beginning at the opening of business 15
days before the day of selection for such redemption.
(c) At the option of a Holder, Preferred Securities Certificates may be
exchanged for other Preferred Securities Certificates in authorized
denominations of the same class and of a like aggregate Liquidation Amount upon
surrender of the Preferred Securities Certificates to be exchanged at the office
or agency maintained pursuant to Section 5.8.
(d) Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by an
Administrative Trustee or the Securities Registrar in accordance with such
Person's customary practice.
(e) No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
SECTION 5.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute by manual or facsimile signature and, if executed on behalf
of the Trust by facsimile signature, such certificate shall be countersigned by
a transfer agent, and make available for delivery, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section 5.5, the Administrative Trustees or the Securities Registrar may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section 5.5 shall constitute conclusive
evidence of an undivided beneficial interest in the
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Trust Property, as if originally issued, whether or not the lost, stolen or
destroyed Trust Securities Certificate shall be found at any time.
SECTION 5.6 PERSONS DEEMED SECURITYHOLDERS.
The Trustees or the Securities Registrar shall treat the Person in
whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving Distributions and for all other purposes whatsoever, and
neither the Trustees nor the Securities Registrar shall be bound by any notice
to the contrary.
SECTION 5.7 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor, the Property Trustee or the Administrative Trustees accountable
by reason of the disclosure of its name and address, regardless of the source
from which such information was derived.
SECTION 5.8 MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain an office or offices or
agency or agencies where Preferred Securities Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Trustees in respect of the Trust Securities Certificates may be served.
The Administrative Trustees initially designate First Chicago Delaware Inc.,
a Delaware Corporation, Attn: Corporate Trust Department, as their principal
corporate trust office for such purposes. The Administrative Trustees shall give
prompt written notice to the Depositor, the Property Trustee and to the
Securityholders of any change in the location of the Securities Register or any
such office or agency.
SECTION 5.9 APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying Agent
shall initially be the Bank and any co-paying agent chosen by the Bank and
acceptable to the Administrative Trustees and the Depositor. Any Person acting
as Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Administrative Trustees, the Property Trustee and the
Depositor. In the event that the Bank shall no longer be the Paying Agent or a
successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
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Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Trustees that, as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
such Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon resignation or removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.1, 8.3 and 8.6 shall apply to the Bank also in its role
as Paying Agent, for so long as the Bank shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any Paying
Agent shall be bound by the requirements of the Trust Indenture Act with respect
to paying agents of securities. Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
SECTION 5.10 APPOINTMENT OF CONVERSION AGENT.
The Conversion Agent shall convert the Trust Securities of the
Securityholders in accordance with Section 4.3. The Administrative Trustees may
revoke such power and remove the Conversion Agent if such Trustees determine in
their sole discretion that the Conversion Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Conversion
Agent shall initially be the Bank, and any co-paying agent chosen by the Bank,
and acceptable to the Administrative Trustees and the Depositor. Any Person
acting as Conversion Agent shall be permitted to resign as Conversion Agent upon
30 days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the Conversion
Agent or a successor Conversion Agent shall resign or its authority to act be
revoked, the Administrative Trustees shall appoint a successor (which shall be a
bank or trust company) that is acceptable to the Property Trustee and the
Depositor to act as Conversion Agent. The provisions of Sections 8.1, 8.3 and
8.6 shall apply to the Bank also in its role as Conversion Agent for so long as
the Bank shall act as Conversion Agent and, to the extent applicable, to any
other conversion agent appointed hereunder. Any Conversion Agent shall be bound
by the requirements with respect to conversion agents of securities issued
pursuant to the Trust Indenture Act. Any reference in this Agreement to the
Conversion Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 5.11 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than a transfer in connection with a consolidation or merger of
the Depositor into another Person, or any conveyance, transfer or lease by the
Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, any attempted transfer of the
Common Securities shall be void. The Administrative Trustees shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE TO ANY PERSON."
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SECTION 5.12 BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON
SECURITIES CERTIFICATE.
(a) The Preferred Securities Certificates, upon original issuance,
shall be issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by or on
behalf of the Trust. Such Preferred Securities Certificate or Certificates shall
initially be registered on the Securities Register in the name of Cede & Co.,
the nominee of the initial Clearing Agency, and no Owner will receive a
Definitive Preferred Securities Certificate representing such Owner's interest
in such Preferred Securities, except as provided in Section 5.14. Unless and
until Definitive Preferred Securities Certificates have been issued to Owners
pursuant to Section 5.14:
(i) the provisions of this Section 5.12(a) shall be in full
force and effect;
(ii) the Securities Registrar and the Trustees shall be
entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Book-Entry Preferred Securities
Certificates (including the payment of the Liquidation Amount of and
Distributions on the Preferred Securities evidenced by Book-Entry
Preferred Securities Certificates and the giving of instructions or
directions to Owners of Preferred Securities evidenced by Book-Entry
Preferred Securities Certificates) as the sole Holder of Preferred
Securities evidenced by Book-Entry Preferred Securities Certificates
and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.12
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.12 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless
and until Definitive Preferred Securities Certificates are issued
pursuant to Section 5.14, the initial Clearing Agency shall make
book-entry transfers among the Clearing Agency Participants and receive
and transmit payments on the Preferred Securities to such Clearing
Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.13 NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to the Owners pursuant to Section
5.14, the Trustees shall give all such notices and communications specified
herein to be given to the Owners to the Clearing Agency, and shall have no
obligations to the Owners.
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SECTION 5.14 DEFINITIVE PREFERRED SECURITIES CERTIFICATES.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Indenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Owners of
Preferred Securities Certificates, then the Administrative Trustees shall notify
other Trustees and the Clearing Agency, and the Clearing Agency, in accordance
with its customary rules and procedures, shall notify all Clearing Agency
Participants for whom it holds Preferred Securities of the occurrence of any
such event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees of the typewritten Preferred
Securities Certificate or Certificates representing the Book-Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Clearing Agency or, if executed on behalf of the Trust by facsimile,
countersigned by a transfer agent or its agent. Neither the Securities Registrar
nor the Trustees shall be liable for any delay in delivery of such instructions
and may conclusively rely upon, and shall be protected in relying upon, such
instructions. Upon the issuance of Definitive Preferred Securities Certificates,
the Trustees shall recognize the Holders of the Definitive Preferred Securities
Certificates as Securityholders. The Definitive Preferred Securities
Certificates shall be typewritten, printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustees that meets the requirements of any stock exchange or automated
quotation system on which the Preferred Securities are then listed or approved
for trading, as evidenced by the execution thereof by the Administrative
Trustees or any one of them.
SECTION 5.15 RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial ownership interest in the assets of the Trust conferred by
their Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities
shall have no preemptive or similar rights and when issued and delivered to
Securityholders against payment of the purchase price therefor shall be fully
paid and nonassessable by the Trust. The Holders of the Preferred Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
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(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Indenture Event of Default, the Indenture Trustee fails or the holders of
not less than 25% in principal amount of the outstanding Debentures fail to
declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in Liquidation Amount of the Preferred
Securities then Outstanding shall have such right by a notice in writing to the
Depositor and the Indenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable as set forth in the Indenture, provided that
the payment of principal and interest on such Debentures shall remain
subordinated to the extent provided in the Indenture. At any time after such a
declaration of acceleration with respect to the Debentures has been made and
before a judgment or decree for payment of the money due has been obtained by
the Indenture Trustee as described in the Indenture, the Holders of a majority
in Liquidation Amount of the Preferred Securities, by written notice to the
Property Trustee, the Depositor and the Indenture Trustee, may rescind and annul
such declaration and its consequences if: (i) the Depositor has paid or
deposited with the Indenture Trustee a sum sufficient to pay (A) all overdue
installments of interest (including any Additional Interest (as defined in the
Indenture)) on all of the Debentures, (B) the principal of any Debentures which
have become due otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures and (C) all sums paid or advanced by
the Indenture Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and the Property
Trustee, their agents and counsel; and (ii) all Events of Default with respect
to the Debentures, other than the non-payment of the principal of the Debentures
which has become due solely by such acceleration, have been cured or waived as
provided in Section 5.13 of the Indenture.
(c) The Holders of a majority in aggregate Liquidation Amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless all Events of Default with respect to
the Debentures, other than the non-payment of the principal of the Debentures
which has become due solely by such acceleration, have been cured or annulled as
provided in Section 5.3 of the Indenture and the Depositor has paid or deposited
with the Indenture Trustee a sum sufficient to pay all overdue installments of
interest (including any Additional Interest) on the Debentures, the principal of
any Debentures which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures, and all
sums paid or advanced by the Indenture Trustee under the Indenture and the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and the Property Trustee, their agents and counsel) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
(d) Upon receipt by the Property Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of the
Preferred Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, a record date shall be established for determining
Holders of Outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee
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receives such notice. The Holders of Outstanding Preferred Securities on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, that, unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice that has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.15(d).
(e) Without limiting the generality of the foregoing, the Holders of a
majority in aggregate Liquidation Amount of the Preferred Securities will have
the right to appoint a Special Administrative Trustee under the circumstances
described in Section 6.1(d), who shall have the same rights, powers and
privileges as the other Administrative Trustees.
(f) For so long as any Preferred Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Indenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Preferred Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of the
principal amount of or interest on Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holder (a "Direct
Action"). Except as set forth in this Section 5.15, the Holders of Preferred
Securities shall have no right to exercise directly any right or remedy
available to the holders of, or in respect of, the Debentures.
SECTION 5.16 CUSIP NUMBERS.
The Administrative Trustees in issuing the Preferred Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Property Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Preferred 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 Preferred Securities, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Administrative Trustees will promptly notify the Property Trustee
of any change in the CUSIP numbers.
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ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section 6.1, in Sections 5.15, 8.10 and
10.3 and in the Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees, without obtaining the prior approval of the Holders of at least a
majority in Liquidation Amount of all Outstanding Preferred Securities, shall
not: (i) direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or executing any trust or power
conferred on the Indenture Trustee with respect to such Debentures; (ii) waive
any past default which is waiveable under Section 5.13 of the Indenture; (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable; or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent shall be required; provided, however, that where a consent under the
Indenture would require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Preferred Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of Preferred Securities, except by a subsequent vote of the Holders of Preferred
Securities. The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of default received from the Indenture Trustee with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Administrative Trustees shall, at the expense of the Depositor,
obtain an Opinion of Counsel experienced in such matters to the effect that such
action shall not cause the Trust to fail to be classified as a grantor trust for
United States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class shall 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 Outstanding Preferred Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, the Trust would fail to be classified as
a grantor trust for United States federal income tax purposes.
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(d) If (i) the Trust fails to pay Distributions in full on the
Preferred Securities for six consecutive quarterly distribution periods, or (ii)
a Trust Agreement Event of Default occurs and is continuing (each, an
"Appointment Event"), then the holders of the Preferred Securities, acting as a
single class, will be entitled by the majority vote of such holders to appoint a
Special Administrative Trustee. For purposes of determining whether the Trust
has failed to pay Distributions in full for six consecutive quarterly
distribution periods, Distributions shall be deemed to remain in arrears,
notwithstanding any payments in respect thereof, until full cumulative
Distributions have been or contemporaneously are paid with respect to all
quarterly distribution periods terminating on or prior to the date of payment of
such cumulative distributions. Any holder of Preferred Securities (other than
the Depositor or any of its affiliates) shall be entitled to nominate any person
to be appointed as Special Administrative Trustee. Not later than 30 days after
such right to appoint a Special Administrative Trustee arises, the
Administrative Trustees shall convene a meeting of the holders of Preferred
Securities for the purpose of appointing a Special Administrative Trustee. If
the Administrative Trustees fail to convene such meeting within such 30-day
period, the holders of not less than 10% of the aggregate stated liquidation
amount of the outstanding Preferred Securities will be entitled to convene such
meeting. The provisions of this Agreement relating to the convening and conduct
of the meetings of the holders will apply with respect to any such meeting. Any
Special Administrative Trustee so appointed shall cease to be a Special
Administrative Trustee if the Appointment Event pursuant to which the Special
Administrative Trustee was appointed and all other Appointment Events cease to
be continuing.
SECTION 6.2 NOTICE OF MEETINGS.
Notice of all meetings of the Securityholders, stating the time, place
and purpose of the meeting, shall be given by the Property Trustee pursuant to
Section 10.9 to each Securityholder of record, at his registered address, at
least 15 days and not more than 90 days before the meeting. At any such meeting,
any business properly before the meeting may be so considered whether or not
stated in the notice of the meeting. Any adjourned meeting may be held as
adjourned without further notice.
SECTION 6.3 MEETINGS OF SECURITYHOLDERS.
(a) No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Securityholders holding of
record of 25% of the Outstanding Preferred Securities (based upon their
Liquidation Amount) and the Administrative Trustees or the Property Trustee may,
at any time in their discretion, call a meeting of Securityholders to vote on
any matters as to which Securityholders are entitled to vote.
(b) Securityholders holding of record of 50% of the Outstanding
Preferred Securities (based upon their Liquidation Amount), present in person or
by proxy, shall constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by the
Securityholders of record present, in person or by proxy, holding more than a
majority of the Outstanding Preferred
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Securities (based upon their Liquidation Amount) held by Holders of record of
Outstanding Preferred Securities present, either in person or by proxy, at such
meeting shall constitute the action of the Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.4 VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $50 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5 PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of the Property Trustee, proxies may be solicited in
the name of the Property Trustee or one or more officers of the Property
Trustee. Only Securityholders of record shall be entitled to vote. When Trust
Securities are held jointly by several Persons, any one of them may vote at any
meeting in person or by proxy in respect of such Trust Securities, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Trust Securities. A
proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
SECTION 6.6 SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding a majority of all Outstanding
Trust Securities (based upon their Liquidation Amount) entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any express provision of this Trust Agreement) shall consent to the action in
writing.
SECTION 6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of a Distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
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SECTION 6.8 ACTS OF SECURITYHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Trust Agreement to be
given, made or taken by Securityholders or Owners may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders or Owners in person or by an agent duly appointed in
writing; and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders or Owners signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.1) conclusive in favor of the Trustees, if made in the manner provided in this
Section 6.8.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
(c) The ownership of Preferred Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of a Holder of any Trust Security shall bind every future
Holder of the same Trust Security and the Holder of every Trust Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustees or the Trust in reliance thereon, whether or not notation of such
action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled hereunder
to take any action hereunder with regard to any particular Trust Security may do
so with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such Liquidation
Amount.
(f) If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
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SECTION 6.9 INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE AND
DELAWARE TRUSTEE.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Securityholders that:
(a) the Property Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware banking corporation duly
organized, validly existing and in good standing in the State of Delaware;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement has
been duly authorized by all necessary corporate or other action on the part of
the Property Trustee and the Delaware Trustee and does not require any approval
of stockholders of the Property Trustee and the Delaware Trustee and such
execution, delivery and performance will not (i) violate the charter or by-laws
of the Property Trustee or the Delaware Trustee, (ii) violate any provision of,
or constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the
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provisions of, any indenture, mortgage, credit agreement, license or other
agreement or instrument to which the Property Trustee or the Delaware Trustee is
a party or by which it is bound, or (iii) violate any law, governmental rule or
regulation of the State of ________ or the State of Delaware, as the case may
be, governing the banking, trust or general powers of the Property Trustee or
the Delaware Trustee (as appropriate in context) or any order, judgment or
decree applicable to the Property Trustee or the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing law or regulation or Delaware law governing the banking, trust or
general powers of the Property Trustee or the Delaware Trustee, as the case may
be; and
(b) there are no proceedings pending or, to the best of the Property
Trustee's and the Delaware Trustee's knowledge, threatened against or affecting
the Property Trustee or the Delaware Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued at the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Trustees pursuant to the terms and
provisions of, and in accordance with the requirements of, this Trust Agreement
and the Securityholders will be, as of such date, entitled to the benefits of
this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
SECTION 8.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding
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the foregoing, no provision of this Trust Agreement shall require the Trustees
to expend or risk their own funds or otherwise incur any financial liability in
the performance of any of their duties hereunder, or in the exercise of any of
their rights or powers, if they shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to them. Whether or not therein expressly so provided,
every provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section 8.1. Nothing in this Trust Agreement shall be
construed to release an Administrative Trustee from liability for its own
grossly negligent action, its own grossly negligent failure to act or its own
willful misconduct. To the extent that, at law or in equity, an Administrative
Trustee has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to the Securityholders, such Administrative Trustee shall not be
liable to the Trust or to any Securityholder for such Trustee's good faith
reliance on the provisions of this Trust Agreement. The provisions of this Trust
Agreement, to the extent that they restrict the duties and liabilities of the
Administrative Trustees otherwise existing at law or in equity, replace such
other duties and liabilities of the Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it shall look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
majority in Liquidation Amount of the Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement;
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(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust Agreement, nor
shall the Property Trustee be liable for the default or misconduct of
the Administrative Trustees or the Depositor.
SECTION 8.2 CERTAIN NOTICES.
(a) Within ten Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.9, notice of
such Event of Default to the Securityholders, the Administrative Trustees and
the Depositor, unless such Event of Default shall have been cured or waived.
(b) Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Administrative Trustee shall transmit,
in the manner and to the extent provided in Section 10.9, notice of such
exercise to the Securityholders and the Property Trustee, unless such exercise
shall have been revoked.
SECTION 8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure of the application of
any
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provision of this Trust Agreement, then, except as to any matter as to which
the Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Depositor or
the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its selection
(which counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice; and the Property Trustee shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders,
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but the Property Trustee may make such further inquiry or investigation into
such facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive written instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request written instructions from the Holders of the Trust
Securities, which written instructions may only be given by the Holders of the
same proportion in Liquidation Amount of the Trust Securities as would be
entitled to direct the Property Trustee under the terms of the Trust Securities
in respect of such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such written instructions are
received and (iii) shall be protected in acting in accordance with such written
instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
SECTION 8.5 MAY HOLD SECURITIES.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 8.6 COMPENSATION; INDEMNITY; FEES.
Pursuant to Section 10.6 of the Indenture, the Depositor, as borrower,
agrees:
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(a) to pay to the Trustees from time to time such compensation as shall
be agreed in writing with the Depositor for all services rendered by them
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (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; and
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any Trustee
and (iv) any employee or agent of the Trust or its Affiliates (referred to
herein as an "Indemnified Person") from and against any and all loss, damage,
liability, tax, penalty, expense or claim of any kind or nature whatsoever
incurred by such Indemnified Person by reason of the creation, operation or
termination of the Trust or any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Trust Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions. When the Property
Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 5.1(4) or Section 5.1(5) of the Indenture, the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
(d) The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement.
(e) No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
(f) The Depositor and any Trustee (in the case of the Property Trustee,
subject to Section 8.8 hereof) may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor nor any Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor and any Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may
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engage or be interested in any financial or other transaction with the Depositor
or any Affiliate of the Depositor, or may act as depository for, trustee or
agent for, or act on any committee or body of Holders of, securities or other
obligations of the Depositor or its Affiliates.
SECTION 8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF
TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
8.7, the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article VIII.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
SECTION 8.8 CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
SECTION 8.9 CO-TRUSTEES AND SEPARATE TRUSTEE.
(a) 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
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such
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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 the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 8.9. If the Depositor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case a Indenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment. Any co-trustee or
separate trustee appointed pursuant to this Section 8.9 shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity. Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
(b) Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Trust Securities shall be executed and delivered and
all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustees specified
hereunder shall be exercised solely by such Trustees and not by such
co-trustee or separate trustee.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Property Trustee or by the Property
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Property Trustee shall
be incompetent or unqualified to perform such act, in which event such
rights, powers, duties and obligations shall be exercised and performed
by such co-trustee or separate trustee.
(iii) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor,
may accept the resignation of or remove any co-trustee or separate
trustee appointed under this Section 8.9, and, in case a Indenture
Event of Default has occurred and is continuing, the Property Trustee
shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the
Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements necessary or
proper to effectuate such resignation or removal. A successor to any
co-trustee or separate trustee so resigned or removed may be appointed
in the manner provided in this Section 8.9.
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(iv) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property
Trustee or any other trustee hereunder.
(v) The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of any Trustee (the "Relevant Trustee")
and no appointment of a successor Trustee pursuant to this Article VIII shall
become effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
(b) Subject to Section 8.10(a), the Relevant Trustee may resign at any
time by giving written notice thereof to the Securityholders. If the instrument
of acceptance by the successor Trustee required by Section 8.11 shall not have
been delivered to the Relevant Trustee within 30 days after the giving of such
notice of resignation, the Relevant Trustee may petition, at the expense of the
Trust, any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
(c) Unless a Indenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Indenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time. If the instrument of
acceptance by the successor Trustee required by Section 8.11 shall not have been
delivered to the Relevant Trustee within 30 days after such removal, the
Relevant Trustee may petition, at the expense of the Trust, any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
(d) If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee for
any cause, at a time when no Indenture Event of Default shall have occurred and
be continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring Trustee shall comply with the applicable requirements
of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign,
be removed or become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case may be, at a time when a Indenture Event of
Default shall have occurred and be continuing, the Securityholders, by Act of
the Securityholders holding a majority in Liquidation Amount of the Preferred
Securities then Outstanding delivered to the retiring Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Trustee shall comply with the applicable requirements of Section 8.11. If an
Administrative Trustee shall
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resign, be removed or become incapable of acting as Administrative Trustee, at a
time when a Indenture Event of Default shall have occurred and be continuing,
the Common Securityholder by Act of the Common Securityholder delivered to the
Administrative Trustee shall promptly appoint a successor Administrative Trustee
or Administrative Trustees and such successor Administrative Trustee or Trustees
shall comply with the applicable requirements of Section 8.11. If no successor
Relevant Trustee shall have been so appointed by the Common Securityholder or
the Securityholders and accepted appointment in the manner required by Section
8.11, any Securityholder who has been a Securityholder of Trust Securities for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee.
(e) The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.9 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
(f) Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (i) the unanimous act of the remaining Administrative Trustees
if there are at least two of them or (ii) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees or Delaware Trustee, as the case may be, set forth
in Section 8.7).
SECTION 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on written request of the Trust or any successor Relevant Trustee such retiring
Relevant Trustee shall duly assign, transfer and deliver to such successor
Relevant Trustee all Trust Property, all proceeds thereof and funds held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and the
Trust. Upon written request of any such successor Relevant Trustee, the Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming
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to such successor Relevant Trustee all such rights, powers and trusts referred
to in this Section 8.11. No successor Relevant Trustee shall accept its
appointment unless at the time of such acceptance such successor Relevant
Trustee shall be qualified and eligible under this Article.
SECTION 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article VIII, without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
SECTION 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR
TRUST.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Property Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Property Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and
(ii) to collect and receive any money or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee. Nothing
herein contained shall be deemed to authorize the Property Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement adjustment or compensation
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affecting the Trust Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder in
any such proceeding.
SECTION 8.14 REPORTS BY PROPERTY TRUSTEE.
(a) The Property Trustee shall transmit to Securityholders such reports
concerning the Property Trustee and its actions under this Trust Agreement as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto. If required by Section 3 13(a) of the Trust
Indenture Act, the Property Trustee shall, within 60 days after each May 15
following the date of this Trust Agreement, 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 Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Preferred Securities are listed or
traded, if any, with the Commission and with the Depositor. The Depositor will
promptly notify the Property Trustee of any such listing or trading.
SECTION 8.15 REPORTS TO PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act. Delivery of such reports, information and documents to the Property Trustee
is for informational purposes only and the Property Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Trust's
compliance with any of its covenants hereunder (as to which the Property Trustee
is entitled to rely exclusively on Officers' Certificates).
SECTION 8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.17 NUMBER OF TRUSTEES.
(a) The number of Trustees shall be four, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
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(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to dissolve, terminate or annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Trust Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.18 DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing.
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of this Trust Agreement, as set forth herein.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1 TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically terminate on
___________, 2053 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2 EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Holder of the Common Securities;
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(b) the written direction to the Property Trustee from the Depositor at
any time to terminate the Trust and, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, distribute Debentures to
Securityholders in exchange for the Preferred Securities (which direction is
optional and wholly within the discretion of the Depositor);
(c) the occurrence of (i) a Tax Event, but only if the Administrative
Trustees shall have received an opinion from independent tax counsel experienced
in such matters, which opinion may rely on published revenue rulings of the
Internal Revenue Service, to the effect that the holders of the Preferred
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of such Early Termination Event and distribution of
Debentures; unless at the time there is available to the Trust the opportunity
to eliminate, within such 90 day period, the Special Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure, which has no adverse effect on the Trust,
TXI or the holders of the Preferred Securities, and the Trust pursues such
measure in lieu of dissolution; or (ii) an Investment Company Event;
(d) the redemption of all of the Preferred Securities in connection
with the redemption of all of the Debentures;
(e) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction; and
(f) the distribution of Common Stock to all Securityholders upon
conversion of all outstanding Preferred Securities.
SECTION 9.3 TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; and (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders.
SECTION 9.4 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b), (c) or
(e) of Section 9.2 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction or the making of reasonable
provisions for the payment of liabilities to creditors of the Trust as provided
by applicable law, to each Securityholder a Like Amount of Debentures, subject
to Section 9.4(d). Notice of liquidation shall be given by the Property Trustee
by first-class mail, postage prepaid mailed not later than 30 nor more than 60
days prior to the Liquidation Date to each Holder of
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Trust Securities at such Holder's address appearing in the Securities Register.
All notices of liquidation shall:
(i) state the CUSIP Number of the Trust Securities;
(ii) state the Liquidation Date;
(iii) state that from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and any
Trust Securities Certificates not surrendered for exchange will be
deemed to represent a Like Amount of Debentures; and
(iv) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for
Debentures or, if Section 9.4(d) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) Except where Section 9.2(d) or 9.4(e) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(d) or 9.4(e) applies, after the
Liquidation Date, (i) the Trust Securities shall no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures shall be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
the Depositor shall use its best efforts to have the Debentures listed on the
New York Stock Exchange or on such other exchange, interdealer quotation system
or self-regulatory organization as the Preferred Securities are then listed or
traded, (iv) any Trust Securities Certificates not so surrendered for exchange
shall be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so surrendered,
no payments of interest or principal will be made to Holders of Trust Securities
Certificates with respect to such Debentures), and (v) all rights of
Securityholders holding Trust Securities shall cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
wound-up or terminated, by the Property Trustee. In such event, Securityholders
will be entitled to receive out of the assets of the Trust available for
distribution to Securityholders, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law, an amount equal to the Liquidation
Amount per Trust Security plus accumulated and unpaid Distributions thereon
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to the date of payment (such amount being the "Liquidation Distribution"). If,
upon any such winding up or termination, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder
of the Common Securities shall be entitled to receive Liquidation Distributions
upon any such winding-up or termination pro rata (determined as aforesaid) with
Holders of Preferred Securities, except that, if a Indenture Event of Default
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities.
SECTION 9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF
TRUST.
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Article IX. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, the Trust may merge
with or into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Preferred Securities or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise, (ii) the
Depositor expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the Debentures,
(iii) the Successor Securities are listed or traded, or any Successor Securities
shall be listed upon notification of issuance, on any national securities
exchange or other organization on which the Preferred Securities are then listed
or traded, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor Securities) in any material
respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act,
and (viii) the Depositor owns all of the common securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the
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foregoing, the Trust shall not, except with the consent of Holders of 100% in
Liquidation Amount of the Preferred Securities, 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 other Person or permit any other
Person to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity to be classified as other than a
grantor trust for United States federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death, incapacity, liquidation, dissolution, termination or
bankruptcy of any Person having an interest, beneficial or otherwise, in Trust
Securities shall not operate to terminate this Trust Agreement, nor entitle the
legal representatives or heirs of such Person or any Securityholder for such
Person, to claim an accounting, take any action or bring any proceeding in any
court for a partition or winding up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
SECTION 10.2 LIABILITY OF COMMON SECURITYHOLDER.
The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Trust
Securities) to the extent not satisfied out of the Trust's assets.
SECTION 10.3 AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee, the Administrative Trustees and the Depositor, without the
consent of any Securityholders, (i) to cure any ambiguity, correct or supplement
any provision herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Trust Agreement, which shall not be inconsistent with the other
provisions of this Trust Agreement, or (ii) to modify, eliminate or add to any
provisions of this Trust Agreement to such extent as shall be necessary to
ensure that the Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Trust Securities are
Outstanding or to ensure that the Trust will not be required to register as an
investment company under the 1940 Act; provided, however, that in the case of
clause (i) or clause (ii), such action shall not adversely affect in any
material respect the interests of any Securityholder, and any such amendments of
this Trust Agreement shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 10.3(c) hereof, any provision of this
Trust Agreement may be amended by the Trustees and the Depositor with (i) the
consent of Securityholders representing not less than a majority (based upon
Liquidation Amounts) of the
54
<PAGE> 60
Trust Securities then Outstanding, and (ii) receipt by the Trustees of an
Opinion of Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment will not affect
the Trust's status as a grantor trust for United States federal income tax
purposes or the Trust's exemption from status of an investment company under the
1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
Section 10.3(c) may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 10.4 SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.5 GOVERNING LAW.
THIS TRUST AGREEMENT AND TILE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL
55
<PAGE> 61
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
SECTION 10.6 PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest shall
accrue thereon for the period after such date.
SECTION 10.7 SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.8 HEADINGS.
(a) The Article and Section headings are for convenience only and shall
not affect the construction of this Trust Agreement.
SECTION 10.9 REPORTS, NOTICES AND DEMANDS.
(a) Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed: (i) in the case of
a Securityholder, to such Securityholder as such Securityholder's name and
address may appear on the Securities Register; and (ii) in the case of the
Common Securityholder or the Depositor, to Texas Industries, Inc., 1341 West
Mockingbird Lane, Dallas, Texas 75247-6913, Attention: Robert C. Moore, Vice
President -- General Counsel and Secretary, facsimile no.: (972) 647-3320. Such
notice, demand or other communication to or upon a Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission.
(b) Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee, the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (i) with respect to the Property Trustee to First
Chicago Delaware Inc., Attention: Corporate Trust Administration; (ii) with
respect to the Delaware Trustee, to First Chicago Delaware Inc., with a copy to
the
56
<PAGE> 62
Property Trustee at the address set forth in clause (i); and (iii) with respect
to the Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention Administrative Trustees of TXI Capital Trust I."
Such notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon actual
receipt of the writing by the Trust or the Property Trustee.
SECTION 10.10 AGREEMENT NOT TO PETITION.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including the United States Bankruptcy
Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.10, the Property Trustee
agrees, for the benefit of Securityholders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Property Trustee
or the Trust may assert. The provisions of this Section 10.10 shall survive the
termination of this Trust Agreement.
SECTION 10.11 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required or deemed to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required or
deemed provision shall control. If any provision of this Trust Agreement
modifies or excludes any provision of the Trust Indenture Act which may be so
modified or excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
57
<PAGE> 63
SECTION 10.12 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
SECTION 10.13 HOLDERS ARE PARTIES.
Notwithstanding that Holders have not executed and delivered this Trust
Agreement or any counterpart thereof, Holders shall be deemed to be parties to
this Trust Agreement and shall be bound by all of the terms and conditions
hereof and of the Trust Securities by acceptance and delivery of the Trust
Securities.
58
<PAGE> 64
SECTION 10.14 COUNTERPARTS.
This Trust Agreement may contain more than one counterpart of the
signature page and this Trust Agreement may be executed by the affixing of the
signature of each of the Trustees of one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
TEXAS INDUSTRIES, INC.
By:
---------------------------------------
Name:
Title:
The First National Bank of Chicago
as Property Trustee
By:
---------------------------------------
Name:
Title:
First Chicago Delaware Inc.
as Delaware Trustee
By:
---------------------------------------
Name:
Title:
Kenneth R. Allen
as Administrative Trustee
------------------------------------------
Larry L. Clark
as Administrative Trustee
------------------------------------------
James M. McCraw
as Administrative Trustee
------------------------------------------
59
<PAGE> 65
EXHIBIT A
CERTIFICATE OF TRUST
OF
TXI CAPITAL TRUST I
THIS CERTIFICATE OF TRUST OF TXI CAPITAL TRUST I (the "Trust"), dated
May 26, 1998, is being duly executed and filed by First Chicago Delaware Inc., a
Delaware banking corporation, Kenneth R. Allen, Larry L. Clark and James R.
McCraw, each an individual, as trustees, 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 TXI CAPITAL TRUST
I.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is First Chicago Delaware Inc., 300 King
Street, Wilmington, Delaware 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.
[Signature on next page]
<PAGE> 66
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
First Chicago Delaware inc.
as Delaware Trustee
By: /s/ SANDRA L. CARUBA
-----------------------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ KENNETH R. ALLEN
--------------------------------------
Kenneth R. Allen, as Trustee
/s/ LARRY L. CLARK
--------------------------------------
Larry L. Clark as Trustee
/s/ JAMES M. MCCRAW
--------------------------------------
James M. McCraw as Trustee
2
<PAGE> 67
EXHIBIT B
CERTIFICATE DEPOSITORY AGREEMENT
See attached.
<PAGE> 68
EXHIBIT C
FORM OF COMMON SECURITY
THIS CERTIFICATE IS NOT TRANSFERABLE TO ANY PERSON
CERTIFICATE NUMBER: NUMBER OF COMMON SECURITIES:
C-1 C-1
CERTIFICATE EVIDENCING COMMON SECURITIES OF
TXI CAPITAL TRUST I
(LIQUIDATION AMOUNT $50 PER COMMON SECURITY)
TXI Capital Trust I, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that Texas Industries,
Inc. (the "Holder") is the registered owner of ______ common securities of the
Trust representing beneficial ownership interests of the Trust and designated
the Common Securities (Liquidation Amount $50 per Common Security) (the "Common
Securities"). In accordance with Section 5.11 of the Trust Agreement (as defined
below) the Common Securities are not transferable and any attempted transfer
thereof shall be void. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth in, and this certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Trust dated as of __________, 1998,
as the same may be amended from time to time (the "Trust Agreement") including
the designation of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Trust Agreement to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder and by acceptance hereof
agrees to the provisions of (i) the Guarantee Agreement entered into by Texas
Industries, Inc., a Delaware corporation ("TXI"), and _______________________ a
_______________________ ("_________________"), as guarantee trustee, dated as of
__________, 1998, and (ii) the Indenture entered into by TXI and
____________________, as trustee, dated as of __________, 1998.
<PAGE> 69
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate.
TXI CAPITAL TRUST I
By:
----------------------------------
Name:
Administrative Trustee
2
<PAGE> 70
EXHIBIT D
FORM OF PREFERRED SECURITY
This is a Global Certificate within the meaning of the Trust Agreement
hereinafter referred to and is registered in the name of The Depository Trust
Company (the "Depository") or a nominee of the Depository. This Trust Security
is exchangeable for Preferred Securities registered in the name of a person
other than the Depository or its nominee only in the limited circumstances
described in the Trust Agreement and no transfer of this Trust Security (other
than a transfer of this Trust Security as a whole by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in limited circumstances.
Unless this Trust Security is presented by an authorized representative
of the Depository (55 Water Street, New York, New York) to TXI Capital Trust I
or its agent for registration of transfer, exchange or payment, and any Trust
Security issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
CERTIFICATE NUMBER: NUMBER OF PREFERRED SECURITIES:
P-l _____
CUSIP NO. __________
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
TXI CAPITAL TRUST I
PREFERRED SECURITIES,
(LIQUIDATION AMOUNT $50 PER PREFERRED SECURITY)
TXI Capital Trust I, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of __________ preferred securities of the
Trust representing an undivided beneficial ownership interest in the assets of
the Trust and designated the TXI Capital Trust I share preference unit
redeemable securities (Liquidation Amount $50 per share preference unit
redeemable) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.4 of the Trust Agreement (as
defined
<PAGE> 71
below). The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued and
shall in all respects be subject to, the terms and provisions of, the Amended
and Restated Trust Agreement of the Trust dated as of __________, 1998, as the
same may be amended from time to time (the "Trust Agreement") including the
designation of the terms of Preferred Securities as set forth herein. The Holder
is entitled to the benefits of the Guarantee Agreement entered into by Texas
Industries, Inc., a Delaware corporation ("TXI"), and First Chicago Delaware
Inc., a Delaware corporation ("Preferred Guaranty Trustee"), as guarantee
trustee, dated as of __________, 1998 (the "Guarantee"), to the extent provided
therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee
to the Holder without charge upon written request to the Trust at its principal
place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder and by acceptance hereof
agrees to the provisions of (i) the Guarantee, and (ii) the Indenture entered
into by TXI and First Chicago Delaware Inc., as trustee, dated as of __________
, 1998.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate.
TXI CAPITAL TRUST I
By:
----------------------------------------
Name:
Administrative Trustee
This is one of the Securities referred to in the within mentioned Trust
Agreement.
Date of Authentication:
__________, 1998
By:
-------------------------------------
Name:
Title: Property Trustee
2
<PAGE> 72
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Trust Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Securities Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Trust
Security certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule l7Ad-15.1.
CONVERSION REQUEST
To: First Chicago Delaware Inc., as Conversion Agent under the Trust
Agreement of TXI Capital Trust I
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock of TEXAS INDUSTRIES, INC. (the "Common Stock") in
accordance with the terms of the Trust Agreement. Pursuant to the aforementioned
exercise of the option to convert these Preferred Securities, the undersigned
hereby directs the Conversion Agent (as that term is defined in the Trust
Agreement) to (i) exchange such Preferred Securities for a portion of the
Debentures (as that term is defined in the Trust Agreement) held by the Trust at
the Conversion Price specified in the Trust Agreement, and (ii) immediately
convert such Debentures on behalf of the undersigned, into Common Stock at the
Conversion Price specified in the Trust Agreement.
<PAGE> 73
The undersigned also hereby directs the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date:
----------------------
Number of Preferred Securities to be converted:
------------------------
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
- ----------------------------
- ----------------------------
- ----------------------------
(Sign exactly as your name appears
on the other side of this Capital
Security certificate) (for conversion of definitive
Preferred Securities only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number.
- ----------------------------
- ----------------------------
- ----------------------------
Signature Guarantee:*
------------------------------
- ----------------------------
*(Signature must be guaranteed by an "eligible guarantor institution" that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended)
2
<PAGE> 1
EXHIBIT 4.6
------------------------------------------------------------
TEXAS INDUSTRIES, INC.
to
-----------------------,
as Trustee
------------------------------------------------------------
INDENTURE
Dated as of __________, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...............................................2
SECTION 1.1. Definitions..................................................................................2
SECTION 1.2. Compliance Certificate and Opinions..........................................................9
SECTION 1.3. Forms of Documents Delivered to Trustee......................................................9
SECTION 1.4. Acts of Holders.............................................................................10
SECTION 1.5. Notices, Etc. to Trustee and Company........................................................12
SECTION 1.6. Notice to Holders; Waiver...................................................................12
SECTION 1.7. Conflict with Trust Indenture Act...........................................................13
SECTION 1.8. Effect of Headings and Table of Contents....................................................13
SECTION 1.9. Successors and Assigns......................................................................13
SECTION 1.10. Separability Clause........................................................................13
SECTION 1.11. Benefits of Indenture......................................................................13
SECTION 1.12. Governing Law..............................................................................13
SECTION 1.13. Non-Business Days..........................................................................13
ARTICLE II. DEBENTURE FORMS.....................................................................................14
SECTION 2.1. Forms Generally.............................................................................14
SECTION 2.2. Form of Face of Debenture...................................................................14
SECTION 2.3. Form of Reverse Debenture...................................................................17
SECTION 2.4. Additional Provisions Required in Global Debenture..........................................20
SECTION 2.5. Form of Trustee's Certificate of Authentication.............................................20
SECTION 2.6. Form of Conversion Notice...................................................................21
ARTICLE III. DEBENTURES.........................................................................................22
SECTION 3.1. Title and Terms; Paying Agent...............................................................22
SECTION 3.2. Denominations...............................................................................23
SECTION 3.3. Execution, Authentication, Delivery and Dating..............................................23
SECTION 3.4. Temporary Debentures........................................................................24
SECTION 3.5. Registration, Transfer and Exchange.........................................................24
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Debentures............................................26
SECTION 3.7. Payment of Interest; Interest Rights Preserved..............................................27
SECTION 3.8. Persons Deemed Owners.......................................................................28
SECTION 3.9. Cancellation................................................................................28
SECTION 3.10. Computation of Interest....................................................................29
SECTION 3.11. Deferrals of Interest Payment Dates........................................................29
SECTION 3.12. Right of Set-Off...........................................................................30
SECTION 3.13. Agreed Tax Treatment.......................................................................30
</TABLE>
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<TABLE>
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SECTION 3.14. Shortening or Extension of Stated Maturity.................................................30
SECTION 3.15. CUSIP Numbers..............................................................................31
ARTICLE IV. SATISFACTION AND DISCHARGE..........................................................................31
SECTION 4.1. Satisfaction and Discharge of Indenture.....................................................31
SECTION 4.2. Application of Trust Money..................................................................32
ARTICLE V. REMEDIES.............................................................................................32
SECTION 5.1. Events of Default...........................................................................32
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment..........................................33
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.............................34
SECTION 5.4. Trustee May File Proofs of Claim............................................................35
SECTION 5.5. Trustee May Enforce Claims Without Possession of Debentures.................................36
SECTION 5.6. Application of Money Collected..............................................................36
SECTION 5.7. Limitation on Suits.........................................................................36
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest;
Direct Action by Holders of Preferred Securities..................................37
SECTION 5.9. Restoration of Rights and Remedies..........................................................37
SECTION 5.10. Rights and Remedies Cumulative.............................................................38
SECTION 5.11. Delay or Omission Not Waiver...............................................................38
SECTION 5.12. Control by Holders.........................................................................38
SECTION 5.13. Waiver of Past Defaults....................................................................38
SECTION 5.14. Undertaking for Costs......................................................................39
ARTICLE VI. TRUSTEE.............................................................................................40
SECTION 6.1. Certain Duties and Responsibilities.........................................................40
SECTION 6.2. Notice of Defaults..........................................................................41
SECTION 6.3. Certain Rights of Trustee...................................................................41
SECTION 6.4. Not Responsible for Recitals or Issuance of Debentures......................................42
SECTION 6.5. May Hold Debentures.........................................................................42
SECTION 6.6. Money Held in Trust.........................................................................42
SECTION 6.7. Compensation and Reimbursement..............................................................43
SECTION 6.8. Disqualification; Conflicting Interests.....................................................43
SECTION 6.9. Corporate Trustee Required; Eligibility.....................................................43
SECTION 6.10. Resignation and Removal; Appointment of Successor..........................................44
SECTION 6.11. Acceptance of Appointment by Successor.....................................................45
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business................................46
SECTION 6.13. Preferential Collection of Claims Against Company..........................................46
SECTION 6.14. Appointment of Authenticating Agent........................................................46
</TABLE>
ii
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<TABLE>
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<S> <C>
ARTICLE VII. HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY..................................................47
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders...................................47
SECTION 7.2. Preservation of Information, Communications to Holders......................................48
SECTION 7.3. Reports by Trustee..........................................................................48
SECTION 7.4. Reports by Company..........................................................................48
ARTICLE VIII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..............................................49
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms........................................49
SECTION 8.2. Successor Corporation Substituted...........................................................50
ARTICLE IX. SUPPLEMENTAL INDENTURES.............................................................................50
SECTION 9.1. Supplemental Indentures without Consent of Holders..........................................50
SECTION 9.2. Supplemental Indentures with Consent of Holders.............................................51
SECTION 9.3. Execution of Supplemental Indentures........................................................52
SECTION 9.4. Effect of Supplemental Indentures...........................................................53
SECTION 9.5. Conformity with Trust Indenture Act.........................................................53
SECTION 9.6. Reference in Debentures to Supplemental Indentures..........................................53
ARTICLE X. COVENANTS............................................................................................53
SECTION 10.1. Payment of Principal, Premium and Interest.................................................53
SECTION 10.2. Maintenance of Office or Agency............................................................53
SECTION 10.3. Money for Debenture Payments to be Held in Trust...........................................54
SECTION 10.4. Statement as to Compliance.................................................................55
SECTION 10.5. Waiver of Certain Covenants................................................................55
SECTION 10.6. Payment of Trust Costs and Expenses........................................................56
SECTION 10.7. Additional Covenants.......................................................................56
ARTICLE XI. REDEMPTION OF SECURITIES............................................................................57
SECTION 11.1. Applicability of Article...................................................................57
SECTION 11.2. Election to Redeem; Notice to Trustee......................................................57
SECTION 11.3. Selection of Debentures to be Redeemed.....................................................57
SECTION 11.4. Notice of Redemption.......................................................................58
SECTION 11.5. Deposit of Redemption Price................................................................58
SECTION 11.6. Payment of Debentures Called for Redemption................................................59
SECTION 11.7. Right of Redemption of Debentures..........................................................59
ARTICLE XII. CONVERSION OF SECURITIES...........................................................................59
SECTION 12.1. Conversion Rights..........................................................................59
</TABLE>
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<TABLE>
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SECTION 12.2. Conversion Procedures......................................................................60
SECTION 12.3. Conversion Price Adjustments...............................................................62
SECTION 12.4. Reclassification, Consolidation, Merger or Sale of Assets..................................66
SECTION 12.5. Notice of Adjustments of Conversion Price..................................................66
SECTION 12.6. Prior Notice of Certain Events.............................................................67
SECTION 12.7. Certain Defined Terms......................................................................67
SECTION 12.8. Dividend or Interest Reinvestment Plans....................................................68
SECTION 12.9. Certain Additional Rights..................................................................68
SECTION 12.10. Trustee Not Responsible for Determining Conversion Price or Adjustments...................69
ARTICLE XIII. SUBORDINATION OF SECURITIES.......................................................................69
SECTION 13.1. Debentures Subordinate to Senior Debt......................................................69
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc.............................................70
SECTION 13.3. Prior Payment to Senior Debt Upon Acceleration of Debentures...............................71
SECTION 13.4. No Payment When Senior Debt in Default.....................................................71
SECTION 13.5. Payment Permitted if no Default............................................................72
SECTION 13.6. Subrogation to Rights of Holders of Senior Debt............................................72
SECTION 13.7. Provisions Solely to Define Relative Rights................................................72
SECTION 13.8. Trustee to Effectuate Subordination........................................................73
SECTION 13.9. No Waiver of Subordination Provisions......................................................73
SECTION 13.10. Notice to Trustee.........................................................................74
SECTION 13.11. Reliance on Judicial Order or Certificate of Liquidating Agent............................74
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt..........................................75
SECTION 13.13. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's
Rights............................................................................75
SECTION 13.14. Article Applicable to Paying Agents.......................................................75
SECTION 13.15. Certain Conversions or Exchanges Deemed Payment...........................................75
SECTION 13.16. Trust Funds Not Subordinated..............................................................75
</TABLE>
iv
<PAGE> 6
EXHIBIT 4.6
Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 317
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1990, are a part of and govern the Indenture whether
or not physically contained therein) and the Indenture, dated as of __________,
1998.
<TABLE>
<CAPTION>
Trust Indenture Act Selection Indenture Selection
- ----------------------------- -------------------
<S> <C>
Section 310 (a)(1), (2) and (5)...................................................... 6.9
(a)(3)................................................................... Not Applicable
(a)(4)................................................................... Not Applicable
(b)...................................................................... 6.8, 6.10
(c)...................................................................... Not Applicable
Section 311 (a)...................................................................... 6.13(a)
(b)...................................................................... 6.13(b)
(b)(2)................................................................... 7.3(a)
Section 312 (a)...................................................................... 7.1, 7.2(a)
(b)...................................................................... 7.2(b)
(c)...................................................................... 7.2(c)
Section 313 (a)...................................................................... 7.3(a)
(b)...................................................................... 7.3(b)
(c)...................................................................... 7.3(a)
(d)...................................................................... 7.3(b)
Section 314 (a)(1), (2) and (3)...................................................... 7.4
(a)(4)................................................................... 10.5
(b)...................................................................... Not Applicable
(c)(1)................................................................... 1.2
(c)(2)................................................................... 1.2
(c)(3)................................................................... Not Applicable
(d)...................................................................... Not Applicable
(e)...................................................................... 1.2
(f)...................................................................... Not Applicable
Section 315 (a)...................................................................... 6.1(a)
(b)...................................................................... 6.2, 7.3(a)(6)
(c)...................................................................... 6.1(b)
(d)...................................................................... 6.1(c)
(d)(1)................................................................... 6.1(a)(1)
(d)(2)................................................................... 6.1(c)(2)
(d)(3)................................................................... 6.1(c)(3)
(e)...................................................................... 5.14
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
Trust Indenture Act Selection Indenture Selection
- ----------------------------- -------------------
<S> <C>
Section 316 (a)...................................................................... 1.1
(a)(1)(A)................................................................ 5.12
(a)(1)(B)................................................................ 5.13
(a)(2)................................................................... Not Applicable
(b)...................................................................... 5.8
(c)...................................................................... 1.4(f)
Section 317 (a)(1)................................................................... 5.3
(a)(2)................................................................... 5.4
(b)...................................................................... 10.3
Section 318 (a)...................................................................... 1.7
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Junior Subordinated Indenture.
<PAGE> 8
INDENTURE, dated as of __________, 1998 between TEXAS INDUSTRIES, INC.,
a Delaware corporation (the "Company") having its principal office at 1341 West
Mockingbird Lane, Dallas, Texas 75247-6913, and __________, a __________
corporation, as Trustee (the "Trustee").
RECITALS
A. For its lawful corporate purposes, the Company has duly authorized
the execution and delivery of this Indenture to provide for the issuance of
securities to be known as its _____% Convertible Subordinated Debentures due
2028 (the "Debentures"), the form and substance of such Debentures and the
terms, provisions and conditions thereof to be set forth as provided in this
Indenture.
B. TXI Capital Trust I, a Delaware statutory business trust (the
"Trust"), has offered to the public $_____ aggregate liquidation amount of
preferred interests in such Trust (the "Preferred Securities") and proposes to
invest the proceeds from such offering, together with the proceeds of the
issuance and sale by the Trust to the Company of $_____ aggregate liquidation
amount of common interests in such Trust (the "Common Securities" and
collectively with the Preferred Securities, the "Trust Securities"), in $_____
aggregate principal amount of the Debentures.
C. The Company has requested that the Trustee execute and deliver this
Indenture.
D. All requirements necessary to make this 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, have been performed, and the execution and delivery of this
Indenture have been duly authorized in all respects.
E. To provide the terms and conditions upon which the Debentures are to
be authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture.
F. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of
the premises and the purchase of the Debentures by the Holders (as defined
herein) thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all of the Holders of the Debentures, as follows:
<PAGE> 9
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) All other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder means such accounting principles
which are generally accepted at the date or time of such computation; provided
that when two or more principles are so generally accepted, it means that set of
principles consistent with those in use by the Company; and
(4) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Debentures the payment of which has not been made on the
applicable Interest Payment Date and which shall accrue at the rate of _____%
per annum compounded quarterly.
"Additional Taxes" means the sum of any additional taxes, duties and
other governmental charges to which the Trust has become subject from time to
time as a result of a Tax Event.
"Administrative Trustee" means each Person identified as an
"Administrative Trustee" in the Trust Agreement, solely in such Person's
capacity as Administrative Trustee of the Trust under such Trust Agreement and
not in such Person's individual capacity, or any successor administrative
trustee appointed as therein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, the Trust shall not be
deemed to be an Affiliate of the Company. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
2
<PAGE> 10
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Debentures.
"Board of Directors" means either the board of directors of the Company
or any committee of the board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in The City of New York or the State of
Delaware are authorized or required by law or executive order to remain closed.
"Closing Prices" has the meaning specified in Section 12.7(a).
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in the Recitals of this
Indenture.
"Common Stock" means the common stock, par value $1.00 per share, of
the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman of the Board
of Directors, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Conversion Agent" means the Person appointed to act on behalf of the
holders of Preferred Securities in effecting the conversion of Preferred
Securities to Debentures and Debentures to Common Stock as and in the manner set
forth it the Trust Agreement and this Indenture.
"Conversion Price" has the meaning specified in Section 12.1.
"Conversion Request" means (a) the irrevocable request to be given by a
Holder to the Conversion Agent directing the Conversion Agent to convert the
Holder's Debenture into shares of Common Stock, and (b) the irrevocable request
to be given by a holder of Preferred Securities
3
<PAGE> 11
to the Conversion Agent directing the Conversion Agent to exchange such
Preferred Securities for Debentures and to convert such Debentures into Common
Stock on behalf of such holder.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which at the date hereof is __________.
"Corporation" includes a corporation, association, company, joint-stock
company or business trust.
"Current Market Price" has the meaning specified in Section 12.3(f).
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent: (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) every
obligation of such Person for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another Person and all dividends
of another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable for, directly or indirectly, as obligor
or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to the Debentures issuable or issued
in whole or in part in the form of one or more Global Debentures, the Person
designated as Depositary by the Company pursuant to this Indenture or any
successor thereto.
"Distributions," with respect to the Trust Securities, means amounts
payable in respect of such Trust Securities as provided in the Trust Agreement
and referred to therein as "Distributions."
"Dollar" means the currency of the United States of America that, as at
the time of payment, is legal tender for the payment of public and private
debts.
"Event of Default" has the meaning specified in Article V.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4(f).
4
<PAGE> 12
"Extension Period" has the meaning specified in Section 3.11.
"Global Debenture" means a Debenture in the form prescribed in Section
2.4 evidencing all or part of the Debentures, issued to the Depositary or its
nominee, and registered in the name of such Depositary or its nominee.
"Guarantee," with respect to the Trust Securities, means the guarantee
by the Company of Distributions on such Trust Securities to the extent provided
in the Guarantee Agreement.
"Guarantee Agreement," with respect to the Trust Securities, means the
Guarantee Agreement, dated as of __________, 1998, between the Company and
__________, as amended from time to time.
"Holder" means a Person in whose name a Debenture is registered in the
Debenture Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Debentures.
"Junior Subordinated Payment" has the meaning specified in Section
13.2.
"Maturity" when used with respect to the Debentures means the date on
which the principal of the Debentures becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"NYSE" has the meaning specified in Section 12.3(f).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Date" means __________, 1998.
"Outstanding" means, as of the date of determination, all Debentures
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
5
<PAGE> 13
(ii) Debentures for whose payment or redemption price money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Debentures; and
(iii) Debentures in substitution for or in lieu of which other
Debentures have been authenticated and delivered or which have been paid
pursuant to Section 3.6, unless proof satisfactory to the Trustee is presented
that any such Debentures are held by Holders in whose hands such Debentures are
valid, binding and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Debentures have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Debentures which the Trustee actually knows to be so
owned shall be so disregarded. Debentures so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Debentures and that the pledgee is not the Company or any other obligor upon the
Debentures or any Affiliate of the Company or such other obligor. Upon the
written request of the Trustee, the Company promptly shall furnish to the
Trustee an Officers' Certificate listing and identifying all Debentures, if any,
known by the Company to be owned or held by or for the account of the Company or
any other obligor on the Debentures or any Affiliate of the Company or such
obligor, and, subject to the provisions of Section 6.1, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Debentures not listed therein
are Outstanding for the purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of, premium, if any, or interest on the Debentures
on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Debentures, the place or
places where the principal of, premium, if any, and interest on the Debentures
are payable pursuant to Section 3.11.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.6 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"Preferred Securities" has the meaning specified in the Recitals of
this Indenture.
"Proceeding" has the meaning specified in Section 13.2.
6
<PAGE> 14
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the Trust Agreement, solely in its
capacity as Property Trustee of such Trust under such Trust Agreement and not in
its individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as therein provided.
"Purchased Shares" has the meaning specified in Section 12.3(e).
"Redemption Date," when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date means (i) in the case of Debentures represented by one or more Global
Debentures, the Business Day next preceding such Interest Payment Date and (ii)
in the case of Debentures not represented by one or more Global Debentures, the
date which is 15 days next preceding such Interest Payment Date (whether or not
a Business Day).
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
"Rights Plan" means a plan of the Company, if any, providing for the
issuance by the Company to all holders of Common Stock of rights entitling the
holders thereof to subscribe for or purchase shares of Common Stock or any class
or series of preferred stock of the Company, which rights (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and (iii)
are also issued in respect of future issuances of Common Stock, in each case
until the occurrence of a specified event or events.
"Debentures" or "Debenture" has the meaning specified in the Recitals
to this Indenture.
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of, premium, if any, and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt of the
Company, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Debentures or to other
Debt which is pari passu with, or subordinated to, the Debentures, provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Company which, when incurred and without respect to any election under Section
1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the
Company, (b) any Debt of the Company to any of its Subsidiaries, (c) Debt to any
employee of the Company, (d) Debt which by its terms is subordinated to trade
accounts payable or accrued liabilities arising in the ordinary course of
business to the extent that payments made to the holders of such Debt by the
holders of
7
<PAGE> 15
the Debentures as a result of the subordination provisions of this Indenture
would be greater than such payments otherwise would have been (absent giving
effect to this clause (d)) as a result of any obligation of such holders of such
Debt to pay amounts over to the obligees on such trade accounts payable or
accrued liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject, and (e) the Debentures.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Debenture or any
installment of principal thereof or interest thereon means the date specified
pursuant to the terms of such Debenture as the date on which the principal of
such Debenture or such installment of interest is due and payable, in the case
of such principal, as such date may be shortened or extended as provided
pursuant to the terms of such Debenture and this Indenture.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For purposes of this definition, "voting stock" means stock which
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel (as
defined in the Trust Agreement) experienced in such matters to the effect that,
as a result of any amendment to, or change (including any announced proposed
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which proposed change, pronouncement or decision is announced on or after the
date of issuance of the Preferred Securities, there is more than an
insubstantial risk that: (i) the Trust is, or will be within 90 days of the date
of such Opinion of Counsel, subject to United States federal income tax with
respect to income received or accrued on the Debentures; (ii) interest payable
by the Company on the Debentures is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by the Company, in whole or in part,
for United States federal income tax purposes; or (iii) such Trust is, or will
be within 90 days of the date of such Opinion of Counsel, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
"Trading Day" has the meaning specified in Section 12.7(b).
"Trust" has the meaning specified in the second recital of this
Indenture.
"Trust Agreement" means the Amended and Restated Trust Agreement
between the Company, as depositor, Kenneth R. Allen, Barry L. Clark and James M.
McCraw, as Administrative Trustees, First Chicago Delaware Inc. as Delaware
Trustee and __________, as Property Trustee, as amended from time to time.
8
<PAGE> 16
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
ss. 77aaa-77bbb), as amended and as in effect on the date as of this Indenture,
except as provided in Section 9.5.
"Trust Securities" has the meaning specified in the Recitals of this
Indenture.
"Vice President," when used with respect to the Company means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
SECTION 1.2. COMPLIANCE CERTIFICATE AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company will furnish to
the Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants, compliance with
which constitute a condition precedent), if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.5) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made or caused to be made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.3. FORMS OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the
9
<PAGE> 17
opinion of, only one such Person, or that they be so certified or covered by
only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer or counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel rendering such Opinion of Counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent or
proxy duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
is or are delivered to the Trustee, and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent or proxy shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section 1.4.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a Person acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
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(d) The ownership of Debentures shall be proved by the Debenture
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Debenture shall bind every future
Holder of the same Debenture and the Holder of every Debenture issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Debenture.
(f) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Debentures entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders of Debentures, provided that the Company may not set a record date for,
and the provisions of this paragraph shall not apply with respect to, the giving
or making of any notice, declaration, request or direction referred to in the
next paragraph. If any record date is set pursuant to this paragraph, the
Holders of the relevant Outstanding Debentures on such record date, and no other
Holders, shall be entitled to take the relevant action, whether or not such
Holders remain Holders after such record date, provided that no such action
shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of the relevant
Outstanding Debentures on such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be canceled and of no effect), and nothing in this paragraph shall
be construed to render ineffective any action taken by Holders of the requisite
principal amount of the relevant Outstanding Debentures on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of the relevant Debentures in the manner
set forth in Section 1.6.
(g) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Debentures entitled to join in the giving
or making of (i) any Notice of Default, (ii) any declaration of acceleration
referred to in Section 5.2, (iii) any request to institute proceedings referred
to in Section 5.7(2) or (iv) any direction referred to in Section 5.12. If any
record date is set pursuant to this paragraph, the Holders of the Outstanding
Debentures on such record date shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain Holders
after such record date, provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of the Outstanding Debentures on such record
date. Nothing in this paragraph shall be construed to prevent the Trustee from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be canceled and of no
effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite principal amount of the Outstanding
Debentures on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Trustee, at the
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Company's expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Company in
writing and to each Holder of the Debentures in the manner set forth in Section
1.6.
(h) With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of the Outstanding Debentures in the manner set
forth in Section 10.6 on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section 1.4, the party hereto which set such record date shall be deemed
to have initially designated the 180th day after such record date as the
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this Section 1.4(h). Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
(i) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any Debenture may do so with regard to all
or any part of the principal amount of such Debenture or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 1.5. NOTICES, ETC. TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Preferred Securities or
the Company shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, or
(2) the Company by the Trustee, any Holder or any holder of Preferred
Securities shall be sufficient for every purpose hereunder (except as otherwise
provided in Section 5.1) if in writing and mailed, first class, postage prepaid,
to the Company addressed to it at the address of its principal office specified
in the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 1.6. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at the address of such Holder as it appears in the Debenture
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where
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this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
SECTION 1.7. CONFLICT WITH TRUST INDENTURE ACT.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
SECTION 1.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.9. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. SEPARABILITY CLAUSE.
In case any provision of this Indenture or in the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Debentures, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Debt, the Holders of the Debentures and, to the
extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and 9.2,
the holders of Preferred Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES THEREOF.
SECTION 1.13. NON-BUSINESS DAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debenture shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or the Debentures) payment of principal of,
premium, if any, and interest thereon need
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not be made on such date, but may be made on the next succeeding Business Day
(and no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be, until such
next succeeding Business Day) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day (in each case with the same force and effect as if made
on the Interest Payment Date or Redemption Date or at the Stated Maturity).
ARTICLE II.
DEBENTURE FORMS
SECTION 2.1. FORMS GENERALLY.
The Debentures and the Trustee's certificate of authentication shall be
in substantially the forms set forth in this Article II, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with applicable tax laws or the rules of any securities
exchange or automated quotation system on which the Debentures may be listed or
traded or as may, consistently herewith, be determined by the officers executing
such Debentures, as evidenced by their execution of the Debentures.
The definitive Debentures shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods, if required by any
securities exchange or automated quotation system on which the Debentures may be
listed or traded, on a steel engraved border or steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
or automated quotation system on which the Debentures may be listed or traded,
all as determined by the officers executing such Debentures, as evidenced by
their execution of such Debentures.
SECTION 2.2. FORM OF FACE OF DEBENTURE.
TEXAS INDUSTRIES, INC. CUSIP _____
_____% Convertible Subordinated Debentures
No. _____ $_____
TEXAS INDUSTRIES, INC., a corporation organized and existing under the
laws of the state of Delaware (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 __________, 2028; provided that the Company,
subject to certain conditions set forth in Section 3.14 of the Indenture, may
shorten the Stated Maturity of the principal of this Debenture to a date not
earlier than __________, 2001. The Company further promises to pay interest on
said principal sum from __________, 1998 or from the most recent interest
payment date (each such date, an "Interest Payment Date") on which interest has
been paid or duly provided for,
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quarterly (subject to deferral as set forth herein) in arrears on March 31, June
30, September 30 and December 31 of each year, commencing _____________, 1998,
at the rate of _____% per annum, until the principal hereof shall have become
due and payable, plus Additional Interest, if any, until the principal hereof is
paid or duly provided for or made available for payment and on any overdue
principal 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 rate of _____% per annum, compounded quarterly. The amount of
interest payable for any period shall be computed on the basis of twelve 30-day
months and a 360-day year. The amount of interest payable for any partial period
shall be computed on the basis of the number of days elapsed in a 360-day year
of twelve 30-day months. In the event that any date on which interest is payable
on this Debenture is not a Business Day, then a payment of the interest payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date the payment was originally payable.
A "Business Day" shall mean any day other than (i) a Saturday or Sunday or (ii)
a day on which banking institutions in The City of New York or the State of
Delaware are authorized or required by law or executive order to remain closed.
The interest installment so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall, as provided in the Indenture, be paid to the
Person in whose name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the Regular Record Date for such interest
installment, which shall be, in the case of Debentures represented by one or
more Global Debentures, the Business Day next preceding such Interest Payment
Date and, in the case of Debentures not represented by one or more Global
Debentures, the date which is 15 days next preceding such Interest Payment Date
(whether or not a Business Day). Any such interest installment not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Debentures
not less than ten days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the Debentures may be
listed or traded, and upon such notice as may be required by such exchange or
self-regulatory organization, all as more fully provided in the Indenture.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right at any time during the term of this Debenture to
defer payment of interest on this Debenture, at any time or from time to time,
for up to 20 consecutive quarterly interest payment periods with respect to each
deferral period (each an "Extension Period"), during which Extension Periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date, and at the end of which the Company shall pay all
interest then accrued and unpaid (together with Additional Interest thereon to
the extent permitted by applicable law); provided, however, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Debenture; and provided, further, that during any such Extension Period, the
Company shall not, and shall not permit any Subsidiary of the Company to, (i)
declare or pay any dividends or
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distributions on or redeem, purchase, acquire or make a liquidation payment with
respect to, any of the Company's capital stock, (ii) make any payment of
principal of, premium, if any, or interest or on or repay, repurchase or redeem
any debt security of the Company that ranks pari passu with or junior in
interest to this Debenture or (iii) 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 this
Debenture (other than (a) dividends or distributions in the Company's capital
stock, (b) any declaration of a dividend in connection with the implementation
of a Rights Plan or the redemption or repurchase of any rights distributed
pursuant to a Rights Plan, (c) payments under the Guarantee with respect to this
Debenture and (d) purchases of Common Stock related to the issuance of Common
Stock or rights under any of the Company's benefit plans for its directors,
officers or employees, related to the issuance of Common Stock or rights under a
dividend reinvestment and stock purchase plan or related to the issuance of
Common Stock (or securities convertible or exchangeable for Common Stock) as
consideration in an acquisition transaction that was entered into prior to the
commencement of such Extension Period). Prior to the termination of any such
Extension Period, the Company may further defer the payment of interest,
provided that no Extension Period shall exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the principal of this Debenture. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period except at the end thereof.
The Company shall give the Holder of this Debenture and the Trustee notice of
its election to begin any Extension Period at least one Business Day prior to
the next succeeding Interest Payment Date on which interest on this Debenture
would be payable but for such deferral or, with respect to the Debentures issued
to the Trust, so long as such Debentures are held by the Trust, prior to the
earlier of (i) the next succeeding date on which Distributions on the Preferred
Securities would be payable but for such deferral or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or other applicable self-regulatory organization or to holders of such Preferred
Securities of the record date or the date such Distributions are payable, but in
any event not less than one Business Day prior to such record date.
Payment of principal of, premium, if any, and interest on this
Debenture shall be made at the office or agency of the Company maintained for
that purpose in the United States, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made, except in the case of Debentures in global form, (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Debenture Register or (ii) by wire transfer in immediately
available funds at such place and to such account as may be designated in
writing at least 15 days before the relevant Interest Payment Date by the Person
entitled thereto as specified in the Debenture Register.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, 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 behalf to take such actions as may be
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necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Debenture shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
TEXAS INDUSTRIES, INC.
By:
-----------------------------------------------
[President or Vice President]
Attest:
- --------------------------------------------------
[Secretary or Assistant Secretary]
SECTION 2.3. FORM OF REVERSE DEBENTURE.
This Debenture is one of a duly authorized issue of securities of the
Company, designated as its _____% Convertible Subordinated Debentures (the
"Debentures"), limited in aggregate principal amount to $_____, issued under an
Indenture, dated as of __________, 1998 (the "Indenture"), between the Company
and _______________, as Trustee (the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee,
the Company and the Holders of the Debentures, and of the terms upon which the
Debentures are, and are to be, authenticated and delivered. All capitalized
terms used but not defined in this Debenture that are defined in the Indenture
or in the Amended and Restated Trust Agreement, dated as of __________, 1998
(the "Trust Agreement"), among Texas Industries, Inc., as Depositor, and the
Trustees named therein, shall have the meanings assigned to them in the
Indenture or the Trust Agreement, as the case may be.
The Company may at any time, at its option, on or after __________,
2001, and subject to the terms and conditions of Article XI of the Indenture,
redeem this Debenture in whole at any time or in part from time to time, without
premium or penalty, at a redemption price equal to
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100% of the principal amount thereof plus accrued and unpaid interest, including
Additional Interest, if any, to the Redemption Date. Upon the occurrence and
during the continuation of a Tax Event, the Company may, at its option, at any
time within 90 days of the occurrence of such Tax Event redeem this Debenture,
in whole but not in part, subject to the provisions of Section 11.7 and the
other provisions of Article XI of the Indenture, at a redemption price equal to
100% of the principal amount thereof plus accrued and unpaid interest, including
Additional Interest, if any, to the Redemption Date. In the event of redemption
of this Debenture in part only, a new Debenture or Debentures for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Debenture upon compliance by the Company with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Debentures, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Debentures. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Debentures at the time
Outstanding, on behalf of the Holders of all Debentures, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Debenture shall be conclusive and binding upon such Holder and
upon all future Holders of this Debenture and of any Debenture issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Debenture.
As provided in and subject to the provisions of the Indenture, if an
Event of Default occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided that, in the case of the Debentures
issued to the Trust, if upon an Event of Default the Trustee or the Holders of
not less than 25% in principal amount of the Outstanding Debentures fail to
declare the principal of all the Debentures to be immediately due and payable,
the holders of at least 25% in aggregate Liquidation Amount of the Preferred
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee; and upon any such declaration the principal amount of
and the accrued interest, including Additional Interest, if any, on all the
Debentures shall become immediately due and payable, provided that the payment
of principal and interest, including Additional Interest, if any, on such
Debentures shall remain subordinated to the extent provided in Article XIII of
the Indenture.
The Holder of any Debenture has the right, exercisable at any time
after __________, 1998 and on or before 5:00 p.m. (New York City time) on the
Business Day immediately preceding the date of repayment of the Debentures,
whether at maturity or upon redemption (either at the option of the Company or
pursuant to a Tax Event), to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $50) into fully paid and
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nonassessable shares of Common Stock at an initial conversion rate of _____
shares of Common Stock for each $50 in aggregate principal amount of Debentures
(equal to a Conversion Price of $_____ per share of Common Stock), subject to
adjustment under certain circumstances. The number of shares issuable upon
conversion of a Debenture is determined by dividing the principal amount of the
Debenture to be converted by the Conversion Price in effect on the Conversion
Date. No fractional shares of Common Stock shall be issued upon conversion and,
in lieu thereof, a cash payment shall be made for any fractional interest. The
outstanding principal amount of any Debenture shall be reduced by the portion of
the principal amount thereof converted into shares of Common Stock.
To convert a Debenture, a Holder shall (i) complete and sign a
Conversion Request substantially in the form attached hereto, (ii) surrender the
Debenture to the Conversion Agent, (iii) furnish appropriate endorsements or
transfer documents if required by the Debenture Registrar or Conversion Agent
and (iv) pay any transfer or similar tax, if required. If a Conversion Request
is delivered on or after the Regular Record Date and prior to the subsequent
Interest Payment Date, the Holder shall be required to pay to the Company the
interest payment to be made on the subsequent Interest Payment Date, and shall
be entitled to receive the interest payable on the subsequent Interest Payment
Date, on the portion of Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. Notwithstanding the
foregoing, if, during an Extension Period, a notice of redemption is mailed
pursuant to Section 11.06 of the Indenture and a Debenture is converted after
such mailing but prior to the relevant Redemption Date, all accrued but unpaid
interest (including Additional Payments, if any) through the date of conversion
shall be paid to the holder of such Debenture on the Redemption Date. Except as
otherwise provided in the immediately preceding two sentences, in the case of
any Debenture which is converted, interest with a Stated Maturity which is after
the date of conversion of such Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest (including Additional
Payments, if any) on the Debentures being converted, which shall be deemed to be
paid in full. If any Debenture called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Debenture shall (subject to any right of the
Holder of such Debenture or any Predecessor Debenture to receive interest as
provided in the last paragraph of Section 3.07 of the Indenture and this
paragraph) be paid to the Company upon Company Request or, if then held by the
Company, shall be discharged from such trust.
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, premium, if any, and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Debenture
Register, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Debenture Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new
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Debentures, of authorized denominations and for the same aggregate principal
amount, shall be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Debentures are issuable only in registered form without coupons in
denominations of $50 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 2.4. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL DEBENTURE.
Any Global Debenture issued hereunder shall, in addition to the
provisions contained in Sections 2.2 and 2.3, bear a legend in substantially the
following form:
"This Debenture is a Global Debenture within the meaning of
the Indenture hereinafter referred to and is registered in the name of
a Depositary or a nominee of a Depositary. This Debenture is
exchangeable for Debentures registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances
described in the Indenture and may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary."
SECTION 2.5. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Debentures referred to in the within mentioned
Indenture.
Dated:
------------------------------------
as Trustee
By:
---------------------------------
Authorized Signatory
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SECTION 2.6. FORM OF CONVERSION NOTICE.
CONVERSION REQUEST
To: Texas Industries, Inc.
The undersigned owner of these Debentures hereby irrevocably elects to
convert these Debentures, or the portion below designated, into Common Stock of
the Company (the "Common Stock") in accordance with the terms of the Indenture
(the "Indenture"), dated as of __________, 1998, between the Company and
_______________, as Trustee.
The undersigned owner of these Debentures hereby directs the Conversion
Agent to convert such Debentures on behalf of the undersigned into Common Stock
at the Conversion Price specified in the Indenture. The undersigned owner of
these Debentures also hereby notifies the Conversion Agent that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, should be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: __________
Principal Amount of Debentures to be converted ($50 or integral multiples
thereof): _____________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
- -----------------------
- -----------------------
- -----------------------
(Sign exactly as your name appears on the other side of this Debenture) (for
conversion only)
Please print or type name and address, including zip code, and social security
or other identifying number:
- -----------------------
- -----------------------
- -----------------------
Signature Guarantee:*
-----------------------------------
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ARTICLE III.
DEBENTURES
SECTION 3.1. TITLE AND TERMS; PAYING AGENT.
The aggregate principal amount of Debentures which may be authenticated
and delivered under this Indenture is limited to $_____________ except for
Debentures authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Debentures pursuant to Section 3.4, 3.5, 3.6,
9.6 or 11.6 and except for any Debentures which, pursuant to the last paragraph
of Section 3.3, are deemed never to have been authenticated and delivered
hereunder.
The Debentures shall be known and designated as the "_____% Convertible
Subordinated Debentures" of the Company. Their Stated Maturity shall be
__________, 2028, or if the Company elects to accelerate the maturity date in
accordance with Section 5.2 hereof, such earlier date as the Company selects,
but in no event before __________, 2001.
The Debentures shall bear interest at the rate of _____% per annum,
from __________, 1998 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
quarterly (subject to deferral as set forth herein), in arrears, on March 31,
June 30, September 30 and December 31 of each year, commencing ____________,
1998 until the principal thereof is paid or made available for payment. Accrued
interest that is not paid on the applicable Interest Payment Date (even if
unpaid due to an extension of an interest payment period as set forth below in
this Section 3.1) shall bear Additional Interest on the amount thereof. In the
event that any date on which interest is payable on the Debentures is not a
Business Day, then a payment of the interest payable on such date shall be made
on the next succeeding day which is a Business Day (except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day) (and without any interest or other
payment in respect of any such delay), in each case with the same force and
effect as if made on the date the payment was originally payable.
The principal of, premium, if any, and interest on the Debentures shall
be payable at the office of the Paying Agent or Paying Agents as the Company may
designate for such purpose
- ------------------------------------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities and Exchange Act of 1934, as amended.
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from time to time, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made, except in the case of Global Debentures, (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Debenture Register or (ii) by transfer to an account maintained by the Person
entitled thereto as specified in the Debenture Register; provided that proper
transfer instructions have been received by the Regular Record Date.
The Company designates the Trustee as the initial Paying Agent with
respect to the Debentures. The Company may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or approve a change
in the office through which any Paying Agent acts pursuant to Section 10.2.
The Debentures shall be subordinated in right of payment to Senior Debt
as provided in Article XIII.
SECTION 3.2. DENOMINATIONS.
The Debentures shall be in registered form without coupons and shall be
issuable in denominations of $50 and any integral multiple thereof.
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Debentures shall be executed on behalf of the Company by its Chief
Executive Officer, President or one of its Vice Presidents under its corporate
seal reproduced or impressed thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Debentures
may be manual or facsimile. Debentures bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Debentures or did not hold such offices at the date of such Debentures.
The Debentures may contain such notations, legends or endorsements required by
law, stock exchange rule or usage. Each Debenture shall be dated the date of its
authentication by the Trustee.
A Debenture shall not be valid until manually authenticated by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture. Notwithstanding the foregoing, if any
Debenture shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Debenture to the
Trustee for cancellation as provided in Section 3.9, for all purposes of this
Indenture such Debenture shall be deemed never to have been authenticated and
delivered hereunder and shall not be entitled to the benefits of this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures executed by the Company to
the Trustee for authentication,
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together with a written order of the Company for the authentication and delivery
of such Debentures signed by its Chief Executive Officer, President or any Vice
President and its Treasurer or any Assistant Treasurer, and the Trustee in
accordance with such written order shall authenticate and deliver such
Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the form and terms thereof have been
established in conformity with the provisions of this Indenture.
The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture shall affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
Each Debenture shall be dated the date of its authentication.
SECTION 3.4. TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Debentures which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Debentures in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Debentures may determine, as
evidenced by their execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at the office
or agency of the Company designated for that purpose without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Debentures,
the Company shall execute and the Trustee shall authenticate and make available
for delivery in exchange therefor one or more definitive Debentures, of any
authorized denominations having the same Original Issue Date and Stated Maturity
and having the same terms as such temporary Debentures. Until so exchanged, the
temporary Debentures shall in all respects be entitled to the same benefits
under this Indenture as definitive Debentures.
SECTION 3.5. REGISTRATION, TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the "Debenture Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Debentures and of transfers of Debentures. The Trustee is hereby
appointed "Debenture Registrar" for the purpose of registering Debentures and
transfers of Debentures as herein provided.
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Upon surrender for registration of transfer of any Debenture at the
office or agency of the Company designated for that purpose the Company shall
execute, and the Trustee shall authenticate and make available for delivery, in
the name of the designated transferee or transferees, one or more new Debentures
of any authorized denominations, of a like aggregate principal amount, of the
same Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, of the same Original Issue Date and Stated Maturity and having the same
terms, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Debentures which the Holder making the exchange is entitled to
receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Debenture Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Debenture Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Debentures.
The provisions of clauses (1), (2), (3) and (4) below shall apply only
to Global Debentures:
(1) Each Global Debenture authenticated under this Indenture
shall be registered in the name of the Depositary designated for such
Global Debenture or a nominee thereof and delivered to such Depositary
or a nominee thereof or custodian therefor, and each such Global
Debenture shall constitute a single Debenture for all purposes of this
Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Debenture may be exchanged in whole or in part for Debentures
registered, and no transfer of a Global Debenture in whole or in part
may be registered, in the name of any Person other than the Depositary
for such Global Debenture or a nominee thereof unless (A) such
Depositary (i) has notified the Company that it is unwilling or unable
to continue as Depositary for such Global Debenture or (ii) has ceased
to be a clearing agency registered under the Exchange Act at a time
when the Depositary is required to be so registered to act as
depositary, in either case unless the Company has approved a successor
Depositary within 90 days, (B) there shall have occurred and be
continuing an
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Event of Default with respect to such Global Debenture or (C) the
Company in its sole discretion determines that such Global Debenture
shall be so exchangeable or transferable.
(3) Subject to clause (2) above, any exchange of a Global
Debenture for other Debentures may be made in whole or in part, and all
Debentures issued in exchange for a Global Debenture or any portion
thereof shall be registered in such names as the Depositary for such
Global Debenture shall direct.
(4) Every Debenture authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Debenture or any portion thereof, whether pursuant to this Section 3.5,
Section 3.4, 3.6, 9.6 or 11.6 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Debenture, unless such
Debenture is registered in the name of a Person other than the
Depositary for such Global Debenture or a nominee thereof.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section 3.5, (a) to issue, register the transfer of or
exchange any Debenture during a period beginning at the opening of business 15
days before the day of selection for redemption of Debentures pursuant to
Article XI and ending at the close of business on the day of mailing of notice
of redemption or (b) to register the transfer of or exchange any Debenture so
selected for redemption in whole or in part, except, in the case of any
Debenture to be redeemed in part, any portion thereof not to be redeemed.
SECTION 3.6. MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES.
If any mutilated Debenture is surrendered to the Trustee together with
such security or indemnity as may be required by the Company or the Trustee to
save each of them harmless, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a new
Debenture of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same interest rate as such mutilated
Debenture, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture and (ii) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Debenture has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
make available for delivery, in lieu of any such destroyed, lost or stolen
Debenture, a new Debenture of like tenor and principal amount, having the same
Original Issue Date and Stated Maturity and bearing the same interest rate as
such destroyed, lost or stolen Debenture and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
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Upon the issuance of any new Debenture under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section 3.6 in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Debenture which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date, shall be paid to the Person in
whose name that Debenture (or one or more Predecessor Debentures) is registered
at the close of business on the Regular Record Date for such interest payment,
except that, unless otherwise provided in the Debentures, interest payable on
the Stated Maturity of the principal of a Debenture shall be paid to the Person
to whom principal is paid. The initial payment of interest on any Debenture
which is issued between a Regular Record Date and the related Interest Payment
Date shall be payable as provided in such Debenture. At the option of the
Company, interest on any Debentures may be paid (i) by check mailed to the
address of the Person entitled thereto as it shall appear on the Debenture
Register or (ii) by wire transfer in immediately available funds at such place
and to such account as designated by the Person entitled thereto as specified in
the Debenture Register.
Any interest on any Debenture which is payable, but is not timely paid
or duly provided for, on any Interest Payment Date ("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
may be paid by the Company, at its election in each case, as provided in clause
(1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Debenture 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
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Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not 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 Holder of a Debenture at the address of such Holder as it appears
in the Debenture Register not less than ten days prior to such Special
Record Date. The Trustee may, in its discretion, in the name and at the
expense of the Company, cause a similar notice to be published at least
once in a newspaper, customarily published in the English language on
each Business Day and of general circulation in New York City, but such
publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the
Debentures may be listed or traded and, upon such notice as may be
required by such exchange (or by the Trustee if the Debentures are not
listed), if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such payment shall be deemed
practicable by the Trustee.
Any interest on any Debenture which is deferred or extended pursuant to
Section 3.11 shall not be Defaulted Interest for the purposes of this Section
3.7.
Subject to the foregoing provisions of this Section 3.7, each Debenture
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debenture shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Debenture.
SECTION 3.8. PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Debenture is registered on the Debenture
Register as the owner of such Debenture for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 3.7) interest on such
Debenture and for all other purposes whatsoever, whether or not such Debenture
be overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 3.9. CANCELLATION.
All Debentures surrendered for payment, redemption, registration of
transfer, conversion or exchange shall, if surrendered to any Person other than
the Trustee, be delivered to the
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Trustee, and any such Debentures and Debentures surrendered directly to the
Trustee for any such purpose shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Debentures previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Debentures so delivered shall be promptly canceled by
the Trustee. No Debentures shall be authenticated in lieu of or in exchange for
any Debentures canceled as provided in this Section 3.9, except as expressly
permitted by this Indenture. All canceled Debentures shall be returned by the
Trustee to the Company and destroyed by the Company.
SECTION 3.10. COMPUTATION OF INTEREST.
Interest on the Debentures payable for any full quarterly period shall
be computed on the basis of a 360-day year of twelve 30-day months and interest
on the Debentures for any partial period shall be computed on the basis of the
number of days elapsed in a 360-day year of twelve 30-day months.
SECTION 3.11. DEFERRALS OF INTEREST PAYMENT DATES.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time during the term of the Debentures,
from time to time to defer the payment of interest on the Debentures for up to
20 consecutive quarterly interest payment periods with respect to each deferral
period (each, an "Extension Period"), during which Extension Periods the Company
shall have the right to make partial payments of interest on any Interest
Payment Date. No Extension Period shall end on a date other than an Interest
Payment Date. At the end of any such Extension Period the Company shall pay all
interest then accrued and unpaid on the Debentures (together with Additional
Interest thereon, if any, at the rate of _____%, to the extent permitted by
applicable law) to the Persons in whose names the Debentures are registered at
the close of business on the Regular Record Date with respect to the Interest
Payment Date at the end of such Extension Period; provided, however, that no
Extension Period shall extend beyond the Stated Maturity of the principal of the
Debentures; and provided, further, that during any such Extension Period, the
Company shall not, and shall not permit any Subsidiary to, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock, (ii)
make any payment of principal of, premium, if any, or interest on or repay,
repurchase or redeem any debt security of the Company that ranks pari passu with
or junior in interest to the Debentures or (iii) make any guarantee payments
with respect to any guarantee by the Company of the debt securities of any
Subsidiary of the Company that by their terms rank pari passu with or junior in
interest to the Debentures (other than (a) dividends or distributions in the
Company's capital stock, (b) any declaration of a dividend in connection with
the implementation of a Rights Plan, or the redemption or repurchase of any
rights distributed pursuant to a Rights Plan, (c) payments under the Guarantee
with respect to such Debenture and (d) purchases of Common Stock related to the
issuance of Common Stock or rights under any of the Company's benefit plans for
its directors, officers or employees, related to the issuance of Common Stock or
rights under a dividend reinvestment and stock purchase plan or related to the
issuance of Common Stock (or securities convertible or exchangeable for Common
Stock) as consideration in an acquisition transaction that was entered into
prior to the commencement of such Extension Period). Prior to the termination of
any such Extension Period,
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the Company may further defer the payment of interest, provided that no
Extension Period shall exceed 20 consecutive quarterly periods or extend beyond
the Stated Maturity of the principal of the Debentures. Upon termination of any
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Company may elect
to begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Company shall give the Holders of the Debentures and the Trustee written
notice of its election to begin any such Extension Period at least one Business
Day prior to the next succeeding Interest Payment Date on which interest on the
Debentures would be payable but for such deferral or, with respect to Debentures
issued to the Trust, so long as such Debentures are held by the Trust, prior to
the earlier of (i) the next succeeding date on which Distributions on the
Preferred Securities of the Trust would be payable but for such deferral or (ii)
the date the Administrative Trustees of the Trust are required to give notice to
any securities exchange or other applicable self-regulatory organization or to
holders of such Preferred Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date.
The Trustee shall promptly give notice, in the name and at the expense
of the Company, of the Company's election to begin any such Extension Period to
the Holders of the Outstanding Debentures.
SECTION 3.12. RIGHT OF SET-OFF.
Notwithstanding anything to the contrary in the Indenture, the Company
shall have the right to set-off any payment it is otherwise required to make
thereunder in respect of any Debenture to the extent the Company has theretofore
made, or is concurrently on the date of such payment making, a payment under the
Guarantee or under Section 5.8 of this Indenture.
SECTION 3.13. AGREED TAX TREATMENT.
Each Debenture issued hereunder shall provide that the Company and, by
its acceptance of a Debenture or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Debenture intend
that such Debenture constitutes indebtedness and agree to treat such Debenture
as indebtedness for United States federal, local and state tax purposes.
SECTION 3.14. SHORTENING OR EXTENSION OF STATED MATURITY.
The Company shall have the right to shorten the Stated Maturity of the
principal of the Debentures at any time to any date not earlier than the first
date on which the Company has the right to redeem the Debentures. In the event
that the Company elects to shorten or extend the Stated Maturity of the
Debentures, it shall give written notice to the Trustee, and the Trustee shall
give notice of such shortening or extension to the Holders, no less than 30 and
no more than 60 days prior to the effectiveness thereof.
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SECTION 3.15. CUSIP NUMBERS.
The Company in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Debentures or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Debentures, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the CUSIP numbers.
ARTICLE IV.
SATISFACTION AND DISCHARGE
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Debentures herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.6 and
(ii) Debentures for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(B) all such Debentures not theretofore delivered to the
Trustee for cancellation.
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year of the date of deposit, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of clause (B)(i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in the currency or currencies in which
the Debentures are payable sufficient to pay and discharge
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the entire indebtedness on such Debentures not theretofore delivered to
the Trustee for cancellation, for principal, premium, if any and
interest (including any Additional Interest) to the date of such
deposit (in the case of Debentures which have become due and payable)
or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to Section 4.2(1)(B), the
obligations of the Trustee under Section 4.2 and the last paragraph of Section
10.3 shall survive.
SECTION 4.2. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Debentures
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal, premium, if any,
and interest for the payment of which such money has been deposited with or
received by the Trustee.
ARTICLE V.
REMEDIES
SECTION 5.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest upon the Debentures,
including any Additional Interest in respect thereof, when it becomes due and
payable, and continuance of such default for a period of 30 days (subject to the
deferral of any interest payment date in the case of an Extension Period);
(2) default in the payment of the principal of or premium, if any, on
the Debentures at their Maturity;
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(3) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Company in this Indenture (other than a covenant
or warranty a default in the performance of which or the breach of which is
elsewhere in this Section 5.1 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 principal amount of the
Outstanding Debentures a written notice specifying such default or breach and
requiring it to be remedied;
(4) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(5) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its' property, or the
making by it of an assignment for the benefit for creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due and
its willingness to be adjudicated a bankrupt, or the taking of corporate action
by the Company in furtherance of any such action.
SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or 5.1(5)) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided that, in the case of the Debentures
issued to the Trust, if, upon an Event of Default, the Trustee or the Holders of
not less than 25% in principal amount of the Outstanding Debentures fail to
declare the principal amount of all the Debentures to be immediately due and
payable, the holders of at least 25% in aggregate liquidation amount of the
corresponding Preferred Securities then outstanding shall have such right by a
notice in writing to the Company and the Trustee; and upon any such declaration
such principal amount (or specified portion thereof) of and the accrued interest
(including any Additional Interest) on all the Debentures shall become
immediately due and payable. Payment of principal and interest (including any
Additional Interest) on such Debentures shall remain subordinated to the extent
provided in Article XIII notwithstanding that such amount shall become
immediately due and payable as herein provided. If an Event of Default specified
in Section 5.1(4) or 5.1(5) occurs, the principal amount of all the Debentures
shall automatically,
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and without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article V
provided, the Holders of a majority in principal amount of the Outstanding
Debentures, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay:
(A) all overdue installments of interest (including any Additional
Interest) on all of the Debentures,
(B) the principal of and premium, if any, on any Debentures which
have become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Debentures, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of the principal
of Debentures which has become due solely by such acceleration, have been cured
or waived as provided in Section 5.13;
provided that, in the case of Debentures held by the Trust, if the Holders of at
least a majority in principal amount of the Outstanding Debentures fail to
rescind and annul such declaration and its consequences, the holders of a
majority in aggregate Liquidation Amount (as defined in the Trust Agreement) of
the Preferred Securities then outstanding shall have such right by written
notice to the Company and the Trustee, subject to the satisfaction of the
conditions set forth in Clauses (1) and (2) above of this Section 5.2.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.
The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Debenture when such interest becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of and premium, if
any, on any Debenture at the Maturity thereof,
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the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Debentures, the whole amount then due and payable
on such Debentures for principal, premium, if any, and interest (including any
Additional Interest); and, in addition thereto, all amounts owing the Trustee
under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the amounts so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Debentures and collect the
money adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Debentures, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Debentures or the property of the Company or of such other obligor or their
creditors,
(a) the Trustee (irrespective of whether the principal of the
Debentures 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 on the Company for the payment of overdue principal, premium, if
any, or interest (including any Additional Interest)) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal, premium, if any, and interest (including any Additional
Interest) owing and unpaid in respect to the Debentures and to file
such other papers or documents as may be necessary or advisable and to
take any and all actions as are authorized under the Trust Indenture
Act in order to have the claims of the Holders and any predecessor to
the Trustee under Section 6.7 allowed in any such judicial proceedings;
and
(ii) in particular, the Trustee shall be authorized to collect
and receive any money or other property payable or deliverable on any
such claims and to distribute the same in accordance with Section 5.6;
and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee for
distribution in accordance with Section 5.6, and in the event that the
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Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it and any predecessor Trustee under
Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
DEBENTURES.
All rights of action and claims under this Indenture or the Debentures
may be prosecuted and enforced by the Trustee without the possession of any of
the Debentures or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 6.7, its agents and counsel, be for the
ratable benefit of the Holders of the Debentures in respect of which such
judgment has been recovered.
SECTION 5.6. APPLICATION OF MONEY COLLECTED.
Any money or property collected or to be applied by the Trustee
pursuant to this Article V shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money or
property on account of principal, premium, if any, or interest (including any
Additional Interest), upon presentation of the Debentures and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then due
and unpaid upon the Debentures for principal (and premium, if any), interest
(including any Additional Interest) and Additional Taxes, in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Debentures for principal, premium, if any, and interest (including any
Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. LIMITATION ON SUITS.
No Holder of any Debenture shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver, assignee, trustee, liquidator, sequestrator (or other
similar official) or for any other remedy hereunder, unless:
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(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Debentures shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of security or indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Debentures;
it being understood and intended that no one or more of the Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all Holders.
SECTION 5.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST; DIRECT ACTION BY HOLDERS
OF PREFERRED SECURITIES.
Notwithstanding any other provision in this Indenture, the Holder of
any Debenture shall have the right which is absolute and unconditional to
receive payment of the principal of, premium, if any, and (subject to Section
3.7) interest (including any Additional Interest) on such Debenture on the
respective Stated Maturities expressed in such Debenture (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Holder. In the case of Debentures held by the Trust, any holder of the
Preferred Securities shall have the right, upon the occurrence of an Event of
Default described in Section 5.1(1) or 5.1(2), to institute a suit directly
against the Company for enforcement of payment to such holder of principal of,
premium, if any, and (subject to Section 3.7) interest (including any Additional
Interest) on the Debentures having a principal amount equal to the aggregate
Liquidation Amount (as defined in the Trust Agreement) of such Preferred
Securities held by such holder.
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee, any Holder or any holder of Preferred Securities has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee, such Holder or such holder of
Preferred Securities, then and in every such case the Company, the Trustee, the
Holders and such holder of Preferred Securities shall, subject to any
determination in
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such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee, the
Holders and the holders of Preferred Securities shall continue as though no such
proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided in the last paragraph of Section 3.6, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee, any Holder of any Debenture or any
holder of any Preferred Security to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Trustee
or to the Holders and the right and remedy given to the holders of Preferred
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of Preferred
Securities, as the case may be.
SECTION 5.12. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Debentures shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow such direction if a Responsible Officer or
Officers of the Trustee shall, in good faith, determine that the proceeding so
directed would be unjustly prejudicial to the Holders not joining in any such
direction or would involve the Trustee in personal liability.
SECTION 5.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Debentures and, in the case of any Debentures issued to the Trust,
the holders of a majority in Liquidation
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Amount (as defined in the Trust Agreement) of Preferred Securities issued by the
Trust may waive any past default hereunder and its consequences, except a
default:
(1) in the payment of the principal of, premium, if any, or interest
(including any Additional Interest) on any Debenture (unless all Events of
Default, other than the non-payment of the principal of Debentures which has
become due solely by such acceleration, have been cured or annulled as provided
in Section 5.3 and the Company has paid or deposited with the Trustee a sum
sufficient to pay all overdue installments of interest (including any Additional
Interest) on all Debentures, the principal of and premium, if any, on any
Debentures which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures, and all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel), or
(2) in respect of a covenant or provision hereof which under Article IX
cannot be modified or amended without the consent of the Holder of each
Outstanding Debenture affected.
Any such waiver shall be deemed to be on behalf of the Holders of all
the Debentures or, in the case of a waiver by holders of Preferred Securities,
by all holders of Preferred Securities.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Debenture
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the 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 5.14 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder or group of Holders holding in
the aggregate more than 10% in principal amount of the Outstanding Debentures,
to any suit instituted pursuant to Section 5.8 by any holder or group of holders
holding in the aggregate more than 10% in aggregate Liquidation Amount (as
defined in the Trust Agreement) of Preferred Securities, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of,
premium, if any, or interest (including any Additional Interest) on any
Debenture on or after the respective Stated Maturities expressed in such
Debenture.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and
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covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE VI.
TRUSTEE
SECTION 6.1. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provisions hereof are specifically required to be
furnished to the 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) In case an Event of Default has occurred and is continuing, 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 person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that
(1) this subsection (c) shall not be construed to limit the
effect of subsection (a) of this Section 6.1;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) 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 Holders pursuant to Section 5.12 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
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(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.1.
SECTION 6.2. NOTICE OF DEFAULTS.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder, the Trustee shall transmit
by mail to all Holders of Debentures, as their names and addresses appear in the
Debenture Register, notice of such default, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of, premium, if any, or interest (including any
Additional Interest) on any Debenture, 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 Holders of Debentures; and provided, further, that, in the case
of any default of the character specified in Section 5.1(3), no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section 6.2, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default.
SECTION 6.3. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, 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 or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in
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respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Debenture or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the 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 Indenture.
SECTION 6.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES.
The Recitals contained herein and in the Debentures, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Debentures. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Debentures or the proceeds thereof.
SECTION 6.5. MAY HOLD DEBENTURES.
The Trustee, any Authenticating Agent, any Paying Agent, any Debenture
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Debentures and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Debenture
Registrar or such other agent.
SECTION 6.6. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
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SECTION 6.7. COMPENSATION AND REIMBURSEMENT.
The Company, as borrower, agrees
(1) to pay to the Trustee from time to time such compensation as shall
be agreed in writing between the Company and the Trustee for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the 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; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
and all loss, liability, damage, claim or expense (including the reasonable
compensation and the expenses and disbursements of its agents and counsel)
incurred without negligence or bad faith, arising out of or in connection with
the acceptance or administration of this trust or the performance of its duties
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. This indemnification shall survive the termination
of this Indenture.
To secure the Company's payment obligations in this Section 6.7, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Debentures on all money or property held or collected by the Trustee.
Such lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
SECTION 6.8. DISQUALIFICATION; CONFLICTING INTERESTS.
The Trustee shall be subject to the provisions of Section 310(b) of the
Trust Indenture Act. Nothing herein shall prevent the Trustee from filing with
the Commission the application referred to in the second to last paragraph of
said Section 310(b).
SECTION 6.9. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be:
(a) a corporation organized and doing business under the laws of the
United States of America or of any state or territory or the District of
Columbia, authorized under such laws to exercise corporate trust powers and
subject to supervision or examination by federal, state, territorial or District
of Columbia authority, or
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(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee pursuant to
a rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees, in either case having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section 6.9,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.9, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article VI.
Neither the Company nor any Person directly or indirectly controlling,
controlled by or under common control with the Company shall serve as Trustee.
SECTION 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Debentures, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after such
removal, the Trustee being removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Debenture for at least six months,
(2) the Trustee shall cease to be eligible under Section 6.9
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(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,
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then, in any such case, (i) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee or (ii) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Debenture for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Debentures
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Debenture for at least six months may,
subject to Section 5.14, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Debentures as their names and addresses appear in the Debenture Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee, every
such successor Trustee so appointed shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in Section 6.11(a).
(c) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article VI.
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SECTION 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article VI, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Debentures shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debentures so authenticated, and in case any
Debentures shall not have been authenticated, any successor to the Trustee may
authenticate such Debentures either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Debentures or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Debentures), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 6.14. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents which shall
be authorized to act on behalf of the Trustee to authenticate Debentures issued
upon original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 3.6. Debentures so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Wherever
reference is made in this Indenture to the authentication and delivery of
Debentures by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, or of any state
or territory or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by federal or state
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section 6.14 the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section 6.14, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section 6.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or
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consolidation to which such Authenticating Agent shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of an Authenticating Agent shall be the successor Authenticating Agent
hereunder, provided such corporation shall be otherwise eligible under this
Section 6.14, without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 1.6 to all Holders.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section 6.14.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.14.
If an appointment is made pursuant to this Section 6.14, the Debentures
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Debentures referred to in the within mentioned
Indenture.
Dated: /s/
---------------------------------------
As Trustee
By:
------------------------------------
As Authenticating Agent
By:
------------------------------------
As Authorized Officer
ARTICLE VII.
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company shall furnish or cause to be furnished to the Trustee:
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(a) semi-annually, not more than 15 days after January 15 and July 15
in each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such January 1 and July 1, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as Debenture Registrar.
SECTION 7.2. PRESERVATION OF INFORMATION, COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Debenture
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Debentures, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.3. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders 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
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
60 days after each May 15 following the date of this Indenture deliver to
Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Debentures are listed and with the Commission. The Company will promptly notify
the Trustee when any Debentures are listed on any stock exchange.
SECTION 7.4. REPORTS BY COMPANY.
The Company shall file with the Trustee and with the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided in the Trust
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Indenture Act; provided that any such information, documents or reports required
to be filed with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act shall be filed with the Trustee within 15 days after the same is
required to be filed with the Commission. Notwithstanding that the Company may
not be required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall continue to file with the
Commission and provide the Trustee with the annual reports and the information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of Trust
Indenture Act Section 314(a). Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
ARTICLE VIII.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust organized and existing
under the laws of the United States of America or any State or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of, premium, if any, and interest
(including any Additional Interest) on all the Debentures and the performance of
every covenant of this Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) in the case of Debentures held by the Trust, such consolidation,
merger, conveyance, transfer or lease is permitted under the Trust Agreement and
Guarantee and does not give rise to any breach or violation of the Trust
Agreement or Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and any such supplemental indenture complies with
this Article VIII and that all conditions precedent
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herein provided for relating to such transaction have been complied with; and
the Trustee, subject to Section 6.1, may rely upon such Officers' Certificate
and Opinion of Counsel as conclusive evidence that such transaction complies
with this Section 8.1.
SECTION 8.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
8.1, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; and in the event of any such conveyance,
transfer or lease the Company shall be discharged from all obligations and
covenants under the Indenture and the Debentures and may be dissolved and
liquidated.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the written order of such successor
Person instead of the Company and subject to all the terms, conditions and
limitations prescribed herein, the Trustee shall authenticate and shall make
available for delivery any Debentures which previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication
pursuant to such provisions and any Debentures which such successor Person
thereafter shall cause to be signed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. All the Debentures so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debentures had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Debentures thereafter to
be issued as may be appropriate.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form reasonably satisfactory
to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company contained
herein and in the Debentures;
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(2) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon the
Company;
(3) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
(4) to add any additional Events of Default;
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Outstanding Debenture created prior to the execution of such
supplemental indenture which is entitled to the benefit of such provision;
(6) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture, provided that such action pursuant to this clause (6)
shall not adversely affect the interest of the Holders in any material respect
or, in the case of the Debentures issued to the Trust and for so long as any of
the corresponding Preferred Securities issued by the Trust shall remain
outstanding, the holders of such Preferred Securities;
(7) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trust hereunder by more than one Trustee, pursuant to the requirements of
Section 6.11(b); or
(8) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act.
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debentures, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Debenture affected thereby,
(1) except to the extent permitted by Section 3.11 or as otherwise
specified as contemplated by Section 2.1 with respect to the deferral of the
payment of interest on the Debentures, change the Stated Maturity of the
principal of, or any installment of interest (including any Additional Interest)
on, any Debenture, or reduce the principal amount thereof or the rate of
interest thereon or reduce any premium payable upon the redemption thereof, or
change the place of payment where, or the coin or currency in which, any
Debenture or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on
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or after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date);
(2) reduce the percentage in principal amount of the Outstanding
Debentures, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture;
(3) modify any of the provisions of this Section 9.2, Section 5.13 or
Section 10.5, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Debenture affected thereby; or
(4) modify the provisions in Article XIII with respect to the
subordination of Outstanding Debentures in a manner adverse to the Holders;
provided, further, that, in the case of Debentures issued to the Trust, so long
as any of the Preferred Securities issued by the Trust remains outstanding, (i)
no such amendment shall be made that adversely affects the holders of such
Preferred Securities in any material respect, and no termination of this
Indenture shall occur, and no waiver of any Event of Default or compliance with
any covenant under this Indenture shall be effective, without the prior consent
of the holders of at least a majority of the aggregate Liquidation Amount (as
defined in the Trust Agreement) of the Preferred Securities then outstanding
unless and until the principal of, premium, if any, and all accrued and, subject
to Section 3.7, unpaid interest (including any Additional Interest) on the
Debentures have been paid in full, and (ii) no amendment shall be made to
Section 5.8 that would impair the rights of the holders of Preferred Securities
provided therein without the prior consent of the holders of each Preferred
Security then outstanding unless and until the principal of, premium, if any,
and all accrued and (subject to Section 3.7) unpaid interest (including any
Additional Interest) on the Debentures have been paid in full.
It shall not be necessary for any Act of Holders under this Section 9.2
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article IX or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.1) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent have been complied with.
The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
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SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article IX,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debentures theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article IX shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Debentures.
ARTICLE X.
COVENANTS
SECTION 10.1. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of the Holders that it
shall duly and punctually pay the principal of, premium, if any, and interest
(including Additional Interest) on the Debentures in accordance with the terms
of the Debentures and this Indenture.
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in each Place of Payment for the Debentures
an office or agency where Debentures may be presented or surrendered for payment
and an office or agency where Debentures may be surrendered for registration of
transfer, conversion or exchange and where notices and demands to or upon the
Company in respect of the Debentures and this Indenture may be served. The
Company initially appoints the Trustee, acting through its Corporate Trust
Office, as its agent for said purposes. The Company shall give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company shall fail to maintain such office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for any
or all of such purposes, and may
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from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for
Debentures for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation and any change in the location of any such
office or agency.
SECTION 10.3. MONEY FOR DEBENTURE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it shall,
on or before each due date of the principal of, premium, if any. or interest on
any of the Debentures, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal, premium, if any,
or interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and shall promptly notify the Trustee
of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it shall,
prior to 10:00 a.m. New York City time on each due date of the principal of or
interest on any Debentures, deposit with a Paying Agent a sum sufficient to pay
the principal, premium, if any, or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal, premium, if
any, or interest, and (unless such Paying Agent is the Trustee) the Company
shall promptly notify the Trustee of its failure so to act.
The Company shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 10.3,
that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest (including Additional Interest) on Debentures in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Debentures) in the making of any payment of principal, premium,
if any, or interest (including Additional Interest);
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by the Company or any Paying Agent to
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the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest (including Additional Interest) on any Debenture and remaining
unclaimed for two years after such principal, premium, if any, or interest has
become due and payable shall (unless otherwise required by mandatory provision
of applicable escheat or abandoned or unclaimed property law) be paid on Company
Request to the Company, or (if then held by the Company) shall (unless otherwise
required by mandatory provision of applicable escheat or abandoned or unclaimed
property law) be discharged from such trust; and the Holder of such Debenture
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in The City of New York, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 10.4. STATEMENT AS TO COMPLIANCE.
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, one of the signatories of which shall be the principal executive,
principal financial or principal accounting officer of the Company, covering the
preceding fiscal year, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance, observance or
fulfillment of or compliance with any of the terms, provisions, covenants and
conditions of this Indenture, and if the Company shall be in default, specifying
all such defaults and the nature and status thereof of which they may have
knowledge. For the purpose of this Section 10.4, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.
SECTION 10.5. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any
covenant or condition provided pursuant to Section 9.1(3) or 9.1(4), if before
or after the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Debentures shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company in respect of any
such covenant or condition shall remain in full force and effect.
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SECTION 10.6. PAYMENT OF TRUST COSTS AND EXPENSES.
Since the Trust is being formed solely to facilitate an investment in
the Debentures, the Company, in its capacity as the issuer of the Debentures,
hereby covenants to pay all debts and obligations (other than with respect to
the Preferred Securities and Common Securities) and all costs and expenses of
the Trust (including all costs and expenses relating to the organization of the
Trust, the fees and expenses of the Trustees and all costs and expenses relating
to the operation of the Trust) and to pay any and all taxes, duties, assessments
or governmental charges of whatever nature (other than withholding taxes)
imposed on the Trust by the United States or any other taxing authority, so that
the net amounts received and retained by the Trust and the Property Trustee
after paying such expenses shall be equal to the amounts the Trust and the
Property Trustee would have received had no such costs or expenses been incurred
by or imposed on the Trust. The obligations of the Company to pay all debts,
obligations, costs and expenses of the Trust (other than with respect to the
Preferred Securities and Common Securities) shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture.
SECTION 10.7. ADDITIONAL COVENANTS.
The Company covenants and agrees with each Holder of Debentures that it
shall not, and it shall not permit any Subsidiary of the Company to, (i) declare
or pay any dividends or distributions on, or redeem purchase, acquire or make a
liquidation payment with respect to, any shares of the Company's capital stock,
(ii) make any payment of principal of, premium, if any, or interest on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Debentures or (iii) make any guarantee
payments with respect to any guarantee by the Company of debt securities of any
subsidiary of the Company if such guarantee ranks pari passu with or junior in
interest to the Debentures (other than (a) dividends or distributions in the
Company's capital stock, (b) any declaration of a dividend in connection with
the implementation of a Rights Plan or the redemption or repurchase of any
rights distributed pursuant to a Rights Plan, (c) payments under the Guarantee
and (d) purchases of Common Stock related to the issuance of Common Stock or
rights under any of the Company's benefit plans for its directors, officers or
employees, related to the issuance of Common Stock or rights under a dividend
reinvestment and stock purchase plan, or related to the issuance of Common Stock
(or securities convertible or exchangeable for Common Stock) as consideration in
an acquisition transaction that was entered into prior to the commencement of
such Extension Period) if at such time (x) there shall have occurred any event
of which the Company has actual knowledge that (A) with the giving of notice or
the lapse of time or both, would constitute an Event of Default with respect to
the Debentures and (B) in respect of which the Company shall not have taken
reasonable steps to cure, (y) if the Debentures are held by the Trust, the
Company shall be in default with respect to its payment of any obligations under
the Guarantee or (z) the Company shall have given notice of its election to
begin an Extension Period with respect to the Debentures as provided herein and
shall not have rescinded such notice, or such Extension Period or any extension
thereof shall be continuing.
The Company also covenants: (i) to maintain directly or indirectly 100%
ownership of the Common Securities; provided, however, that any permitted
successor of the Company hereunder
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may succeed to the Company's ownership of the Common Securities; (ii) not to
voluntarily terminate, wind-up or liquidate the Trust, except (a) in connection
with a distribution of the Debentures to the holders of the Trust Securities in
liquidation of the Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement; and (iii) to
use its reasonable efforts, consistent with the terms and provisions of the
Trust Agreement, to cause the Trust to remain classified as a grantor trust and
not an association taxable as a corporation for United States federal income tax
purposes.
ARTICLE XI.
REDEMPTION OF SECURITIES
SECTION 11.1. APPLICABILITY OF ARTICLE.
Redemption of Debentures as permitted or required by any form of
Debenture issued pursuant to this Indenture shall be made in accordance with
such form of Debenture and this Article XI; provided, however, that if any
provision of any such form of Debenture shall conflict with any provision of
this Article XI, the provision of such form of Debenture shall govern. Except as
otherwise set forth in the form of Debenture, each Debenture shall be subject to
partial redemption only in the amount of $50 or integral multiples thereof.
SECTION 11.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The Company's election to redeem any Debentures shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption of the Debentures
at the election of the Company, the Company shall, not less than 45 nor more
than 60 days prior to the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such date and of the
principal amount of Debentures to be redeemed. In the case of any redemption of
Debentures prior to the expiration of any restriction on such redemption
provided in the terms of such Debentures, the Company shall furnish the Trustee
with an Officers' Certificate and an Opinion of Counsel evidencing compliance
with such restriction.
SECTION 11.3. SELECTION OF DEBENTURES TO BE REDEEMED.
If less than all the Debentures are to be redeemed, the particular
Debentures to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Debentures not previously
called for redemption, by lot or such other method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Debenture, provided that the unredeemed
portion of the principal amount of any Debenture shall be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for such Debenture. If less than all the Debentures are to be redeemed, the
particular Debentures to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Debentures of
such specified tenor not previously called for redemption in accordance with the
preceding sentence.
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The Trustee shall promptly notify the Company in writing of the
Debentures selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures shall relate,
in the case of any Debenture redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debenture which has been or is to be
redeemed. If the Company shall so direct, Debentures registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Debentures selected for redemption.
SECTION 11.4. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the 30th day, and not earlier than the 60th day,
prior to the Redemption Date, to each Holder of Debentures to be redeemed, at
the address of such Holder as it appears in the Debenture Register.
Each notice of redemption shall identify the Debentures to be redeemed
(including CUSIP number, if a CUSIP number has been assigned to such Debentures)
and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Debentures are to be redeemed, the
identification (and, in the case of partial redemption, the respective principal
amounts) of the particular Debentures to be redeemed;
(d) that on the Redemption Date, the Redemption Price shall become due
and payable upon each such Debenture or portion thereof, and that interest
thereon shall cease to accrue on and after said date; and
(e) the place or places where such Debentures are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall not be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Debenture designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debenture.
SECTION 11.5. DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m. New York City time on the Redemption Date specified
in the notice of redemption given as provided in Section 11.4, the Company shall
deposit with the Trustee or with one or more Paying Agents (or if the Company is
acting as its own Paying Agent, the Company will segregate and hold in trust as
provided in Section 10.3) an amount of money sufficient to pay
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the Redemption Price of, and any accrued interest (including Additional
Interest) on, all the Debentures which are to be redeemed on that date.
SECTION 11.6. PAYMENT OF DEBENTURES CALLED FOR REDEMPTION.
If any notice of redemption has been given as provided in Section 11.4,
the Debentures or portion of Debentures 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. On presentation and
surrender of such Debentures at a Place of Payment specified in such notice,
such Debentures or the specified portions thereof shall be paid and redeemed by
the Company at the applicable Redemption Price, together with accrued interest
(including any Additional Interest) to the Redemption Date; provided, however,
that installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Debentures, or one or
more Predecessor Debentures, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.7.
Upon presentation of any Debenture 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 Debenture or
Debentures, of authorized denominations, in aggregate principal amount equal to
the unredeemed portion of the Debenture so presented and having the same
Original Issue Date, Stated Maturity and terms. If a Global Debenture is so
surrendered, such new Debenture shall also be a new Global Debenture.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and premium, if any, on such
Debenture shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Debenture.
SECTION 11.7. RIGHT OF REDEMPTION OF DEBENTURES.
The Company, at its option, may redeem such Debentures (i) on or after
__________, 2001, in whole at any time or in part from time to time, or (ii)
upon the occurrence and during the continuation of a Tax Event, at any time
within 90 days following the occurrence of such Tax Event in respect of the
Trust, in whole (but not in part), in each case at a Redemption Price equal to
100% of the principal amount thereof.
ARTICLE XII.
CONVERSION OF SECURITIES
SECTION 12.1. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article XII,
the Debentures are convertible, at the option of the Holder, at any time after
__________, 1998, and on or before 5:00 p.m. (New York City time) on the
Business Day immediately preceding the date of repayment of such Debentures,
whether at maturity or upon redemption, into fully paid and nonassessable shares
of Common Stock at an initial conversion rate of _____ shares of Common Stock
for each $50 in aggregate principal amount of Debentures (equal to a conversion
price (the
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"Conversion Price") of $_____ per share of Common Stock, subject to adjustment
as described in this Article XII). A Holder of Debentures may convert any
portion of the principal amount of the Debentures into that number of fully paid
and nonassessable shares of Common Stock (calculated as to each conversion to
the nearest 1/100th of a share) obtained by dividing the principal amount of the
Debentures to be converted by the Conversion Price. In case a Debenture or
portion thereof is called for redemption, such conversion right in respect of
the Debenture or portion so called shall expire at 5:00 p.m. (New York City
time) on the Business Day immediately preceding the corresponding Redemption
Date, unless the Company defaults in making the payment due upon redemption.
SECTION 12.2. CONVERSION PROCEDURES.
(a) To convert all or a portion of the Debentures, the Holder thereof
shall deliver to the Conversion Agent an irrevocable Conversion Request setting
forth the principal amount of Debentures to be converted, together with the name
or names, if other than the Holder, in which the shares of Common Stock should
be issued upon conversion and, if such Debentures are definitive Debentures,
surrender to the Conversion Agent the Debentures to be converted, duly endorsed
or assigned to the Company or in blank. In addition, a holder of Preferred
Securities may exercise its right under the Trust Agreement to exchange such
Preferred Securities for Debentures which shall be converted into Common Stock
by delivering to the Conversion Agent an irrevocable Conversion Request setting
forth the information called for by the preceding sentence and directing the
Conversion Agent (i) to exchange such Preferred Security for a portion of the
Debentures held by the Trust (at an exchange rate of $50 principal amount of
Debentures for each Preferred Security) and (ii) to immediately convert such
Debentures, on behalf of such Holder, into Common Stock pursuant to this Article
XII and, if such Preferred Securities are in definitive form, surrendering such
Preferred Securities, duly endorsed or assigned to the Company or in blank. So
long as any Preferred Securities are outstanding, the Trust shall not convert
any Debentures except pursuant to a Conversion Request delivered to the
Conversion Agent by a holder of Preferred Securities.
If a Conversion Request is delivered on or after the Regular Record
Date and prior to the subsequent Interest Payment Date, the Holder shall be
required to pay to the Company the interest payable to the Holder on the
subsequent Interest Payment Date prior to receiving the shares of Common Stock,
and shall be entitled to receive the interest payable on the subsequent Interest
Payment Date, on the portion of Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. Except as provided in
the immediately preceding sentence, the Company shall not make, or be required
to make, any payment, allowance or adjustment for accumulated and unpaid
interest, whether or not in arrears, on converted Debentures; provided, however,
that if notice of redemption of Debentures is mailed or otherwise given to
Holders of Debentures, then, if any Holder of Debentures converts any Debentures
into Common Stock on any date on or after the date on which such notice of
redemption is mailed or otherwise given, and if such date of conversion falls on
any day from and including the first day of an Extension Period and on or prior
to the Interest Payment Date upon which such Extension Period ends, such
converting Holder shall be entitled to receive either (i) if the date of such
conversion falls after a Regular Record Date and on or prior to the next
succeeding Interest Payment Date, all accrued and unpaid interest on such
Debentures (including interest thereon, if
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any, to the extent permitted by applicable law) to such Interest Payment Date,
or (ii) if the date of such conversion does not fall on a date described in
clause (i) above, all accrued and unpaid interest on such Debentures (including
interest thereon, if any, to the extent permitted by applicable law) to the most
recent Interest Payment Date prior to the date of such conversion, which
interest shall, in either such case, be paid to such converting Holder unless
the date of conversion of such Debentures is on or prior to the Interest Payment
Date upon which such Extension Period ends and after the Regular Record Date for
such Interest Payment Date, in which case such interest shall be paid to the
person who was the Holder of such Debentures (or one or more predecessor
Debentures) at 5:00 p.m. (New York City time) on such Regular Record Date.
Except as otherwise set forth above in this paragraph, in the case of any
Debenture which is converted, interest whose Stated Maturity is after the date
of conversion of such Debenture shall not be payable, and the Company shall not
make nor be required to make any other payment, adjustment or allowance with
respect to accrued but unpaid interest (including Additional Interest, if any)
on the Debentures being converted, which shall be deemed to be paid in full. If
any Debenture called for redemption is converted, any money deposited with the
Trustee or with any paying agent or so segregated and held in trust for the
redemption of such Debenture shall (subject to any right of the Holder of such
Debenture or any Predecessor Debenture to receive interest as provided in this
Indenture) be paid to the Company upon Company Request or, if then held by the
Company, shall be discharged from such trust.
Each conversion shall be deemed to have been effected immediately prior
to 5:00 p.m. (New York City time) on the day on which the Conversion Request was
received (the "Conversion Date") by the Conversion Agent from the Holder or from
a holder of the Preferred Securities effecting a conversion thereof pursuant to
its conversion rights under the Trust Agreement, as the case may be. The Person
or Persons entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as a record holder or holders of such Common
Stock as of the Conversion Date. As promptly as practicable on or after the
Conversion Date, the Company shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Holder in the Conversion
Request, a certificate or certificates for the number of full shares of Common
Stock issuable upon such conversion, together with the cash payment, if any, in
lieu of any fraction of any share to the Person or Persons entitled to receive
the same. The Conversion Agent shall deliver such certificate or certificates to
each Person or Persons.
(b) Subject to any right of the Holder of such Debenture or any
Predecessor Debenture to receive interest as provided in Section 12.2(a), the
Company's delivery upon conversion of the fixed number of shares of Common Stock
into which the Debentures are convertible (together with the cash payment, if
any, in lieu of fractional shares) shall be deemed to satisfy the Company's
obligation to pay the principal amount at maturity of the portion of Debentures
so converted and any Unpaid interest (including Additional Interest, if any)
accrued on such Debentures at the time of such conversion.
(c) No fractional shares of Common Stock shall be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the last reported
sale price of such fractional interest on the date on which the Debentures or
Preferred Securities, as the case may be, were duly surrendered
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to the Conversion Agent for conversion, or, if such day is not a Trading Day, on
the next Trading Day, and the Conversion Agent in turn shall make such payment,
if any, to the Holder of the Debentures or the holder of the Preferred
Securities so converted.
(d) In the event of the conversion of any Debenture in part only, a new
Debenture or Debentures for the unconverted portion thereof will be issued in
the name of the Holder thereof upon the cancellation thereof in accordance with
Section 3.6.
(e) In effecting the conversion transactions described in this Section
12.2, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Debentures) and as agent
of the Holders of Debentures (in the conversion of Debentures into Common
Stock), as the case may be, directing it to effect such conversion transactions.
The Conversion Agent is hereby authorized (i) to exchange Preferred Securities
for Debentures held by the Trust from time to time in connection with the
conversion of such Preferred Securities in accordance with this Article XII and
(ii) to convert all or a portion of the Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article XII and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
SECTION 12.3. CONVERSION PRICE ADJUSTMENTS.
The Conversion Price shall be subject to adjustment (without
duplication) from time to time as follows:
(a) If the Company shall (i) pay a dividend or make a distribution with
respect to the Common Stock in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares or (iv) issue by reclassification
of the shares of Common Stock any shares of capital stock of the Company, then
the Conversion Price in effect immediately prior to such action shall be
adjusted so that the Holder of any Debentures thereafter surrendered for
conversion shall be entitled to receive the number of shares of capital stock of
the Company which he would have owned immediately following such action had such
Debentures been converted immediately prior thereto. An adjustment made pursuant
to this Section 12.3(a) shall become effective immediately after the record date
in the case of a dividend or other distribution and shall become effective
immediately after the effective date in case of a subdivision, combination or
reclassification (or immediately after the record date if a record date shall
have been established for such event). If, as a result of an adjustment made
pursuant to this Section 12.3(a), the Holder of any Debenture thereafter
surrendered for conversion shall become entitled to receive shares of two or
more classes or series of capital stock of the Company, the Board of Directors
(whose determination shall be conclusive and shall be described in a Board
Resolution filed with the Trustee) shall determine the allocation of the
adjusted Conversion Price between or among shares of such classes or series of
capital stock.
(b) If the Company shall issue rights or warrants to all holders of the
Common Stock entitling them (for a period expiring within 45 days after the
record date mentioned in this Section 12.3) to subscribe for or purchase shares
of Common Stock at a price per share less than
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the Current Market Price per share of Common Stock on such record date, then the
Conversion Price for the Debentures shall be adjusted to equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the date of issuance of such rights or warrants by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such Current Market Price, and the
denominator of which shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase. Such adjustment
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such rights or warrants. For the purposes of
this Section 12.3(b), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company shall not issue any rights or warrants in respect of the shares of
Common Stock held in the treasury of the Company. In case any rights or warrants
referred to in this Section 12.3(b) in respect of which an adjustment shall have
been made shall expire unexercised within 45 days after the same shall have been
distributed or issued by the Company, the Conversion Price shall be readjusted
at the time of such expiration to the Conversion Price that would have been in
effect if no adjustment had been made on account of the distribution or issuance
of such expired rights or warrants.
(c) Subject to the last sentence of this Section 12.3(c), if the
Company shall, by dividend or otherwise, distribute to all holders of Common
Stock evidences of its indebtedness, shares of any class or series of capital
stock, cash or assets (including securities, but excluding any rights or
warrants referred to in Section 12.3(b), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in Section
12.3(a)), then the Conversion Price shall be reduced to the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by Section 12.3(c)
by a fraction, the numerator of which shall be the Current Market Price per
share of the Common Stock on the date fixed for the payment of such distribution
(the "Reference Date") less the fair market value (as determined in good faith
by the Board of Directors, whose determination shall be conclusive and described
in a Board Resolution), on the Reference Date, of the portion of the evidences
of indebtedness, shares of capital stock, cash and assets so distributed
applicable to one share of Common Stock and the denominator of which shall be
such Current Market Price per share of Common Stock, such reduction to become
effective immediately prior to the opening of business on the day following the
Reference Date. In the event that such dividend or distribution is not so paid
or made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not occurred.
If the Board of Directors determines the fair market value of any distribution
for purposes of this Section 12.3(c) by reference to the actual or when issued
trading market for any securities comprising such distribution, it must in doing
so consider the prices in such market over the same period used in computing the
Current Market Price per share of Common Stock. For purposes of this Section
12.3(c), any dividend or distribution that includes shares of Common Stock or
rights or warrants to subscribe for or purchase shares of Common Stock shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets other than such shares of
Common Stock or such rights or warrants (making any
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Conversion Price reduction required by this Section 12.3(c)) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (making any further Conversion Price reduction required
by Section 12.3(a) or 12.3(b)), except (A) the Reference Date of such dividend
or distribution as defined in this Section 12.3(c) shall be substituted as (a)
"the record date in the case of a dividend or other distribution," and (b) "the
record date for the determination of stockholders entitled to receive such
rights or warrants" and (c) "the date fixed for such determination" within the
meaning of Sections 12.3(a) and 12.3(b), and (B) any shares of Common Stock
included in such dividend or distribution shall not be deemed outstanding for
purposes of computing any adjustment of the Conversion Price in Section 12.3(a).
(d) If the Company shall pay or make a dividend or other distribution
on the Common Stock exclusively in cash (excluding all cash dividends paid out
of the retained earnings of the Company), then the Conversion Price shall be
reduced to equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this Section 12.3(d) by a fraction, the numerator of which shall
be the Current Market Price per share of Common Stock on the date fixed for the
payment of such distribution less the amount of cash so distributed (and not
excluded as provided in the above parenthetical phrase) applicable to one share
of Common Stock and the denominator of which shall be such Current Market Price
per share of the Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following the date fixed for the
payment of such distribution; provided, however, that in the event the portion
of the cash so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price per share of the Common Stock on the
record date mentioned above, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of Debentures shall have the right
to receive upon conversion the amount of cash such Holder would have received
had such Holder converted each Debenture immediately prior to the record date
for the distribution of the cash. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such record
date had not been fixed.
(e) If the Company or any of its subsidiaries shall make a tender or
exchange offer (other than an odd-lot offer) for all or any portion of the
Common Stock and such tender or exchange offer shall involve the payment by the
Company or such subsidiary of consideration per share of Common Stock having a
fair market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) at the
last time (the "Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer that exceeds 110% of the Current Market Price per
share of Common Stock on the Trading Day next succeeding the Expiration Time,
then the Conversion Price shall be reduced to equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this Section
12.3(e) by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by the Current Market Price per share of Common Stock
on the Trading Day next succeeding the Expiration Time and the denominator of
which shall be the sum of (x) the fair market value (determined as aforesaid) of
the aggregate consideration payable to stockholders based on the acceptance (up
to
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any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares"), and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the Current
Market Price per share of Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become effective immediately prior to the
opening of business on the day following the Expiration Time.
(f) For the purpose of any computation under Sections 12.3(b), (c), (d)
or (e), the "Current Market Price" per share of Common Stock on any date in
question shall be deemed to be the average of the daily Closing Prices for the
five consecutive Trading Days selected by the Company commencing not more than
20 Trading Days before, and ending not later than the earlier of the day in
question or, if applicable, the day before the "ex" date with respect to the
issuance or distribution requiring such computation; provided, however, that if
another event occurs that would require an adjustment pursuant to Sections
12.3(a) through (e), inclusive, the Board of Directors may make such adjustments
to the Closing Prices during such five Trading Day period as it deems
appropriate to effectuate the intent of the adjustments in this Section 12.3, in
which case any such determination by the Board of Directors shall be set forth
in a Board Resolution and shall be conclusive. For purposes of this Section
12.3(f), the term "ex" date, (i) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the New York Stock Exchange (the "NYSE") or on such successor securities
exchange as the Common Stock may be listed or in the relevant market from which
the Closing Prices were obtained without the right to receive such issuance or
distribution, and (ii) when used with respect to any tender or exchange offer,
means the first date on which the Common Stock trades regular way on such
securities exchange or in such market after the Expiration Time of such offer.
(g) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections (a) through (e), as it considers to be
advisable to avoid or diminish any income tax to holders of Common Stock or
rights to purchase Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for income
tax purposes. The Company from time to time may reduce the Conversion Price by
any amount for any period of time if the period is at least 20 days, the
reduction is irrevocable during the period, and the Board of Directors shall
have made a determination that such reduction would be in the best interest of
the Company, which determination shall be conclusive. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail to
Holders a notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect. Such notice shall state the reduced Conversion
Price and the period it shall be in effect.
(h) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason of
this Section 12.3(h) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
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(i) If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of the Debentures.
SECTION 12.4. RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF
ASSETS.
In the event that the Company shall be a party to any transaction
involving (a) any recapitalization or reclassification of the Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination of the
Common Stock), (b) any consolidation of the Company with or merger of the
Company into any other Person, any merger of another Person into the Company
(other than a merger which does not result in a reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock), (c) any sale,
transfer or lease of all or substantially all of the assets of the Company or
(d) any compulsory share exchange, in each case pursuant to which the Common
Stock is converted into the right to receive other securities, cash or other
property, then lawful provision shall be made as part of the terms of such
transaction whereby the Holder of each Outstanding Debenture shall have the
right thereafter to convert each Debenture only into the kind and amount of
securities, cash or other property receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock into which such
Debenture could have been converted immediately prior to such transaction.
The Company or the Person formed by such consolidation or resulting
from such merger or which acquired such assets or which acquires the shares of
the Company, as the case may be, shall make provision in its certificate or
articles of incorporation or other constituent document to establish such right.
Such certificate or articles of incorporation or other constituent document
shall provide for adjustments which, for events subsequent to the effective date
of such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XII.
SECTION 12.5. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price and shall
prepare a certificate signed by the Chairman of the Board, President or a Vice
President of the Company and by its Treasurer or an Assistant Treasurer of the
Company setting forth the adjusted Conversion Price and showing in reasonable
detail the facts upon which such adjustment is based, and such certificate shall
forthwith be filed with the Trustee, the Conversion Agent, the Debenture
Registrar and the registrar for the Preferred Securities; and
(b) notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of Preferred Securities and Holders
of Debentures at their last addresses as they appear upon the Debenture
Registrar and the securities register for the Trust Securities.
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SECTION 12.6. PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on the Common Stock, other than (A) a dividend payable in shares
of Common Stock or (B) a dividend payable in cash that would not require an
adjustment pursuant to Section 12.3(c) or (d), or (ii) authorize a tender or
exchange offer that would require an adjustment pursuant to Section 12.3(e);
(b) the Company shall authorize the granting to all holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of
any class or series or of any other rights or warrants;
(c) of any reclassification of Common Stock (other than a subdivision
or combination of the outstanding Common Stock, or a change in par value, or
from par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval
of any stockholders of the Company shall be required, or the sale or transfer of
all or substantially all of the assets of the Company or of any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or
other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (1) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the securities register of the Trust or (2)
cause to be mailed to all Holders at their last addresses as they shall appear
in the Debenture Register, at least 15 days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record (if any) is to be taken for the purpose of such dividend, distribution,
rights or warrants or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).
SECTION 12.7. CERTAIN DEFINED TERMS.
The following definitions shall apply to terms used in this Article
XII:
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(a) "Closing Prices" of any security on any day means the last reported
sale price for such security, regular way, on such day or, if no sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, regular way, of such security, in either case as reported on the NYSE
Composite Tape or, if the security is not listed or admitted to trading on the
NYSE, on the principal national securities exchange on which such security is
listed or admitted to trading, or, if not listed or admitted to trading on a
national securities exchange, on the National Market System of the National
Association of Securities Dealers, Inc., or, if such security is not quoted or
admitted to trading on such quotation system, on the principal quotation system
on which such security is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security in the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
NYSE member firm selected from time to time by the Board of Directors for that
purpose or, if not so available in such manner, as otherwise determined in good
faith by the Board of Directors.
(b) "Trading Day" means a day on which securities are traded on the
national securities exchange or quotation system used to determine the Closing
Price.
SECTION 12.8. DIVIDEND OR INTEREST REINVESTMENT PLANS.
Notwithstanding the foregoing provisions, the issuance of any shares of
Common Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under any such plan, and the issuance
of any shares of Common Stock or options or rights to purchase such shares
pursuant to any employee benefit plan or program of the Company pursuant to any
option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the date the Debentures were first issued, shall not be deemed
to constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above shall apply. There also shall be no adjustment of the Conversion
Price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article XII.
SECTION 12.9. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on the Common Stock referred to in Section 12.3(c) or (d)
(including dividends or distributions referred to in the last sentence of
Section 12.3(c)), then the Holders, upon the conversion thereof subsequent to
5:00 p.m. (New York City time) on the date fixed for the determination of
stockholders entitled to receive such distribution and prior to the
effectiveness of the Conversion Price adjustment in respect of such
distribution, also shall be entitled to receive for each share of Common Stock
into which the Debentures are converted, the portion of the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash and assets so distributed applicable to one share of Common Stock;
provided, however, that, at the election of the Company (whose election shall be
evidenced by a Board Resolution) with respect to all Holders so converting, the
Company may, in lieu of distributing to such Holders any portion of
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such distribution not consisting of cash or securities of the Company, pay such
Holders an amount in cash equal to the fair market value thereof (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution). If any conversion of Debentures described
in the immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Stock which the Holder so converted is
entitled to receive in accordance with the immediately preceding sentence, the
Company may elect (such election to be evidenced by a Board Resolution) to
distribute to such Holder a due bill for the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets to
which such Holder is so entitled, provided that such due bill (i) meets any
applicable requirements of the principal national securities exchange or other
market on which the Common Stock is then traded and (ii) requires payment or
delivery of such shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets no later than the date of
payment or delivery thereof to holders of shares of Common Stock receiving such
distribution.
SECTION 12.10. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION
PRICE OR ADJUSTMENTS.
Neither the Trustee nor any Conversion Agent shall at any time be under
any duty or responsibility to any Holder to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor any Conversion Agent shall be
accountable with respect to the validity or value (or the kind of account) of
any shares of Common Stock or of any securities or property, which may at any
time be issued or delivered upon the conversion of any Debenture; and neither
the Trustee nor any Conversion Agent makes any representation with respect
thereto. Neither the Trustee nor any Conversion Agent shall be responsible for
any failure of the Company to make any cash payment or to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property upon the surrender of any Debenture for the purpose of conversion, or,
except as expressly herein provided, to comply with any of the covenants of the
Company contained in Article X or this Article XII.
ARTICLE XIII.
SUBORDINATION OF SECURITIES
SECTION 13.1. DEBENTURES SUBORDINATE TO SENIOR DEBT.
The Company covenants and agrees, and each Holder of a Debenture, by
its acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article XIII, the payment of the
principal of, premium, if any, and interest (including any Additional Interest)
on each and all of the Debentures are hereby expressly made subordinate and
subject in right of payment to the prior payment in full of all Senior Debt.
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SECTION 13.2. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company (a "Proceeding"), then the holders
of Senior Debt shall be entitled to receive payment in full of all amounts due
or to become due on such Senior Debt, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, before the Holders are entitled to receive or retain any
payment or distribution of any kind or character, whether in cash, property or
securities (including any payment or distribution which may be payable or
deliverable by reason of the payment of any other Debt of the Company
subordinated to the payment of the Debentures, such payment or distribution
being hereinafter referred to as a "Junior Subordinated Payment"), on account of
principal of, premium, if any, or interest (including any Additional Interest)
on the Debentures or on account of the purchase or other acquisition of
Debentures by the Company or any Subsidiary and to that end the holders of
Senior Debt shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, including any Junior Subordinated Payment, which may be
payable or deliverable in respect of the Debentures in any such Proceeding;
provided, however, that holders of Senior Debt shall not be entitled to receive
payment of any such amounts to the extent that such holders would be required by
the subordination provisions of such Senior Debt to pay such amounts over to the
obligees on trade accounts payable or other liabilities arising in the ordinary
course of the Company's business.
In the event that, notwithstanding the foregoing provisions of this
Section 13.2, the Trustee or the Holder of any Debenture shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all amounts due or to become due on all Senior Debt are paid in
full or payment thereof is provided for in cash or cash equivalents or otherwise
in a manner satisfactory to the holders of Senior Debt, and if such fact shall,
at or prior to the time of such payment or distribution, have been made known to
the Trustee or such Holder, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for application to the payment
of all amounts due or to become due on all Senior Debt remaining unpaid, to the
extent necessary to pay all amounts due or to become due on all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt; provided, however, that holders of Senior Debt shall
not be entitled to receive payment of any such amounts to the extent that such
holders would be required by the subordination provisions of such Senior Debt to
pay such amounts over to the obligees on trade accounts payable or other
liabilities arising in the ordinary course of the Company's business.
For purposes of this Article XIII only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Debentures are so subordinated as provided in this Article XIII.
The consolidation
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of the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the sale of all or
substantially all of its properties and assets as an entirety to another Person
upon the terms and conditions set forth in Article VIII shall not be deemed a
Proceeding for the purposes of this Section 13.2 if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale such properties and assets as an entirety, as the case may be, shall, as
a part of such consolidation, merger, or sale comply with the conditions set
forth in Article VIII.
SECTION 13.3. PRIOR PAYMENT TO SENIOR DEBT UPON ACCELERATION OF
DEBENTURES.
In the event that any Debentures are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Debentures so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Debentures
are entitled to receive any payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment) by the Company on account of the principal of, premium, if any, or
interest (including any Additional Interest) on the Debentures or on account of
the purchase or other acquisition of Debentures by the Company or any
Subsidiary.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Debenture prohibited by the
foregoing provisions of this Section 13.3, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section 13.3 shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.4. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT.
In the event and during the continuation of any default in the payment
of principal of, premium, if any, or interest on any Senior Debt, or in the
event that any event of default with respect to any Senior Debt shall have
occurred and be continuing and shall have resulted in such Senior Debt becoming
or being declared due and payable prior to the date on which it would otherwise
have become due and payable, unless and until such event of default shall have
been cured or waived or shall have ceased to exist and such acceleration shall
have been rescinded or annulled, or (b) in the event any judicial proceeding
shall be pending with respect to any such default in payment or such event or
default, then no payment or distribution of any kind or character, whether in
cash, properties or securities (including any Junior Subordinated Payment) shall
be made by the Company on account of principal of, premium, if any, or interest
(including any Additional Interest), if any, on the Debentures or on account of
the purchase or other acquisition of Debentures by the Company or any
Subsidiary, in each case unless and until all amounts due or to become due on
such Senior Debt are paid in full.
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In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Debenture prohibited by the
foregoing provisions of this Section 13.4, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section 13.4 shall not apply to any payment with
respect to which Section 13.2 would be applicable.
SECTION 13.5. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article XIII or elsewhere in this Indenture
or in any of the Debentures shall prevent (a) the Company, at any time except
during the pendency of any Proceeding referred to in Section 13.2 or under the
conditions described in Sections 13.3 and 13.4, from making payments at any time
of principal of, premium, if any, or interest (including Additional Interest) on
the Debentures or (b) the application by the Trustee of any money deposited with
it hereunder to the payment of or on account of the principal of, premium, if
any, or interest (including any Additional Interest) on the Debentures or the
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article XIII.
SECTION 13.6. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all amounts due or to become due on
all Senior Debt, or the provision for such payment in cash or cash equivalents
or otherwise in a manner satisfactory to the holders of Senior Debt, the Holders
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Debt pursuant to the provisions of this Article XIII
(equally and ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to Senior Debt of the Company to
substantially the same extent as the Debentures are subordinated to the Senior
Debt and is entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Senior Debt) to the rights of the holders
of such Senior Debt to receive payments and distributions of cash, property and
securities applicable to the Senior Debt until the principal of, premium, if
any, and interest on the Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders or the Trustee would be
entitled except for the provisions of this Article XIII, and no payments over
pursuant to the provisions of this Article XIII to the holders of Senior Debt by
Holders or the Trustee, shall, as among the Company, its creditors other than
holders of Senior Debt and the Holders, be deemed to be a payment or
distribution by the Company to or on account of the Senior Debt.
SECTION 13.7. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article XIII are and are intended solely for the
purpose of defining the relative rights of the Holders, on the one hand, and the
holders of Senior Debt, on the other hand. Nothing contained in this Article
XIII or elsewhere in this Indenture or in the Debentures is
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intended to or shall (a) impair, as between the Company and the Holders, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders the principal of, premium, if any, and interest (including any
Additional Interest) on the Debentures as and when the same shall become due and
payable in accordance with their terms, (b) affect the relative rights against
the Company of the Holders and creditors of the Company other than their rights
in relation to the holders of Senior Debt or (c) prevent the Trustee or the
Holder of any Debenture from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, including filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article XIII
of the holders of Senior Debt to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.
SECTION 13.8. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Debenture by his or her acceptance thereof 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 provided
in this Article XIII and appoints the Trustee his or her attorney-in-fact for
any and all such purposes.
SECTION 13.9. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Debt may, at any time and from to time, without
the consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Holders and without impairing or releasing the
subordination provided in this Article XIII or the obligations hereunder of the
Holders to the holders of Senior Debt, 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, Senior Debt, or otherwise amend or supplement in any manner
Senior Debt or any instrument evidencing the same or any agreement under which
Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release
any Person liable in any manner for the collection of Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.
SECTION 13.10. NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Debentures. Notwithstanding the provisions of this
Article XIII or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Debentures, unless
and until the Trustee shall have received written notice thereof from the
Company or a
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holder of Senior Debt or from any trustee, agent or representative therefor;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section 13.10 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including the payment of the principal of, premium, if any, or interest
(including any Additional Interest) on any Debenture), 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 purpose for which
it was received and shall not be affected by any notice to the contrary which
may be received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Debt (or a trustee therefor) to establish that
such notice has been given by a holder of Senior Debt (or a trustee therefor).
In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article XIII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held by such Person,
the extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article XIII, 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 13.11. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to
in this Article XIII, the Trustee, subject to the provisions of Section 6.1, and
the Holders shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such Proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XIII.
SECTION 13.12. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not
be liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders or to the Company or to any other Person cash, property or
securities to which any holders of Senior Debt shall be entitled by virtue of
this Article XIII or otherwise. With respect to the holders of Senior Debt, the
Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article XIII and no implied
covenants or obligations with respect to holders of Senior Debt shall be read
into this Indenture against the Trustee.
74
<PAGE> 82
SECTION 13.13. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT;
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XIII with respect to any Senior Debt which may
at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article XIII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.7.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article XIII shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XIII in addition to or in place of the Trustee.
SECTION 13.14. ARTICLE APPLICABLE TO PAYING AGENTS.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article XIII shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XIII in addition or in place of the Trustee.
SECTION 13.15. CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT.
For the purposes of this Article XIII only, (a) the issuance and
delivery of junior securities upon conversion or exchange of Debentures shall
not be deemed to constitute a payment or distribution on account of the
principal of, premium, if any, or interest (including any Additional Interest)
on Debentures or on account of the purchase or other acquisition of Debentures,
and (b) the payment, issuance or delivery of cash, property or securities (other
than junior securities) upon conversion or exchange of a Debenture shall be
deemed to constitute payment on account of the principal of such security. For
the purposes of this Section 13.15, the term "junior securities" means (i)
shares of any stock of any class of the Company and (ii) securities of the
Company which are subordinated in right of payment to all Senior Debt that may
be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in this Article XIII.
SECTION 13.16. TRUST FUNDS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, payments
from funds held in trust under Article IV by the Trustee for the payment of
principal of, premium, if any, and interest on the Debentures shall not be
subordinated to the prior payment of any Senior Debt of the Company or subject
to the restrictions set forth in this Article XIII and no Holder shall be
obligated to pay over any such funds to the Company or any holder of Senior Debt
of the Company or any other creditor of the Company.
-----------------------------------
75
<PAGE> 83
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
TEXAS INDUSTRIES, INC.
By:
---------------------------------------
[Name]
[Title]
------------------------------------------
as Trustee
By:
---------------------------------------
Name:
Title:
76
<PAGE> 1
EXHIBIT 4.7
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
BETWEEN
TEXAS INDUSTRIES, INC.
(AS GUARANTOR)
AND
---------------------
(AS TRUSTEE)
DATED AS OR
__________, 1998
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee Agreement
Of 1939, as amended -------------------
- -------------------
<S> <C>
310(a)....................................................................... 4.1(a)
310(b)....................................................................... 4.1(c), 2.8
310(c)....................................................................... Inapplicable
311(a)....................................................................... 2.2(b)
311(b)....................................................................... 2.2(b)
311(c)....................................................................... Inapplicable
312(a)....................................................................... 2.2(a)
312(b)....................................................................... 2.2(b)
313.......................................................................... 2.3
314(a)....................................................................... 2.4
314(b)....................................................................... Inapplicable
314(c)....................................................................... 2.5
314(d)....................................................................... Inapplicable
314(e)....................................................................... 1.1, 2.5, 3.2
314(f)....................................................................... 2.1, 3.2
315(a)....................................................................... 3.1(d)
315(b)....................................................................... 2.7
315(c)....................................................................... 3.1
315(d)....................................................................... 3.1(d)
316(a)....................................................................... 1.1, 2.6, 5.4
316(b)....................................................................... 5.3
316(c)....................................................................... 8.2
317(a)....................................................................... Inapplicable
317(b)....................................................................... Inapplicable
318(a)....................................................................... 2.1(b)
318(b)....................................................................... 2.1
318(c)....................................................................... 2.1(a)
</TABLE>
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I. DEFINITIONS........................................................................................... 1
SECTION 1.1. Definitions............................................................................... 1
ARTICLE II. TRUST INDENTURE ACT.................................................................................. 3
SECTION 2.1. Trust Indenture Act; Application.......................................................... 3
SECTION 2.2. List of Holders........................................................................... 4
SECTION 2.3. Reports by Guarantee Trustee.............................................................. 4
SECTION 2.4. Periodic Reports to Guarantee Trustee..................................................... 4
SECTION 2.5. Evidence of Compliance with Conditions Precedent.......................................... 4
SECTION 2.6. Events of Default; Waiver................................................................. 5
SECTION 2.7. Event of Default; Notice.................................................................. 5
SECTION 2.8. Conflicting Interests..................................................................... 5
ARTICLE III. POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE...................................................... 5
SECTION 3.1. Powers and Duties of Guarantee Trustee.................................................... 5
SECTION 3.2. Certain Rights of Guarantee Trustee....................................................... 7
SECTION 3.3. Indemnity................................................................................. 8
ARTICLE IV. GUARANTEE TRUSTEE.................................................................................... 8
SECTION 4.1. Guarantee Trustee: Eligibility........................................................... 8
SECTION 4.2. Appointment, Removal and Resignation of Guarantee Trustee................................. 9
ARTICLE V. GUARANTEE............................................................................................. 10
SECTION 5.1. Guarantee................................................................................. 10
SECTION 5.2. Waiver of Notice and Demand............................................................... 10
SECTION 5.3. Obligations Not Affected.................................................................. 10
SECTION 5.4. Rights of Holders......................................................................... 11
SECTION 5.5. Guarantee of Payment...................................................................... 11
SECTION 5.6. Subrogation............................................................................... 11
SECTION 5.7. Independent Obligations................................................................... 11
ARTICLE VI. SUBORDINATION........................................................................................ 12
SECTION 6.1. Subordination............................................................................. 12
ARTICLE VII. TERMINATION......................................................................................... 12
SECTION 7.1. Termination............................................................................... 12
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE VIII. MISCELLANEOUS...................................................................................... 12
SECTION 8.1. Successors and Assign..................................................................... 12
SECTION 8.2. Amendments................................................................................ 12
SECTION 8.3. Notice.................................................................................... 13
SECTION 8.4. Benefit................................................................................... 13
SECTION 8.5. Interpretation............................................................................ 13
SECTION 8.6. Governing Law............................................................................. 14
SECTION 8.7. Counterparts.............................................................................. 14
</TABLE>
ii
<PAGE> 5
GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT, dated as of _________________, 1998, is
executed and delivered by TEXAS INDUSTRIES, INC., a Delaware corporation (the
"Guarantor"), having its principal office at 1341 West Mockingbird Lane, Dallas,
Texas 75247-6913, and ____________________, a ____________________ corporation,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities and Common Securities (each
as defined herein and together, the "Securities") of TXI CAPITAL TRUST I, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of ____________________, 1998 (the "Trust Agreement"), among the Guarantor, as
Depositor, the Property Trustee and the Delaware Trustee named therein, the
Administrative Trustees named therein and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing $____________ aggregate Liquidation Amount (as defined in the Trust
Agreement) of its __________% Convertible Trust Preferred Securities,
Liquidation Amount $25 per security (the "Capital Securities"), representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Trust Agreement;
WHEREAS, the Capital Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Common
Securities of the Issuer, will be used to purchase the Debentures (as defined in
the Trust Agreement) of the Guarantor which will be deposited with
____________________, as Property Trustee under the Trust Agreement, as trust
assets; and
WHEREAS, as incentive for the Holders to purchase Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Securities.
ARTICLE I. DEFINITIONS
SECTION 1. 1. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to be an
<PAGE> 6
Affiliate of the Issuer. For the purposes of this definition, "control" when
used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Board of Directors" means either the board of directors of the
Guarantor or any committee of that board duly authorized to act hereunder or any
directors or officers of the Guarantor to whom such board of directors or such
committee shall have duly delegated its authority.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 90 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
required to be paid on the Securities, to the extent that the Issuer shall have
funds on hand available therefor at such time, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), with respect to any Securities called for redemption by the
Issuer, to the extent the Issuer shall have funds on hand available therefor at
such time and (iii) upon a voluntary or involuntary termination, winding up or
liquidation of the Issuer, unless Debentures are distributed to the Holders, the
lesser of (a) the aggregate of the Liquidation Amount plus accrued and unpaid
Distributions to the date of payment and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
after satisfaction of liabilities to creditors of the Issuer as required by
applicable law (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means ____________________, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement, and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any Securities; provided, however, that in determining whether
the holders of the requisite percentage of Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor,
the Guarantee Trustee or any Affiliate of the Guarantor or the Guarantee
Trustee.
"Indenture" means the Indenture dated as of ____________, 1993, between
the Guarantor and ______________________, as trustee.
2
<PAGE> 7
"Majority in Aggregate Liquidation Amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holders, voting
separately as a class, of more than 50% of the aggregate Liquidation Amount of
all then outstanding Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of the Board of Directors
of such Person or the President, a Managing Director or a Vice President of such
Person, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of such Person, and delivered to the Guarantee Trustee. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each 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 officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" when used with respect to the Guarantee Trustee
means any officer of the Guarantee Trustee assigned by the Guarantee Trustee
from time to time to administer its corporate trust matters.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
3
<PAGE> 8
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee:
(i) semi-annually, not more than 15 days after January 15 and
July 15 in each year, a list in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders as of
such January 1 and July 1, and
(ii) at such other times as the Guarantee Trustee may request
in writing, within 30 days after the receipt by the Guarantor of any
such request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished, excluding from
any such list names and addresses received by the Guarantee Trustee in
its capacity as Securities Registrar.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by Guarantee Trustee.
The Guarantee Trustee shall transmit to Holders such reports concerning
the Guarantee Trustee and its actions under this Guarantee Agreement as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust Indenture
Act, the Guarantee Trustee shall, within 60 days after each May 15 following the
date of this Guarantee Agreement deliver to Holders a brief report, dated as of
such May 15, which complies with the provisions of such Section 313(a).
SECTION 2.4. Periodic Reports to Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Guarantee Trustee
shall be for informational purposes only and the Guarantee Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Guarantee Trustee shall be entitled to rely
exclusively on Officers' Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in
4
<PAGE> 9
Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c)(1) may be given in the form
of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver. The Holders of a Majority in
Aggregate Liquidation Amount of the Securities may, by vote, on behalf of the
Holders, waive any past Event of Default and its consequences. Upon such waiver,
any such Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default actually known to the Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee 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 Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained written notice, of such Event of
Default.
SECTION 2.8. Conflicting Interests. The Trust Agreement shall be deemed
to be specifically described in this Guarantee Agreement for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
5
<PAGE> 10
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Aggregate Liquidation Amount of the Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
6
<PAGE> 11
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee Agreement or adequate indemnity
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 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 reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party
or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of
its selection, and the advice or opinion of such legal counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or opinion. Such legal counsel may be legal counsel to the Guarantor or
any of its Affiliates and may be one of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such adequate security and
indemnity, as would satisfy a reasonable person in the position of the
Guarantee Trustee, against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(v) shall be taken to relieve
7
<PAGE> 12
the Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Guarantee Agreement.
(vi) The Guarantee Trustee shall 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 further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
written instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Guarantee Trustee (A) may
request instructions from the Holders, (B) may refrain from enforcing
such remedy or right or taking such other action until such written
instructions are received and (C) shall be protected in acting in
accordance with such written instructions.
(ix) 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 Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity. The Guarantor agrees to indemnify the Guarantee
Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on the part of the Guarantee Trustee,
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
8
<PAGE> 13
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000, and shall be a
corporation meeting the requirements of Section 310(a) of the
Trust Indenture Act. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority, then,
for the purposes of this Section 4.1 and to the extent
permitted by the Trust Indenture Act, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4. 1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and 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.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor. If an instrument of acceptance by a Successor Guarantee Trustee
shall not have been delivered to the Guarantee Trustee within 30 days after such
removal, the Guarantee Trustee being removed may petition any court of competent
jurisdiction for the appointment of a Successor Guarantee Trustee.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an 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 instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
9
<PAGE> 14
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim which the Issuer may
have or assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, 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 Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the 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 Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
10
<PAGE> 15
(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 the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on behalf of the Holders; (iii) he
Holders of a Majority in Aggregate Liquidation Amount of the Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this Guarantee Agreement
or exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer or any other Person.
SECTION 5.5. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Debentures to Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by the Issuer pursuant to Section 5.1; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Securities and that the Guarantor shall be liable as principal
and as debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
SECTION 5.8. Conversion. The Guarantor acknowledges and agrees to honor
and perform all of its obligations to issue and deliver common stock of the
Guarantor upon the conversion of the Capital Securities as provided in Article
XII of the Indenture.
11
<PAGE> 16
ARTICLE VI. SUBORDINATION
SECTION 6.1. Subordination. The obligations of the Guarantor under this
Guarantee Agreement will constitute unsecured obligations of the Guarantor and
will rank subordinate and junior in right of payment to all Senior Debt (as
defined in the Indenture) of the Guarantor, except those made pari passu or
subordinate to such obligations expressly by their terms in the same manner as
set forth in Article XIII of the Indenture.
ARTICLE VII. TERMINATION
SECTION 7.1. Termination. This Guarantee Agreement shall terminate and
be of no further force and effect upon (i) full payment of the Redemption Price
of all Securities, (ii) the distribution of Debentures to the Holders in
exchange for all of the Securities or (iii) full payment of the amounts payable
in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Securities or this
Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assign. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Securities then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that is permitted
under Article VIII of the Indenture and pursuant to which the successor or
assignee agrees in writing to perform the Guarantor's obligations hereunder, the
Guarantor shall not assign its obligations hereunder.
SECTION 8.2. Amendments. Except with respect to any changes which do
not adversely affect the rights of the Holders or the Guarantee Trustee in any
material respect (in which case no consent of the Holders or the Guarantee
Trustee, as the case may be, will be required), this Guarantee Agreement may
only be amended with the prior approval of the Holders of not less than a
Majority in Aggregate Liquidation Amount of all the outstanding Securities and
of the Guarantee Trustee. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
12
<PAGE> 17
SECTION 8.3. Notice. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Texas Industries, Inc.
1341 West Mockingbird Lane
Dallas, Texas 75247-691347739
Attention:
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
TXI Capital Trust I
c/o Texas Industries, Inc.
1341 West Mockingbird Lane
Dallas, Texas 75247-691347739
Attention:
with a copy to:
---------------------
---------------------
---------------------
---------------------
Attention:
----------------------
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the Securities.
SECTION 8.5. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
13
<PAGE> 18
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law. THUS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 8.7. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
14
<PAGE> 19
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
TEXAS INDUSTRIES, INC.
By:
--------------------------------
[Name]
[Title]
--------------------
as Guarantee Trustee
By:
--------------------------------
Name:
Title:
15
<PAGE> 1
EXHIBIT 4.8
TEXAS INDUSTRIES, INC.
to
[NAME OF TRUSTEE],
Trustee
INDENTURE
REGARDING SENIOR SECURITIES
Dated as of ____________, 199__
<PAGE> 2
Reconciliation and Tie Sheet*
between
Provisions of the Trust Indenture Act of 1939
and
Indenture, dated as of ____________, 199__
between
[NAME OF ISSUER]
and
[NAME OF TRUSTEE], Trustee
<TABLE>
<CAPTION>
Section of Act Section of Indenture
- -------------- --------------------
<S> <C>
310(a)(1), (2).............................................. 5.08
310(a)(3), (4).............................................. Inapplicable
310(a)(5)................................................... 5.08
310(b)...................................................... **
310(c)...................................................... Inapplicable
311(a), (b)................................................. **
311(c)...................................................... Inapplicable
312......................................................... **
313(a)...................................................... **
313(b)(1)................................................... Inapplicable
313(b)(2)................................................... **
313(c), (d)................................................. **
314(a)...................................................... **
314(b)...................................................... Inapplicable
314(c)(1) and (2)........................................... 15.05
314(c)(3)................................................... Inapplicable
314(d)...................................................... Inapplicable
314(e)...................................................... 15.05
314(f)...................................................... Inapplicable
315(a)(c) and (d)........................................... 5.01
315(b)...................................................... 4.08
315(e)...................................................... 4.09
316(a)(1)................................................... 4.01 and 4.07
316(a)(2)................................................... Omitted
316(a) last sentence........................................ 6.04
316(b)...................................................... 4.04
316(c)...................................................... 6.05
317(a)...................................................... 4.02
317(b)...................................................... 3.04(a)
318(a)...................................................... 15.07
</TABLE>
- -------------------
* This Reconciliation and Tie-sheet is not a part of the Indenture.
** Included pursuant to Section 318(c) of the Trust Indenture Act of 1939.
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
Page
----
<S> <C>
PARTIES................................................................... 1
RECITALS.................................................................. 1
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions............................................ 1
ARTICLE TWO
THE SECURITIES AND SECURITY FORMS
SECTION 2.01. Amount Unlimited; Issuable in Series................... 8
SECTION 2.02. Form of Securities and of Trustee's
Certificate of Authentication.......................... 11
SECTION 2.03. Securities in Global Form.............................. 12
SECTION 2.04. Denomination, Authentication and
Dating of Securities................................... 12
SECTION 2.05. Execution of Securities................................ 16
SECTION 2.06. Exchange and Registration of Transfer of Securities.... 17
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Securities........ 21
SECTION 2.08. Temporary Securities................................... 22
SECTION 2.09. Payment of Interest; Interest Rights................... 24
SECTION 2.10. Cancellation of Securities Paid, etc................... 26
ARTICLE THREE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal and Interest...................... 26
SECTION 3.02. Offices for Notices and Payments, etc.................. 26
SECTION 3.03. Provisions as to Paying Agent.......................... 28
SECTION 3.04. Statement as to Compliance............................. 29
</TABLE>
- ---------------------
* This table of contents is not part of the Indenture.
i
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 3.05. Notice of Defaults..................................... 30
SECTION 3.06. Corporate Existence.................................... 31
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 4.01. Events of Default...................................... 31
SECTION 4.02. Payment of Securities on Default; Suit Therefor........ 35
SECTION 4.03. Application of Money Collected by Trustee.............. 37
SECTION 4.04. Proceedings by Securityholders......................... 38
SECTION 4.05. Proceedings by Trustee................................. 38
SECTION 4.06. Remedies Cumulative and Continuing;
Delay or Omission Not Waiver........................... 39
SECTION 4.07. Direction of Proceedings and Waiver of
Defaults by Majority of Securityholders................ 39
SECTION 4.08. Notice of Defaults..................................... 40
SECTION 4.09. Undertaking to Pay Costs............................... 40
ARTICLE FIVE
CONCERNING THE TRUSTEE
SECTION 5.01. Duties and Responsibilities of Trustee................. 41
SECTION 5.02. Reliance on Documents, Opinions, etc................... 42
SECTION 5.03. No Responsibility for Recitals, etc.................... 44
SECTION 5.04. Trustee, Paying Agents or Registrar May Own Securities. 44
SECTION 5.05. Money to Be Held in Trust.............................. 44
SECTION 5.06. Compensation and Expenses of Trustee................... 44
SECTION 5.07. Officers' Certificate as Evidence...................... 45
SECTION 5.08. Eligibility of Trustee................................. 45
SECTION 5.09. Resignation or Removal of Trustee...................... 45
SECTION 5.10. Acceptance by Successor Trustee........................ 47
SECTION 5.11. Succession by Merger, etc.............................. 48
</TABLE>
ii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
<S> <C> <C>
SECTION 6.01. Action by Securityholders.............................. 49
SECTION 6.02. Proof of Execution by Securityholders.................. 50
SECTION 6.03. Who Are Deemed Absolute Owners......................... 50
SECTION 6.04. Company-Owned Securities Disregarded................... 51
SECTION 6.05. Revocation of Consents; Future Holders Bound........... 52
ARTICLE SEVEN
SECURITYHOLDERS' MEETINGS
SECTION 7.01. Purposes of Meetings................................... 52
SECTION 7.02. Call of Meetings by Trustee............................ 53
SECTION 7.03. Call of Meetings by Company or Securityholders......... 53
SECTION 7.04. Qualifications for Voting.............................. 54
SECTION 7.05. Regulations............................................ 54
SECTION 7.06. Quorum................................................. 55
SECTION 7.07. Voting................................................. 55
SECTION 7.08. No Delay of Rights by Meeting.......................... 56
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.01. Supplemental Indentures Without
Consent of Securityholders............................. 56
SECTION 8.02. Supplemental Indentures with Consent
of Securityholders of a Series......................... 58
SECTION 8.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures...................... 59
SECTION 8.04. Notation on Securities................................. 59
SECTION 8.05. Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee...................... 60
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 9.01. Company May Consolidate, etc., on Certain Terms........ 60
SECTION 9.02. Successor Corporation Substituted...................... 61
</TABLE>
iii
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
ARTICLE TEN
REDEMPTION OF SECURITIES
<S> <C> <C>
SECTION 10.01. Applicability of Article............................... 61
SECTION 10.02. Election to Redeem; Notice to Trustee.................. 62
SECTION 10.03. Selection by Trustee of Securities to Be Redeemed...... 62
SECTION 10.04. Notice of Redemption................................... 62
SECTION 10.05. Deposit of Redemption Price............................ 63
SECTION 10.06. Securities Payable on Redemption Date.................. 63
SECTION 10.07. Registered Securities Redeemed in Part................. 64
ARTICLE ELEVEN
SINKING FUNDS
SECTION 11.01. Applicability of Article............................... 65
SECTION 11.02. Satisfaction of Sinking Fund Payments with Securities.. 65
SECTION 11.03. Redemption of Securities for Sinking Fund.............. 66
ARTICLE TWELVE
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 12.01. Terms Set Forth in the Securities...................... 66
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. Discharge of Indenture................................. 66
SECTION 13.02. Deposited Money to Be Held in Trust by Trustee......... 68
SECTION 13.03. Paying Agent to Repay Money Held....................... 68
SECTION 13.04. Return of Unclaimed Money.............................. 68
SECTION 13.05. Discharge of Indenture as to Certain
Series of Securities................................... 69
SECTION 13.06. Repayment to Company of Deposits Made
Pursuant to Section 13.05.............................. 71
SECTION 13.07. Deposits Irrevocable................................... 71
SECTION 13.08. Reinstatement.......................................... 71
</TABLE>
iv
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
<S> <C> <C>
SECTION 14.01. Indenture and Securities Solely Corporate Obligations.. 72
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
SECTION 15.01. Provisions Binding on Company's Successors............. 72
SECTION 15.02. Official Acts by Successor Corporation................. 72
SECTION 15.03. Addresses for Notices, etc............................. 73
SECTION 15.04. Governing Law.......................................... 73
SECTION 15.05. Evidence of Compliance with Conditions Precedent....... 73
SECTION 15.06. Legal Holidays......................................... 74
SECTION 15.07. Trust Indenture Act to Control......................... 74
SECTION 15.08. No Security Interest Created........................... 74
SECTION 15.09. Benefits of Indenture.................................. 74
SECTION 15.10. Payments to Be Made in U.S. Dollars.................... 74
SECTION 15.11. Table of Contents, Headings, etc....................... 74
SECTION 15.12. Execution in Counterparts.............................. 75
</TABLE>
v
<PAGE> 8
THIS INDENTURE, dated as of ____________, 199__, is executed
and delivered from TEXAS INDUSTRIES, INC., a Delaware corporation (such
corporation or, subject to Article Nine, its successors and assigns, the
"Company"), and [NAME OF TRUSTEE], a ____________ banking corporation (such
corporation or, subject to Article Five, its successors and assigns as Trustee
under this Indenture, the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
senior debentures, notes or other evidences of indebtedness or warrants therefor
to be issued in one or more series (the "Securities"), as provided herein.
For and in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions. The terms defined in this Section
1.01 (except to the extent the application of such definitions is expressly
limited to certain instances, and except as otherwise expressly provided in this
Indenture or unless the context otherwise requires) for all purposes of this
Indenture will have the respective meanings specified in this Section 1.01.
Except as otherwise expressly provided in this Indenture or unless the context
otherwise requires, all other terms used in this Indenture that are defined in
the Trust Indenture Act or that the Trust Indenture Act defines by reference to
the Securities Act of 1933 or by Commission rule under the Trust Indenture Act
will have the meanings assigned to such terms in the Trust Indenture Act, in
such rule thereunder or in such Securities Act as in force at the date of the
execution of this Indenture.
"Bearer Security" means any Security established pursuant to
Section 2.02 that is payable to bearer.
"Bearer Security Tax Certificate" or "Certificate of non-U.S.
Ownership", when used with respect to a Bearer
<PAGE> 9
Security, means a certificate satisfying the requirements of Treasury Regulation
Section 1.163-5(c)(2)(i)(D)(3), as that provision may be amended or redesignated
from time to time, which certificate shall be in a form approved by the Company.
"Board of Directors" means the Board of Directors of the
Company or, with respect to any matter, any committee of the Board of Directors
duly authorized to act for the Board of Directors with respect to such matter.
"Business Day", with respect to each series of Securities,
means any day other than a Saturday or Sunday that is neither a legal holiday
nor a day on which banking institutions are authorized or obligated by law or
regulation to close in either The City of New York or, with respect to
Registered Notes that will bear interest based on a specified percentage of
London interbank offered quotations ("LIBOR"), in London, England, or, in the
case of Bearer Securities, in any Place of Payment.
"CEDEL, S.A." means Centrale de Livraison de Valeurs
Mobilieres S.A.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this Indenture the Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Company" means the corporation identified as the Company in
the first paragraph of this Indenture until a successor corporation shall
succeed to and be substituted for the Company pursuant to the provisions of
Article Nine, and thereafter shall mean such successor corporation.
"Company Order" means a written request or order signed in the
name of the Company by its Chairman of the Board, any Vice Chairman, its Chief
Executive Officer, its President, any Executive Vice President or any Senior
Vice President and its Treasurer, any Assistant Treasurer, its Secretary or any
Assistant Secretary, and delivered to the Trustee.
"coupon" means any interest coupon appertaining to a Bearer
Security.
"Defaulted Interest" has the meaning specified in Section
2.09.
7
<PAGE> 10
"Depositary", with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, means The
Depository Trust Company, New York, New York, or such other Person designated as
Depositary by the Company in the manner provided in Section 2.01, until a
successor Depositary shall have been appointed pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" means or includes each
Person who is then a Depositary hereunder, and if at any time there is more than
one such Person, "Depositary" as used with respect to the Global Securities of
any such series means the Depositary with respect to the Securities of that
series.
"Euro-clear" means Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euro-clear System.
"Event of Default" means any event specified in Section 4.01,
continued for the period of time, if any, and after the giving of the notice, if
any, designated in Section 4.01.
"Global Security" means a Security issued to evidence all or
part of a series of Securities in accordance with Section 2.03.
"Indenture" means this instrument as originally executed or,
if amended or supplemented as provided in this Indenture, as so amended or
supplemented.
"interest", when used with respect to an Original Issue
Discount Security that by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by the declaration of
acceleration, call for redemption, repayment at the option of the holder or
otherwise.
"Officers' Certificate", when used with respect to the
Company, means a certificate signed by the Chairman of the Board, any Vice
Chairman, the Chief Executive Officer, the President, any Executive Vice
President or any Senior Vice President and by the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the
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Company. Except as otherwise provided in this Indenture, each such certificate
shall include the statements provided for in Section 15.05.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company, and who
shall be acceptable to the Trustee. Except as otherwise provided in this
Indenture, each such opinion shall include the statements provided for in
Section 15.05.
"Original Issue Discount Security" means any Security that
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 4.01. The term "principal amount" or "aggregate principal amount", when
used with respect to Original Issue Discount Securities, has the meaning (or
meanings) specified in the manner contemplated by Section 2.01 for purposes of:
determining the amount due and payable in the event of an acceleration of
Maturity as provided in Section 4.01; the redemption provisions in Article Ten;
determining whether the holders of the requisite principal amount of Outstanding
Securities of any series have given any request, demand, authorization,
direction, notice, consent or waiver under this Indenture; and determining
whether a quorum is present at a meeting of Securityholders.
"Outstanding", when used with reference to Securities of any
series or the related coupons, subject to the provisions of Section 6.04, means,
as of any particular time, all Securities of such series or any related coupons
authenticated and delivered by the Trustee pursuant to this Indenture, except:
(a) such Securities and coupons theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(b) such Securities and coupons, or portions thereof, for the
payment or redemption of which money 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 Securities are to be redeemed prior to
the Maturity thereof, notice of such redemption shall have been
provided as specified in Article Eleven, or provision satisfactory to
the Trustee shall have been made for mailing such notice; and
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(c) such Securities or coupons in lieu of or in substitution
for which other Securities or coupons shall have been authenticated and
delivered pursuant to the terms of Section 2.07, except to the extent
that a bona fide holder in due course of any such Securities shall have
presented proof satisfactory to the Trustee that such holder is a bona
fide holder in due course of any such Securities or coupons.
"Paying Agent", when used with respect to Securities of any
series, means any Person authorized by the Company to pay the principal of and
any premium or interest on any Securities of that series on behalf of the
Company.
"Person" means a corporation, an association, a partnership,
an organization, a trust, an individual, a government or a political subdivision
thereof or a governmental agency.
"Place of Payment" has the meaning stated in Section 2.01(5).
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt that was
evidenced by such particular Security. For the purposes of this definition, any
Security authenticated and delivered under Section 2.07 in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.
"principal office of the Trustee" or any other similar term
means the principal office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office, at the date of
this Indenture, is located at ____________.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security, in the form of
registered securities established pursuant to Section 2.02, that is registered
in the Security Register.
"Regular Record Date", with respect to the interest payable on
any Interest Payment Date on the
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Securities of any series, means the date specified for that purpose as
contemplated by Section 2.01.
"Responsible Officer", when used with respect to the Trustee,
means the Chairman or Vice Chairman of its board of directors, the Chairman or
Vice Chairman of the executive committee of the board of directors, the
President, any Vice President, any senior trust officer, any trust officer, any
assistant trust officer or any other officer or assistant officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be the above-named officers, or to whom any corporate trust
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Security" or "Securities" has the meaning stated in the
recitals of this Indenture and means any Security or Securities, as the case may
be, authenticated and delivered pursuant to this Indenture. Whenever this
Indenture refers to any interest on or with respect to any Security that is
represented by a coupon, such reference to the Security also shall include
reference to a coupon.
"Security Register", when used with respect to a Registered
Security, has the meaning specified in Section 2.06(b).
"Securityholder", "holder of Securities", "holder" or other
similar term, when used with respect to a Registered Security, means any Person
in whose name at the time a particular Registered Security is registered on the
Security Register and, when used with respect to a Bearer Security or coupon,
the bearer thereof.
"Special Record Date" has the meaning specified in Section
2.09.
"Stated Maturity", when used with respect to any Security or
any payment of premium or any installment of interest thereon, means the date
specified in such Security or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such payment of
premium or such installment of interest is due and payable.
"Subsidiary" means any corporation of which a majority of the
aggregate voting power of the outstanding Voting Stock at the time shall be
owned by the Company or by the Company and one or more Subsidiaries or by one or
more Subsidiaries.
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"Trust Indenture Act" means the Trust Indenture Act of 1939 as
it was in force at the date of execution of this Indenture, except as provided
in Section 8.03.
"Trustee" means the Person identified as the Trustee in the
first paragraph of this Indenture until a successor shall succeed to the trusts
created by this Indenture pursuant to the provisions of Article Five, and
thereafter shall mean such successor.
"United States" means the United States of America (including
the District of Columbia) and its possessions.
"U.S. Government Obligations" has the meaning specified in
Section 13.05(b).
"Vice President", when used with respect to the Company or the
Trustee, means any such officer whether or not designated by a number or a word
or words added before or after such title.
"Voting Stock" of a corporation or other entity means stock of
the class or classes having general voting power in an election of the board of
directors, managers or trustees of such corporation or other entity
(irrespective of whether, at the time, stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
ARTICLE TWO
THE SECURITIES AND SECURITY FORMS
SECTION 2.01. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited. Securities may be issued in one or
more series.
The terms and conditions listed below, as applicable, of any
series of Securities shall be established either in an indenture supplemental
hereto or in or pursuant to a resolution of the Board of Directors:
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from Securities of all
other series);
(2) any limit upon the aggregate principal amount of
the Securities of the series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and delivered
upon
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registration of transfer of, or in exchange for or in lieu of, other
Securities of the series pursuant to Section 2.05, 2.06, 2.07, 8.04 or
10.07);
(3) the percentage of their principal amount at which
the Securities of the series shall be issued;
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates (which may be fixed or
variable) at which the Securities of the series will bear interest, if
any, or the formula by which interest shall be calculated by the
Company or an agent designated for such purpose;
(6) the date or dates from which any such interest
will accrue or the method by which such date or dates will be
determined;
(7) the Interest Payment Dates on which such interest
shall be payable and the Regular Record Date for the interest payable
on any Registered Security on any Interest Payment Date;
(8) the place or places, if any, in addition to those
specified herein, where the principal of and any premium or interest on
Securities of the series shall be payable (the "Place of Payment"), any
Registered Securities of the series may be surrendered for registration
of transfer, Securities of the series may be surrendered for exchange
and notices and demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served and where
notices to holders pursuant to this Indenture will be published;
(9) the price or prices at which, the period or
periods within which and the terms and conditions upon which Securities
of the series may be redeemed, in whole or in part, at the option of
the Company, pursuant to any sinking fund or otherwise;
(10) the obligation, if any, of the Company to
redeem, repay or purchase Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a holder
thereof and the price or prices at which, the period or periods within
which and the other terms and conditions upon which Securities of the
series shall be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligation, which in the case of Securities of any
series that are repayable
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at the option of a holder thereof shall be set forth in the form of
such Security;
(11) any restrictive covenants included for the
benefit of the holders of the Securities of the series;
(12) any Event of Default with respect to the
Securities of such series, if not set forth herein or if different from
those set forth herein;
(13) the principal amount of the Securities of the
series that are Original Issue Discount Securities payable upon
declaration of acceleration of the maturity of the Securities of the
series;
(14) the currency or currency unit for which the
Securities of the series may be purchased, the currency or currency
unit in which the payment of principal and interest on such Securities
will be payable, the fight of the Company or the Holder to elect a
currency different from that in which the Securities of the series are
denominated for payments of principal and interest and the Exchange
Rate Agent, if any;
(15) any index used to determine the amount of
payments of principal of and interest on the Securities of the series;
(16) whether Securities of the series are to be
issuable as Registered Securities, Bearer Securities or both, whether
Securities of the series are to be issuable with or without coupons or
both and, in the case of Bearer Securities, the date as of which such
Bearer Securities shall be dated if other than the date of original
issuance of the first Security of such series of like tenor and term to
be issued;
(17) whether and on what terms the Securities of the
series will be convertible or exchangeable into shares of preferred
stock or common stock of the Company;
(18) whether any of the Securities of the series will
be issuable initially as a temporary Global Security and whether any of
the Securities of the series are to be issuable as a permanent Global
Security, or any combination thereof and, if so, the Depositary or
Depositaries therefor;
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(19) if a temporary Global Security is to be issued
with respect to such series, the requirements for certification of
ownership by non-United States persons that will apply prior to (a) the
issuance of a definitive Bearer security or (b) the payment of interest
on an Interest Payment Date that occurs before the issuance of a
definitive Bearer Security;
(20) the circumstances under which Securities of the
series may be exchanged for Securities issued in a different form;
(21) other than as set forth herein, any paying
agents, transfer agents, registrars or other agents with respect to the
Securities of the series;
(22) whether and under what circumstances the Company
will pay additional amounts to any Holder of Securities of the series
who is not a United States Person in respect of any tax, assessment or
governmental charge required to be withheld or deducted and, if so.
whether the Company will have the option to redeem rather than pay any
additional amounts;
(23) the form of Securities of such series; and
(24) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any series and the coupons appertaining to
Bearer Securities of such series, if any, issued under this Indenture in all
respects shall be equally and ratably entitled to the benefits hereof with
respect to such series without preference, priority or distinction on account of
actual time or times of authentication and delivery or Maturity of the
Securities of such series. All Securities of the same series and the coupons
appertaining to Bearer Securities of such series, if any, shall be substantially
identical except as to denomination and except as may otherwise be provided
either in an indenture supplemental hereto or a resolution of the Board of
Directors.
SECTION 2.02. Form of Securities and of Trustee's Certificate
of Authentication. The Registered Securities, if any, and the Bearer Securities
and related coupons, if any, of each series and the certificates of
authentication on the Securities shall be in substantially the form as shall be
established as provided in Section 2.01 with such appropriate insertions,
omissions, substitutions and other
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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 be determined consistently herewith by the officers executing such
Securities or coupons, as evidenced by their execution of the Securities or
coupons. If the form of Securities of any series or coupons (including any
Global Security) is established by action taken pursuant to a resolution of the
Board of Directors, a copy of an appropriate record of such action shall be
certified by the Secretary or any Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and effect
as of the date of such certificate, and shall be delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by Section 2.04(b) or
the authentication and delivery of such Securities.
The definitive Securities and coupons, if any, shall be
printed, lithographed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange, all as determined by the
officers executing such Securities or coupons, as evidenced by their execution
of such Securities or coupons.
The form of Trustee's certificate of authentication for all
Securities shall be as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities issued under the
within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By
------------------------------
Authorized Signatory
SECTION 2.03. Securities in Global Form. (a) If Securities of
a series are issuable in whole or in part in global form, as specified in the
manner contemplated by Section 2.01, then, notwithstanding the provisions of
clause (11) of Section 2.01 or Section 2.04, such Global Security shall
represent such of the Outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of Outstanding Securities from time to time endorsed thereon and that the
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aggregate amount of Outstanding Securities represented thereby from time to time
may be reduced to reflect exchanges. Any endorsement of a Global Security to
reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made in such manner and upon
instructions given by such Person or Persons as shall be specified in such
Global Security or in the Company Order to be delivered to the Trustee pursuant
to Section 2.04(b).
(b) The provisions of the last sentence of Section 2.05(b)
shall apply to any Securities represented by a Global Security if such
Securities were never issued and sold by the Company (whether because of failure
of settlement or otherwise) and the Company delivers to the Trustee the Global
Security together with written instructions with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of Section 2.05(b), notwithstanding
the absence of delivery of such Securities as contemplated thereby.
(c) Global Securities may be issued in either registered or
bearer form and in either temporary or permanent form.
SECTION 2.04. Denomination, Authentication and Dating of
Securities. (a) Securities of each series shall be issuable in such form and
denominations as shall be specified in the form of Security for such series
approved or established pursuant to Section 2.02. In the absence of any
specification, as provided in Section 2.01, with respect to the Securities of
any series, the Registered Securities of such series, if any, shall be issuable
in denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, if any, shall be issuable in the denomination of
$5,000. Each Registered Security shall be dated as of the date of its
authentication. Each Bearer Security shall be dated as of the date specified in
the manner contemplated by Section 2.01.
(b) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication. Except as otherwise
provided in this Article Two, the Trustee thereupon shall authenticate and
deliver such Securities in accordance with a Company Order; provided, however,
that in connection with its original issuance a Bearer Security may be delivered
only outside the United States and, except in the case of a temporary Global
Security, only if the Company or its agent shall have received from the Person
entitled to receive the
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Bearer Security a Bearer Security Tax Certificate and only if the Company and
the Trustee have no reason to know that such certificate is false.
(c) To the extent authorized in or pursuant to a resolution of
the Board of Directors or established in an indenture supplemental hereto, such
Company Order may be electronically transmitted and may provide instructions as
to registration of holders, principal amounts, rates of interest, Stated
Maturities and other matters contemplated by such resolution of the Board of
Directors or supplemental indenture to be so instructed in respect thereof.
(d) In authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and, subject to Section 5.01, shall be
fully protected in relying upon:
(i) a copy of the resolution or resolutions of the
Board of Directors in or pursuant to which the terms and form of the
Securities were established, 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 as of the date of such
certificate;
(ii) an executed supplemental indenture, if any;
(iii) an Officers' Certificate delivered in
accordance with Section 15.05; and
(iv) an Opinion of Counsel which shall state:
(A) that the form of such Securities and
coupons, if any, has been established by a supplemental
indenture or by or pursuant to a resolution of the Board of
Directors in accordance with Sections 2.01 and 2.02 and in
conformity with the provisions of this Indenture;
(B) that the terms of such Securities and
coupons, if any, have been established in accordance with
Section 2.01 and in conformity with the other provisions of
this Indenture;
(C) that such Securities, when authenticated
and delivered by the Trustee and issued (with coupons
attached, if applicable) by the Company in the manner and
subject to any conditions specified in such Opinion of
Counsel,
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will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization
and moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general
equity principles;
(D) that all conditions precedent, if any,
provided for in this Indenture have been complied with; and
(E) that the execution and delivery by the
Company of such Securities and coupons, if any, do not
conflict with any law, administrative regulation or court
decree applicable to the Company.
(e) If the Company shall establish pursuant to Section 2.01
that the Securities of a series are to be issued in whole or in part in the form
of one or more Global Securities, then the Company shall execute and the
Trustee, in accordance with this Section 2.04 and the Company Order with respect
to such series, shall authenticate and deliver one or more Global Securities in
permanent or temporary form that (i) shall represent and shall be denominated in
an aggregate amount equal to the aggregate principal amount of the Outstanding
Securities of such series to be represented by one or more Global Securities,
(ii) shall be registered in the name of the Depositary for such Global Security
or Securities or the nominee of such Depositary and (iii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instruction.
(f) The Trustee shall have the right to decline to
authenticate and deliver any Securities under this Section 2.04 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 or vice presidents shall
determine that such action would expose the Trustee to personal liability to
existing holders.
(g) Notwithstanding any contrary provision herein, if all
Securities of a series are not to be originally issued at one time, it shall not
be necessary for the Company to deliver to the Trustee a Company Order,
Officers' Certificate, resolution of the Board of Directors, supplemental
indenture or Opinion of Counsel otherwise required pursuant to Section 2.04(b)
or Section 2.04(d) at
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or prior to the time of authentication of each Security of such series if such
documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first Security of such series to be
issued. In such event, any subsequent request by the Company to the Trustee to
authenticate Securities of such series upon original issuance shall constitute a
representation and warranty by the Company that, as of the date of such request,
the statements made in the Officers' Certificate or other certificates delivered
pursuant to Section 2.04(d) shall be true and correct as if made on such date. A
Company Order, Officers' Certificate, resolution of the Board of Directors or
supplemental indenture delivered by the Company to the Trustee in the
circumstances set forth in this Section 2.04(g) may provide that Securities that
are the subject thereof will be authenticated and delivered by the Trustee or
its agent on original issue from time to time in the aggregate principal amount
established for such series pursuant to such procedures acceptable to the
Trustee as may be specified from time to time by Company Order upon the
telephonic, electronic or written order of persons designated in such Company
Order, supplemental indenture or resolution of the Board of Directors (any such
telephonic or electronic instructions to be promptly confirmed in writing by
such persons) and that such persons are authorized to determine, consistent with
such Company Order, supplemental indenture or resolution of the Board of
Directors, such terms and conditions of said Securities as are specified in such
Company Order, supplemental indenture or resolution of the Board of Directors.
(h) Each Depositary designated pursuant to clause (9) of
Section 2.01 for a Global Security in registered form, at the time of its
designation and at all times while it serves as Depositary, shall be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.05. Execution of Securities. (a) The Securities and
the related coupons shall be signed in the name and on behalf of the Company by
the manual or facsimile signature of its Chairman of the Board, its Chief
Executive Officer or its President or, in lieu thereof, of any Senior Vice
President or its Treasurer and attested by its Secretary, under its corporate
seal (which may be printed, engraved or otherwise reproduced thereon, by
facsimile or otherwise). For the purpose of any such signature or attestation,
the Company may adopt and use the facsimile signature of any person who has been
or is or shall be such officer.
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(b) No Security or appurtenant coupon shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose unless such
security bears thereon a certificate of authentication substantially in the form
set forth in Section 2.02, manually executed by an authorized signatory of the
Trustee. Such certificate by the Trustee upon any Security executed by the
Company shall be conclusive evidence that the Security so authenticated has been
duly authenticated and delivered under this Indenture. Except as permitted by
Section 2.07, the Trustee shall not authenticate and deliver any Bearer Security
unless all appurtenant coupons for interest then matured have been detached and
cancelled. Notwithstanding the foregoing, if any Security or portions thereof
shall have been duly authenticated and delivered hereunder but never issued and
sold by the Company (whether because of failure of settlement or otherwise), and
the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 2.10 together with a written statement stating that such
Security or portion thereof has never been issued and sold by the Company, for
all purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of this Indenture.
(c) In case any officer of the Company whose manual or
facsimile signature appears on any of the Securities or coupons shall cease to
be such officer before the Securities or coupons so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Securities or coupons nevertheless may be authenticated and delivered or
disposed of as though the person whose manual or facsimile signature appears on
such Securities or coupons had not ceased to be such officer of the Company; and
any Security or coupon may bear the manual or facsimile signature on behalf of
the Company by such persons as, at the actual date of the execution of such
Security or coupon, shall be the proper officers of the Company, although at the
date of the execution of this Indenture any such person was not such an officer.
SECTION 2.06. Exchange and Registration of Transfer of
Securities. (a) Registered Securities of any series may be exchanged for a like
aggregate principal amount of Registered Securities of other authorized
denominations and of like tenor and terms of the same series. Registered
Securities to be exchanged shall be surrendered at the office or agency to be
maintained by the Company pursuant to Section 3.02 in each Place of Payment for
such series of Registered Securities, and the Company shall execute and cause to
be registered, and the Trustee shall authenticate and deliver in exchange
therefor, the
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Registered Security or Securities which the Securityholder making the exchange
shall be entitled to receive.
(b) For each series of Registered Securities, the Company
shall cause to be kept in at least one such office or agency a Security register
(the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for registration of Registered
Securities and registration of transfer of Registered Securities as provided in
this Article Two. Each such Security Register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times such Security Registers shall be open for
inspection by the Trustee. Upon due presentment for registration of transfer of
any Registered Security of any series at any such office or agency, the Company
shall execute and register and the Trustee shall authenticate and deliver in the
name of the transferee or transferees a new Registered Security or Securities of
the same series and of like tenor and terms for an equal aggregate principal
amount. Unless otherwise provided (pursuant to Section 2.01 or otherwise), the
Company initially appoints the Trustee, at the principal office of the Trustee,
as a Security registrar for each series of Registered Securities.
(c) All Registered Securities presented for registration of
transfer or for exchange or payment, if so required by the Company or the
Trustee, shall be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee duly
executed by, the holder or his attorney duly authorized in writing.
(d) To the extent specified in the manner provided by Section
2.01, Registered Securities or Bearer Securities of any series may be issued in
exchange for Bearer Securities (except as otherwise specified in the manner
contemplated by Section 2.01 with respect to a Bearer Security in global form)
of the same series, of any authorized denomination and of like tenor and terms
and aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any office or agency specified in the manner provided by Section
2.01, with all unmatured coupons and all unpaid matured coupons thereto
appertaining. If the holder of a Bearer Security is unable to produce any such
unmatured coupon or coupons or unpaid matured coupon or coupons, such exchange
may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company and the Trustee in an amount equal to the amount
represented by such missing coupon or coupons, or the surrender of such missing
coupon or coupons may be waived by
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the Company and the Trustee if there is furnished to them such security or
indemnity as they may require to hold harmless each of them and any Paying
Agent. If thereafter the holder of such Security shall surrender to any Paying
Agent any such missing coupon in respect of which such a payment shall have been
made, such holder shall be entitled to receive the amount of such payment;
provided, however, that, except as otherwise provided in Section 3.02, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the holder
making the exchange is entitled to receive.
(e) If at any time the Depositary for the Global Securities of
a series notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Securities of such series or if at any time the
Depositary for the Registered Securities of such series shall no longer be
eligible under Section 2.03 because it no longer is a clearing agency registered
under the Securities Exchange Act of 1934 and any other applicable statute or
regulation, the Company shall appoint a successor Depositary with respect to the
Global Securities of such series. If a successor Depositary for the Global
Securities of such series is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such ineligibility, the
Company's election pursuant to Section 2.01(9) shall no longer be effective with
respect to the Securities of such series and the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.
(f) The Company at any time and in its sole discretion may
determine that the Securities of any series issued in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such
series in definitive form and in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.
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(g) If specified by the Company pursuant to Section 2.01 with
respect to a series of Securities, the Depositary for such series of Securities
may surrender a Global Security for such series of Securities in exchange in
whole or in part for Securities of such series of like tenor and terms and in
definitive form on such terms as are acceptable to the Company and such
Depositary. Thereupon the Company shall execute, and the Trustee shall
authenticate and deliver:
(i) to each Person specified by such Depositary a new
Security or new Securities of the same series, of like tenor and terms
and of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security of like
tenor and terms and in a denomination equal to the difference, if any,
between the principal amount of the surrendered Global Security and the
aggregate principal amount of Securities delivered to holders thereof.
(h) In any exchange provided for in Section 2.06(e), Section
2.06(f) or Section 2.06(g), the Company will execute and the Trustee will
authenticate and deliver Securities (i) in definitive registered form in
authorized denominations, if the Securities of such series are issuable as
Registered Securities, (ii) in definitive bearer form in authorized
denominations, with unmatured coupons attached, if the Securities of such series
are issuable as Bearer Securities or (iii) as either Registered or Bearer
Securities, if the Securities of such series are issuable in either form;
provided, however, that (A) no definitive Bearer Security shall be delivered in
exchange for a temporary Global Security unless the Company or its agent shall
have received from the person entitled to receive the definitive Bearer Security
a Bearer Security Tax Certificate, (B) delivery of a Bearer Security shall occur
only outside the United States and (C) no definitive Bearer Security will be
issued if the Company or the Trustee has reason to know that such certificate is
false.
(i) Upon the exchange of all of a Global Security for
Securities in certificated form, such Global Security shall be cancelled by the
Trustee. The exchange of any portion of a Global Security for Securities in
certificated form shall be subject to Section 2.03(a). Registered Securities
issued in exchange for all or part of a Global Security shall be registered in
such names and in such authorized denominations as the Depositary for such
Global Security, pursuant to instructions from its direct or
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indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Registered Securities to the persons in whose names such
Securities are so registered. The Trustee shall deliver Bearer Securities issued
in exchange for all or part of a Global Security to the persons, and in such
authorized denominations, as the Depositary for such Global Security, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee; provided, however, that (A) no definitive Bearer Security
shall be delivered in exchange for all or part of a temporary Global Security
unless the Company or its agent shall have received from the person entitled to
receive the definitive Bearer Security a Bearer Security Tax Certificate, (B)
delivery of a Bearer Security shall occur only outside the United States and (C)
no definitive Bearer Security will be issued if the Company or the Trustee has
reason to know that any such certificate is false.
(j) No service charge shall be made for any exchange or
registration of transfer of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such exchange or registration of transfer.
(k) The Company shall not be required (i) to issue, register
the transfer of or exchange Securities of any particular series during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities of such series selected for redemption under
Section 10.03 and ending at the close of business on the day of such mailing,
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except the unredeemed portion of any
Registered Security being redeemed in part or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series, provided that such
Registered Security shall be surrendered immediately for redemption with written
instruction for payment consistent with the provisions of this Indenture.
(l) Notwithstanding anything herein to the contrary: the
exchange of Bearer Securities for Registered Securities shall be subject to
applicable laws and regulations in effect at the time of exchange; and neither
the Company nor the Trustee or any Security registrar shall exchange any Bearer
Securities into Registered Securities if it has received an Opinion of Counsel
that as a result of such exchanges the Company could suffer adverse consequences
under the United States Federal income tax laws and
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regulations then in effect and the Company has delivered to the Trustee a
Company Order directing the Trustee not to make such exchanges thereafter unless
and until the Trustee receives a subsequent Company Order to the contrary. The
Company shall deliver copies of such Company Order to the Security registrar.
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Securities.
(a) In case any temporary or definitive Security of any series or any related
coupon shall become mutilated or be destroyed, lost or stolen, the Company in
its discretion may execute, and upon its request and in the absence of notice to
the Company and the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Trustee shall authenticate and deliver a new Security
of the same series or related coupon, of equal aggregate principal amount and of
like tenor and terms bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Security or coupon, or in lieu of
and in substitution for the Security or coupon so destroyed, lost or stolen. In
every case the applicant for a substituted Security or coupon shall furnish to
the Company and to the Trustee such security or indemnity as may be required by
them to hold each of them harmless, and, in every case of destruction, loss or
theft, the applicant also shall furnish to the Company and to the Trustee
evidence to their satisfaction of the destruction, loss or theft of such
security or coupon and of the ownership of such Security or coupon.
(b) The Trustee may authenticate any such substitute Security
and deliver the same upon the written request or authorization of any officer of
the Company. Upon the issuance of any substitute Security or coupon, 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
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith. In case any Security or coupon which has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the Company,
instead of issuing a substitute Security or coupon, may pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Security or coupon) if the applicant for such payment shall furnish to the
Company and to the Trustee such security or indemnity as may be required by them
to hold each of them harmless and, in case of destruction, loss or theft,
evidence satisfactory to the Company and the Trustee of the destruction, loss or
theft of such Security or coupon and of the ownership of such Security or
coupon.
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(c) Every substitute Security or coupon issued pursuant to the
provisions of this Section 2.07 by virtue of the fact that any Security or
coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
or coupon 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 Securities
or coupons of the relevant series duly issued under this Indenture. All
Securities or coupons shall be held and owned by the holders upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons 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.
(d) Notwithstanding the foregoing, the payment of principal of
and any premium and interest on Bearer Securities, except as otherwise provided
in Section 3.02, shall be payable only at an office or an agency located outside
of the United States, and, with respect to any coupons, interest represented
thereby shall be payable only upon presentation and surrender of such coupons.
SECTION 2.08. Temporary Securities. (a) Pending the
preparation of definitive Securities of any series, the Company may execute and
the Trustee shall authenticate and deliver temporary Securities (printed or
lithographed). Temporary Securities shall be issuable in any authorized
denomination, and substantially in the form of the definitive Securities of such
series (and of like tenor and terms) in lieu of which they are issued in
registered form or, if authorized, in bearer form with one or more coupons or
without coupons, but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Company.
In the case of Securities of any series issuable as Bearer Securities, such
temporary Securities may be in global form, representing all or any part of the
Outstanding Securities of such series.
(b) Unless otherwise provided pursuant to Section 2.01:
(i) Except in the case of temporary Securities in global
form, every such temporary Security shall be authenticated by the
Trustee in substantially the same manner, and with the same effect, as
the definitive Securities. Without unreasonable delay the Company will
execute and deliver to the Trustee definitive
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Securities of such series and thereupon any or all temporary Securities
of such series (accompanied, if applicable, by all unmatured coupons
and all unpaid matured coupons appertaining thereto) may be surrendered
in exchange therefor at the principal office of the Trustee, and the
Trustee shall authenticate and deliver in exchange for such temporary
Securities an equal aggregate principal amount of definitive Securities
of such series of authorized denominations. Such exchange shall be made
at the Company's expense and without any charge to the holder. Until so
exchanged, the temporary Securities of any series in all respects shall
be entitled to the same benefits under this Indenture as definitive
Securities of such series authenticated and delivered under this
Indenture. Notwithstanding the foregoing, no Bearer Security shall be
delivered in exchange for a Registered Security, and a Bearer Security
shall be delivered in exchange for a Bearer Security only in compliance
with the conditions set forth in Section 2.06.
(ii) If Securities of any series are issued in temporary
global form, any such temporary Global Security, unless otherwise
provided pursuant to Section 2.01, shall be delivered to the Depositary
for the benefit of Euro-clear and CEDEL S.A. for credit to the
respective accounts of the beneficial owners of such Securities or to
such other accounts as they may direct.
(iii) Any such temporary Global Security shall be
exchangeable, on the terms and in the manner set forth therein, in
whole or in part, for an equal aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like
tenor and terms as the portions of such temporary Global Security to be
exchanged. Any definitive Bearer Security shall be delivered in
exchange for a portion of a temporary Global Security only upon receipt
by the Trustee from the Person entitled to receive such definitive
Bearer Security of a Bearer Security Tax Certificate.
(iv) Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall be entitled in all respects to
the same benefits under this Indenture as definitive Securities of the
same series and of like tenor and terms authenticated and delivered
hereunder, except that any interest payable with respect to a temporary
Global Security will be paid as specified therein.
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SECTION 2.09. Payment of Interest; Interest Rights. Interest
on any Registered Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Registered Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the holder of
such coupon when due in accordance with the provisions of this Indenture.
Payment of interest on any Registered Security may be made as provided in
Section 3.02. Except as otherwise provided in the terms of any particular series
pursuant to Section 2.01. interest will be calculated on the basis of a year
consisting of twelve 30-day months.
Any interest on any Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date ("Defaulted
Interest") forthwith shall cease to be payable to the holder on the relevant
Regular Record Date by virtue of having been such holder; and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (i) or (ii) below:
(i) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names such 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 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 provided
in this clause (i). Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall
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be not more than 15 nor fewer than ten days prior to the date of the
proposed payment and not fewer than ten days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee promptly
shall notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
to be mailed, first class, postage prepaid, to each holder at his
address as it appears in the Security Register, not fewer 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 given as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (ii).
(ii) The Company may make payment of any Defaulted
Interest on any such Security in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
the Securities of that series may be listed, and upon such notice as
may be required by any such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause
(ii), such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section 2.09, each
Security of any series delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security of such series
shall carry the rights to interest accrued and unpaid, and to accrue, that were
carried by such other Security.
Subject to the limitations set forth in Section 3.02, the
holder of any coupon appertaining to a Bearer Security shall be entitled to
receive the interest payable on such coupon upon presentation and surrender of
such coupon on or after the Interest Payment Date of such coupon at an office or
agency maintained for such purpose pursuant to Section 3.02.
SECTION 2.10. Cancellation of Securities Paid, etc. All
Securities and coupons surrendered for the purpose of payment, exchange or
registration of transfer, if surrendered to the Company or any Paying Agent or
any Security registrar, shall be delivered to the Trustee and promptly cancelled
by the Trustee or, if surrendered to the Trustee, promptly shall be cancelled by
it; and no
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Securities or coupons shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee may destroy
cancelled Securities or coupons and will deliver a certificate of such
destruction to the Company.
ARTICLE THREE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal and Interest. The Company
duly and punctually will pay or cause to be paid the principal of and any
premium and interest on the Securities of each series at the places, at the
respective times and in the manner provided in this Indenture and in the
Securities. Any interest due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature.
SECTION 3.02. Offices for Notices and Payments, etc. So long
as any Securities of a series remain Outstanding, the Company will maintain in
each Place of Payment for such series of Securities an office or agency where
the Securities of that series (but, except as otherwise provided below, unless
such Place of Payment is located outside the United States, not Bearer
Securities) may be presented for payment, for registration of transfer and for
exchange as provided in this Indenture and where notices and demands to or upon
the Company in respect of the Securities or of this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain, subject to any laws or regulations applicable thereto, an office or
agency in a Place of Payment for such series that is located outside the United
States where Securities of such series and the related coupons may be presented
for payment. The Company will give to the Trustee prompt written notice of the
location of each such office or agency and of any change of location thereof. In
case the Company shall fail to maintain any such office or agency 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
office of the Trustee, and the Company hereby initially appoints the Trustee its
agent to receive all such presentations and demands, except that Bearer
Securities of that series and the related coupons may be presented for payment
at the place specified for that purpose pursuant to Section 2.01(5). Unless
otherwise provided pursuant to Section 2.01, the Company hereby
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initially designates as the Place of Payment for each series of Securities
(other than Bearer Securities of that series and the related coupons) the
Borough of Manhattan, The City of New York, New York and appoints the Trustee,
at the principal office of the Trustee, as Paying Agent in such city.
Notwithstanding any other provisions to the contrary, the Company at its option
may make payment of principal and any premium and interest with respect to any
Registered Security by check mailed to the Person entitled thereto, as such
address appears on the Security Register, except that a holder of $10,000,000 or
more in aggregate principal amount of Securities of such series and of like
tenor and terms will be entitled to receive payments by wire transfer of
immediately available funds if appropriate wire transfer instructions shall have
been received in writing by the Trustee not later than ten Business Days prior
to the applicable Interest Payment Date.
No payment of principal of or any premium or interest on
Bearer Securities shall be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
provided, however, that payment of principal of and any premium and interest on
any Bearer Security may be made at an office or agency of, and designated by,
the Company located in the United States if (but only if) payment of the full
amount of such principal, premium or interest at all offices outside the United
States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions and the Trustee receives an Opinion of Counsel that such
payment within the United States is legal. Unless otherwise provided as
contemplated by Section 2.01 with respect to any series of Securities, at the
option of the holder of any Bearer Security or related coupon payment may be
made by mailing a check to an address outside the United States or by transfer
to an account maintained by the payee with a bank located outside the United
States.
The Company also from time to time may designate one or more
offices or agencies (in or outside of such Place of Payment) where the
Securities of one or more series and any appurtenant coupons (subject to the
preceding paragraph) may be presented or surrendered for any and all such
purposes, and from time to time may rescind such designations. The Company will
give prompt written notice to the Trustee of any such designation and any change
in the location of any such office or agency.
SECTION 3.03. Provisions as to Paying Agent. (a) The Company,
with respect to the Securities of each series,
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prior to each due date of principal of or any premium or interest on such
Securities, will deposit with the Paying Agent for such Securities 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 to such principal,
premium or interest. If the Company shall appoint a Paying Agent other than the
Trustee with respect to the Securities of any series, the Company will notify
the Trustee of its making, or failure to make, any such payment; and the Company
also shall cause any such Paying Agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 3.03, as follows:
(1) that it will hold all sums held by it as such
agent for the payment of the principal of or any premium or interest on
such Securities (whether such sums have been paid to it by the Company
or by any other obligor on such Securities) in trust for the benefit of
the Persons entitled thereto;
(2) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on such Securities) to
make any payment of the principal of or any premium or interest on such
Securities when the same shall be due and payable; and
(3) that it forthwith will pay to the Trustee, at any
time during the continuance of an Event of Default, upon the written
request of the Trustee, all sums so held by it as such agent.
(b) If the Company shall act as its own Paying Agent with
respect to the Securities of any series, on or before each due date of the
principal of or any premium or interest on the Securities of such series, it
will set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal, premium or interest so
becoming due and will notify the Trustee of any failure to take such action and
of any failure by the Company (or by any other obligor under such Securities) to
make any payment of the principal of or any premium or interest on such
Securities when the same shall become due and payable.
(c) Notwithstanding anything in this Section 3.03 to the
contrary, the Company, at any time, for the purpose of obtaining a satisfaction
and discharge of this Indenture or for any other reason, may pay or by Company
Order direct any Paying Agent to pay to the Trustee all sums held in trust by
the Company or any Paying Agent under this
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Indenture, such sums to be held by the Trustee upon the trusts contained in
this Indenture.
(d) Notwithstanding anything in this Section 3.03 to the
contrary, the agreement to hold sums in trust as provided in this Section 3.03
is subject to Section 13.03 and Section 13.04.
SECTION 3.04. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each calendar year
commencing with the first calendar year following the issuance of Securities of
any series under this Indenture, a written certificate of the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company, covering the period from the date of issuance of such
Securities to the end of the calendar year in which such Securities were issued,
in the case of the first such certificate, and covering the preceding calendar
year, in the case of each subsequent certificate, stating, as to each signer of
such certificate, that:
(1) a review of the activities of the Company during
the year and of performance under this Indenture has been made under
his supervision;
(2) to the best of his knowledge, based on such
review, the Company has fulfilled all its conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the fulfillment of any such condition or covenant,
specifying each such default known to him and the nature and status of
such default; and
(3) such certificate sets forth as of the end of such
year a list of all Principal Constituent Banks.
SECTION 3.05. Notice of Defaults. The Company will deliver to
the Trustee within five days after the occurrence thereof written notice of any
event which with the giving of notice or the lapse of time or both would be an
Event of Default under Section 4.01.
SECTION 3.06. Corporate Existence. Except as otherwise
provided in Article Nine, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the
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conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Securityholders.
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 4.01. Events of Default. "Event of Default", when used
with respect to Securities of any series, means each of the following events
unless it is either inapplicable to a particular series or is specifically
deleted or modified in the supplemental indenture or resolution of the Board of
Directors under which such series of Securities is issued or in the form of
Security for such series:
(a) default in the payment of any installment of interest upon
any of the Securities of that series as and when the same shall become
due and payable, and continuance of such default for a period of 30
days;
(b) default in the payment of the principal of or any premium
on any of the Securities of that series as and when the same shall
become due and payable at their Stated Maturity, upon redemption, by
declaration or otherwise;
(c) default in the payment of any sinking fund installment or
analogous obligation as and when the same shall become due and payable
by the terms of the Securities of that series;
(d) a default or event of default as defined or designated in
any mortgage, indenture, loan agreement or instrument under which there
may be issued or borrowed, or by which there is secured or evidenced,
any indebtedness of the Company (other than Securities of such series
or indebtedness owed by the Company to any Subsidiary) or any
Subsidiary (other than indebtedness of any Subsidiary owing to the
Company or to another Subsidiary), whether such indebtedness now exists
or shall be created hereafter, shall happen and (i) not less than
$10,000,000 of such indebtedness shall be past due under such mortgage,
indenture, loan agreement or instrument or such default or event of
default shall result in not less than $10,000,000 of such indebtedness
becoming or being declared due and payable and (ii) such indebtedness
or such declaration, as the case may be, shall not have been discharged
or
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rescinded or annulled within 20 days after the date on which written
notice thereof is given 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 Securities of that series then Outstanding;
(e) a final judgment or judgments or order or orders for the
payment of money in excess of $10,000,000 shall be entered against the
Company or one or more Principal Constituent Banks and within 90 days
after entry thereof such judgment or judgments or order or orders shall
not have been discharged or the execution thereof stayed pending appeal
or within 90 days after the expiration of any such stay such judgment
or judgments or order or orders shall not have been discharged;
(f) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Securities of such series or in this Indenture (other
than a covenant or agreement a default in the performance of which or
the breach of which specifically is provided for elsewhere in this
Section 4.01 or which expressly has been included in this Indenture
solely for the benefit of one or more series of Securities other than
such series), and continuance of such failure for a period of 90 days
after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given 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 Securities of such series at
the time Outstanding;
(g) a court or governmental authority 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 60 consecutive days; or
(h) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or shall consent to the entry of an order for relief in an
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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 similar official) of the
Company or for substantially all 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 shall take any
corporate action in furtherance of any of the foregoing.
If an Event of Default with respect to the Securities of any
series at the time Outstanding occurs and is continuing, then and in each such
case, unless the principal of all the Securities of such series already shall
have become due and payable, either the Trustee or the holders of not less than
25% in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the principal amount of all the Securities of that
series to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable. This provision, however,
is subject to the condition that, at any time after such a declaration of
acceleration, and before any judgment or decree for the payment of the money due
shall have been obtained or entered as hereinafter provided, the holders of a
majority in aggregate principal amount of the Securities of such series then
Outstanding, by written notice to the Company and to the Trustee, may waive all
defaults and rescind and annul such declaration and its consequences, if:
(1) the Company shall pay or shall deposit with
the Trustee a sum sufficient to pay:
(A) all matured installments of interest on
all the Securities of that series and the principal of and any
premium on any and all Securities of that series that shall
have become due otherwise than by acceleration (with interest
on overdue installments of interest (to the extent that
payment of such interest is enforceable under applicable law)
and on such principal and premium at the rate borne by the
Securities of that series, to the date of such payment or
deposit); and
(B) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
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(2) any and all defaults with respect to Securities
of that series under this Indenture, other than the nonpayment of
principal of and any premium and accrued interest on Securities that
shall have become due by acceleration, shall have been cured or waived
as provided in Section 4.07.
No such waiver or rescission and annulment shall extend or shall affect any
subsequent default or shall impair any right consequent thereon.
In case the Trustee or any Securityholder 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 or any
Securityholder, then and in every such case the Company, the Trustee and such
Securityholders, subject to any determination in such proceeding, shall be
restored respectively to their several positions and rights under this
Indenture, and all rights, remedies and powers of the Company, the Trustee and
such Securityholders shall continue as though no such proceeding had been taken.
SECTION 4.02. Payment of Securities on Default; Suit Therefor.
(a) In case default shall be made in the payment of (i) any installment of
interest upon any of the Securities as and when the same shall become due and
payable, and such default shall have continued for a period of 30 days, or (ii)
the principal of or any premium on any of the Securities as and when the same
shall have become due and payable whether at Maturity of the Securities, by
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Securities, the whole
amount that then shall have become due and payable on all such Securities for
principal, premium or interest, or any combination thereof, as the case may be,
with interest upon the overdue principal and premium and (to the extent that
payment of such interest is enforceable under applicable law) upon the overdue
installments of interest, at the rate borne by the Securities; and, in addition,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents, attorneys and counsel.
(b) 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
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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 the Securities and coupons and collect in the manner
provided by law out of the property of the Company or any other obligor on the
Securities and coupons, wherever situated, the money adjudged or decreed to be
payable.
(c) In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other obligor on the
Securities and coupons under Title 11 of the 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 on the
Securities and coupons, or to the creditors or property of the Company or such
other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as expressed in the Securities or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 4.02, 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 any premium and
interest owing and unpaid in respect of the Securities, and, in case of any
judicial proceedings, (i) 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 the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Securityholders allowed in such judicial proceedings relative to the Company or
any other obligor on the Securities and coupons, its or their creditors, or its
or their property, and (ii) to collect and receive any money 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 any amount due it for reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel and any
other amounts due the Trustee under Section 5.06. To the extent that such
payment of reasonable compensation, expenses and counsel fees out of the trust
estate in any such proceedings shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other
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property which the holders of the Securities and coupons may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
(d) Nothing contained in this Section 4.02 shall be deemed to
authorize the Trustee to authorize or consent to or adopt on behalf of any
Securityholder any plan of reorganization or arrangement affecting the
Securities or related coupons or the rights of any Securityholder, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
(e) All rights of action and of asserting claims under this
Indenture, or under any of the Securities or related coupons, may be enforced by
the Trustee without the possession of any of the Securities or coupons, or the
production thereof in 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, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, shall be for
the ratable benefit of the holders of the Securities and related coupons.
SECTION 4.03. Application of Money Collected by Trustee. Any
money collected by the Trustee with respect to any series of Securities or
related coupons pursuant to Section 4.02 shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such money, upon presentation of the several Securities of such series or
coupons, or both, as the case may be, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts then due the Trustee
under Section 5.06;
SECOND: In case the principal of the Outstanding Securities of
that series shall not have become due and be unpaid, to the payment of
interest on the Securities of that series in the order of the Maturity
of the installments of such interest, with interest (to the extent
enforceable under applicable law) upon the overdue installments of
interest at the rate borne by the Securities of that series, such
payments to be made ratably to the persons entitled thereto; and
THIRD: In case the principal of the Outstanding Securities of
that series shall have become due, by declaration or otherwise, to the
payment of the whole
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amount then owing and unpaid upon the Securities of that series for
principal and any premium and interest, with interest on the overdue
principal and any premium and (to the extent enforceable under
applicable law) upon overdue installments of interest at the rate borne
by the Securities of that series; and in case such money shall be
insufficient to pay in full the whole amounts so due and unpaid upon
the Securities of that series, then to the payment of such principal
and any premium and interest without preference or priority of
principal over interest, or of interest over principal, or of any
premium over principal or interest, or of principal or interest over
any premium or of any installment of interest over any other
installment of interest, or of any Security of that series over any
other Security of that series, or of any coupon related to a Security
of a series over any other coupon related to a Security of the same
series, ratably to the aggregate of such principal and any premium and
accrued and unpaid interest.
SECTION 4.04. Proceedings by Securityholders. No holder of any
Security of any series or any related coupon shall have any right to institute
any suit, action or proceeding in equity or at law upon or under or with respect
to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy under this Indenture, unless such holder previously shall have
given to the Trustee written notice of default and of the continuance thereof,
as provided in Section 4.01, and unless also (i) the holders of not less than
25% in aggregate principal amount of the Securities of that series then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee under this Indenture and
shall have offered to the Trustee such reasonable indemnity as the Trustee may
require against the costs, expenses and liabilities to be incurred in compliance
with such request, (ii) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and (iii) no direction
inconsistent with such written request has been given to the Trustee during such
60-day period by the holders of a majority in principal amount of the
Outstanding Securities of that series; it being understood and intended, and
being expressly covenanted by each Person who acquires and holds a Security or
related coupon with every other such Person, that no one or more holders of
Securities shall have any right in any manner whatever by virtue of or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of any other holder of such Securities or coupons, or to obtain or seek
to obtain priority over or
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preference to any other such holder, or to enforce any right under this
Indenture, except in the manner provided in this Section 4.04 and for the equal,
ratable and common benefit of all holders of Securities and coupons.
Notwithstanding any other provision of this Indenture,
however, the right of any holder of any Security to receive payment of the
principal of and any premium and interest on such Security on or after the
respective Stated Maturities, or to institute suit for the enforcement of any
such payment on or after such respective dates against the Company, shall not be
impaired or affected without the consent of such holder.
SECTION 4.05. Proceedings by Trustee. In case of an Event of
Default under this Indenture, the Trustee in its discretion may proceed to
protect and enforce its rights and the rights of the Securityholders by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any 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
proper remedy or legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 4.06. Remedies Cumulative and Continuing; Delay or
Omission Not Waiver. All rights, powers and remedies conferred upon or reserved
to the Trustee or to the Securityholders, to the extent permitted by law, shall
be deemed cumulative and not exclusive of any thereof or of any other rights,
powers and remedies available to the Trustee or the holders of the Securities
and related coupons, now or hereafter existing, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture; and no delay or omission of the Trustee
or of any holder of any of the Securities or related coupons to exercise any
such right, power or remedy shall impair any such right, power or remedy, or
shall be construed to be a waiver of any default or an acquiescence in such
default; and, subject to the provisions of Section 4.04, every power and remedy
conferred upon or reserved 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. The assertion of any right, power or remedy
shall not prevent the concurrent assertion of any other right, power or remedy.
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SECTION 4.07. Direction of Proceedings and Waiver of Defaults
by Majority of Securityholders. (a) The holders of a majority in aggregate
principal amount of the Securities of all series affected (voting as one class)
at the time Outstanding determined in accordance with Section 6.04 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; provided, however, that (i) such direction may not be in
conflict with law or this Indenture or expose the Trustee to personal liability
or be unduly prejudicial to the holders of the Securities and related coupons
not joining in the direction, and (ii) the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with this Indenture and
such direction.
(b) Prior to any declaration that the principal of the
Outstanding Securities of any series is due and payable, the holders of a
majority in aggregate principal amount of the Securities of that series at the
time Outstanding on behalf of the holders of all of the Securities of that
series may waive any past default or Event of Default under this Indenture and
its consequences except a default under a covenant in this Indenture that,
pursuant to Section 8.02, cannot be modified without the consent of each holder
of a Security of the series affected thereby. Upon any such waiver the Company,
the Trustee and the holders of the Securities of that series and the related
coupons shall be restored to their former positions and rights under this
Indenture, 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 under this Indenture shall have been
waived as permitted by this Section 4.07, such default or Event of Default, for
all purposes of the Securities, the related coupons and this Indenture, shall be
deemed to have been cured and to be not continuing.
SECTION 4.08. Notice of Defaults. The Trustee, within 90 days
after the occurrence of a default with respect to Securities of any series,
shall mail to all Securityholders of that series, at their addresses shown on
the Security Register, notice of all such defaults known to the Trustee, unless
such defaults shall have been cured or waived before the giving of such notice
(the term "default" for the purpose of this Section 4.08 being hereby defined to
mean any event which constitutes or after notice or lapse of time or both would
constitute an Event of Default); and provided that, except in the case of
default in the payment of the principal of or any premium or interest on any of
the Securities of that series or in the making of any sinking
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fund payment or analogous obligation with respect to Securities of that 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 or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Securityholders of that
series.
SECTION 4.09. Undertaking to Pay Costs. All parties to this
Indenture agree, and each holder of any Security or coupon by his acceptance
thereof shall be deemed to have agreed, that any court in its discretion may
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 in its discretion may assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant; provided, however, that the provisions of this Section 4.09 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more than
10% in principal amount of the Outstanding Securities of that series, or to any
suit instituted by any Securityholder for the enforcement of the payment of the
principal of or any premium or interest on any Security on or after the
respective Stated Maturities (or, in the case of redemption or repayment, on or
after the redemption date or repayment date).
ARTICLE FIVE
CONCERNING THE TRUSTEE
SECTION 5.01. Duties and Responsibilities of Trustee. In case
an Event of Default 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, its own willful misconduct or any action or failure to act taken
or omitted by it in bad faith, except that:
(a) except during the continuance of an Event of Default:
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(1) the duties and obligations of the
Trustee shall be determined solely by the express provisions
of this Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on the part
of the Trustee, the Trustee conclusively may 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 or
opinions that by any provisions of this Indenture specifically
are required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal
amount of the Securities of any series at the time Outstanding
(determined as provided in Section 6.04) 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 it shall have reasonable grounds for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
Whether or not expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the
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Trustee shall be subject to the provisions of this Section 5.01.
The provisions of this Section 5.01 are in furtherance of and
subject to Sections 315 and 316 of the Trust Indenture Act.
SECTION 5.02. Reliance on Documents, Opinions, etc. Subject to
the applicable provisions of the Trust Indenture Act and in furtherance thereof
and subject to the provisions of Section 5.01:
(a) the Trustee may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, 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 resolution of the Board of Directors
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 and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it under this Indenture in
good faith and in accordance with such 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 that 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;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument,
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opinion, report, notice, request, consent, order, approval, bond,
debenture, coupon or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books and records of the Company to the extent reasonably
necessary to verify such facts or matters; and
(g) the Trustee may execute any of the trusts or powers under
this Indenture or perform any duties under this Indenture either
directly or by or through agents or attorneys and the Trustee shall not
be responsible for any misconduct or negligence on the part of any
agent or attorney appointed by it with due care under this Indenture.
SECTION 5.03. No Responsibility for Recitals, etc. The
recitals contained in this Indenture and in the Securities (except in the
Trustee's certificate of authentication) and in any coupons shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities or the coupons. The
Trustee shall not be accountable for the use or application by the Company of
any Securities or the proceeds of any Securities authenticated and delivered by
the Trustee.
SECTION 5.04. Trustee, Paying Agents or Registrar May Own
Securities. Subject to the applicable provisions of the Trust Indenture Act, the
Trustee or any Paying Agent or Security registrar, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not Trustee, Paying Agent or Security registrar.
SECTION 5.05. Money to Be Held in Trust. Subject to the
provisions of Section 13.03 and Section 13.04, all money received by the
Trustee, until used or applied as herein provided, shall be held in trust for
the purposes for which it was received. Money held by the Trustee need not be
segregated from other funds except as provided by law. The Trustee shall be
under no liability for interest on any money received by it under this
Indenture, except as the Company and the Trustee otherwise may agree.
SECTION 5.06. Compensation and Expenses of Trustee. The
Company will pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable
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compensation for all services rendered by it under this Indenture (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 reasonable expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may be attributable to its
negligence, bad faith or willful misconduct. The Company also covenants to
indemnify the Trustee for, and to hold it harmless against, any loss, liability
or expense incurred without negligence, bad faith or willful misconduct on the
part of the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and expenses of
defending itself against any claim of liability in connection with the exercise
or performance of any of its powers under this Indenture. The obligations of the
Company under this Section 5.06 shall constitute additional indebtedness under
this Indenture.
SECTION 5.07. Officers' Certificate as Evidence. Subject to
the provisions of Section 5.01, 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 under this
Indenture, such matter (unless other evidence in respect thereof be herein
specifically prescribed), in the absence of negligence, bad faith or willful
misconduct on the part of the Trustee, may be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee, and such
Officers' Certificate, in the absence of negligence, bad faith or willful
misconduct 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 of such Officers' Certificate.
SECTION 5.08. Eligibility of Trustee. The Trustee under this
Indenture shall at all times be a corporation organized and doing business under
the laws of the United States or any State thereof or of the District of
Columbia (or a corporation or other person permitted to act as Trustee by the
Commission) authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal, State or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the
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requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 5.08 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. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 5.08, the Trustee shall resign immediately in the manner and with the
effect specified in Section 5.09. Neither the Company nor any person directly or
indirectly controlling, controlled by, or under common control with the Company
shall serve as Trustee under this Indenture.
SECTION 5.09. Resignation or Removal of Trustee. (a) The
Trustee may resign at any time by giving written notice of such resignation to
the Company, by mailing notice of such resignation to the holders of Registered
Securities at their addresses as they shall appear on the Security Register and,
if any Bearer Securities are Outstanding, by publishing notice of such
resignation in a newspaper of general circulation, in each place of payment for
such Bearer Securities, customarily published at least once a day for at least
five days in each calendar week.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the
provisions of Section 310(b) of the Trust Indenture Act after written
request therefor by the Company or by any Securityholder who has been a
bona fide holder of a Security or Securities for at least six months,
or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 5.08 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 a 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 by written
instrument, executed by Company Order authorized by the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor Trustee (with written notice of such removal mailed to the
holders of Registered Securities at their
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address as they shall appear on the Security Register, and, if any Bearer
Securities are Outstanding, by publishing notice of such resignation in a
newspaper of general circulation, in each place of payment for such Bearer
Securities, customarily published at least once a day for at least five days in
each calendar week), or, subject to the provisions of Section 4.09, any
Securityholder who has been a bona fide holder of a Security or Securities for
at least six months, on behalf of himself and all others similarly situated, may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(c) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company promptly shall appoint a successor Trustee by a Company
Order authorized by the Board of Directors, one copy of which instrument shall
be delivered to the retiring Trustee and one copy to the successor Trustee. If,
within one year after such resignation, removal or incapability or the
occurrence of such vacancy, a successor Trustee shall be appointed by the
holders of a majority in principal amount of the Securities (voting as a single
class) at the time Outstanding by instrument or instruments delivered to the
Company and the retiring Trustee, the successor Trustee so appointed, forthwith
upon its acceptance of such appointment, shall become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Securityholders and
accepted appointment in the manner provided in Section 5.10 within 60 days after
notice of the resignation or removal of the Trustee is mailed to the
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 Security or Securities for at least six
months, subject to the provisions of Section 4.09, on behalf of himself and all
others similarly situated, may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(d) The holders of a majority in aggregate principal amount of
the Securities (voting as a single class) at the time Outstanding at any time,
upon notice to the Trustee, may remove the Trustee.
(e) Any removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 5.09 shall become
effective upon acceptance of appointment by the successor Trustee as provided in
Section 5.10. Any resignation of the Trustee shall become
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effective only upon the appointment of a successor Trustee and upon the
acceptance of appointment by the successor Trustee as provided in Section 5.10.
SECTION 5.10. Acceptance by Successor Trustee. Any successor
Trustee appointed as provided in Section 5.09 shall execute, acknowledge and
deliver to the Company and to its predecessor Trustee an instrument accepting
such appointment under this Indenture, and thereupon the resignation or removal
of the predecessor Trustee 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 of its predecessor under this Indenture,
with like effect as if originally named as Trustee in this Indenture; but,
nevertheless, on the written request of the Company or of the successor Trustee,
the Trustee ceasing to act, upon payment of any amounts then due it pursuant to
the provisions of Section 5.06, shall execute and deliver an instrument
transferring to such successor Trustee all the rights and powers of the Trustee
so ceasing to act and shall transfer, assign and deliver to such successor all
property and money held by such predecessor Trustee under this Indenture. 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,
nevertheless shall 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 5.06.
No successor Trustee shall accept appointment as provided in
this Section 5.10 unless at the time of such acceptance such successor Trustee
shall be qualified under the provisions of Section 310(b) of the Trust Indenture
Act and eligible under the provisions of Section 5.08.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 5.10, the Company shall mail notice of the succession
of such Trustee under this Indenture to the holders of Registered Securities at
their addresses as they shall appear on the Security Register, and, if any
Bearer Securities are Outstanding, by publishing notice of such resignation in a
newspaper of general circulation, in each place of payment for such Bearer
Securities, customarily published at least once a day for at least five days in
each calendar week. If the Company fails to mail such notice within ten days
after acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed and, if necessary, published at the expense
of the Company.
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SECTION 5.11. 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 the corporate trust business of the
Trustee, shall be the successor Trustee under this Indenture without the
execution or filing of any paper or any further act on the part of any of the
parties to this Indenture provided such corporation shall be qualified under the
provisions of Section 310(b) of the Trust Indenture Act and eligible under the
provisions of Section 5.08.
In case at the time such successor Trustee shall succeed to
the trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor Trustee may authenticate such
Securities either in the name of any predecessor Trustee under this Indenture 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 Securities 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 Securities in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
SECTION 6.01. Action by Securityholders. Whenever in this
Indenture it is provided that the holders of a specified percentage in aggregate
principal amount of the 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
in such action may be evidenced (i) by any instrument or any number of
instruments of similar tenor executed by Securityholders in person or by agent
or proxy appointed in writing, (ii) by the record of the holders of Securities
voting in favor of such action at any meeting of Securityholders duly called and
held in accordance with the provisions of this Article
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Six or (iii) by a combination of such instrument or instruments and any such
record of such a meeting of Securityholders. The Company may set a record date
for purposes of determining the identity of holders entitled to vote or consent
to any action by vote or consent authorized or permitted under this Indenture,
which record date shall be the later of ten days prior to the first solicitation
of such consent or the date of the most recent list of holders furnished to the
Trustee pursuant to the provisions of Section 312(a) of the Trust Indenture Act
prior to such solicitation. If a record date is fixed, those persons who were
holders of Securities at such record date (or their duly designated proxies),
and only those persons, shall be entitled to take such action by vote or
consents or to revoke any vote or consent previously given, whether or not such
persons continue to be holders after such record date. No such vote or consent
shall be valid or effective if such vote occurs or such consent is obtained more
than 120 days after such record date.
SECTION 6.02. Proof of Execution by Securityholders. (a)
Subject to the provisions of Sections 5.01, 5.02 and 7.05, 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.
(b) The ownership of Registered Securities of any series shall
be proved by the Security Register or by a certificate of the Security registrar
of such series.
(c) The principal amount and serial numbers of Bearer
Securities held by any Person, and the date of holding the same, may be proved
by the production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Securities in the amount and with the
serial numbers therein described; or such facts may be proved by the certificate
or affidavit of the Person holding such Bearer Securities, if such certificate
or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the
Company may assume that such ownership of any Bearer Security continues until
(i) another certificate or affidavit bearing a later date issued in respect of
the same Bearer Security is produced, (ii) such Bearer Security is produced to
the Trustee by some other Person, (iii) such Bearer Security is surrendered in
exchange for a Registered Security or (iv) such Bearer
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Security is no longer Outstanding. The fact and date of execution of any such
instrument or writing, the authority of the Person executing the same and the
principal amount and serial numbers of Bearer Securities held by the Person so
executing such instrument or writing and the date of holding the same may also
be proved in any other manner which the Trustee deems sufficient; and the
Trustee may in any instance require further proof with respect to any of the
matters referred to in this Section 6.02(c).
(d) The record of any Securityholders' meeting shall be proved
in the manner provided in Section 7.07.
SECTION 6.03. Who Are Deemed Absolute Owners. Prior to due
presentation of a Registered Security for registration of transfer, the Company,
the Trustee, any Paying Agent and any Security registrar may treat the Person in
whose name such Registered Security is registered as owner of such Registered
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 2.09) interest on such Registered Security and for all
other purposes whatsoever, whether or not such Registered Security is overdue
and notwithstanding any notation of ownership or other writing on such
Registered Security made by anyone other than the Company or any Security
registrar, and neither the Company, the Trustee, any Paying Agent nor any
Security registrar shall be affected by any notice to the contrary. All such
payments so made to any such holder as shown in the Security Register, 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 money payable upon any such
Registered Security.
The Company, the Trustee, any Paying Agent and any Security
registrar may treat the bearer of any Bearer Security and the bearer of any
coupon as the absolute owner of such Bearer Security or coupon for the purpose
of receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupon is overdue, and
neither the Company, the Trustee, any Paying Agent nor any Security registrar
shall be affected by any notice to the contrary. All such payments so made to
any such bearer shall be valid and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for money payable upon any such
Bearer Security.
None of the Company, the Trustee, any Paying Agent or the
Security registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests
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of a Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
SECTION 6.04. Company-Owned Securities Disregarded. In
determining whether the holders of the requisite aggregate principal amount of
Securities have concurred in any direction, consent, waiver or other action
under this Indenture, Securities that are owned by the Company or any other
obligor on the 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 Securities shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination; provided, however, that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent, waiver or other action, only Securities
that the Trustee knows are so owned shall be so disregarded.
SECTION 6.05. Revocation of Consents; Future Holders Bound. At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 6.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Securities of any or all series specified in
this Indenture in connection with such action, any holder of a Security the
serial number of which is shown by the evidence to be included in the Securities
the holders of which have consented to such action, by filing written notice
with the Trustee at the principal office of the Trustee and upon proof of
holding as provided in Section 6.02, may revoke such action so far as concerns
such Security. Except as provided in this Section 6.05 any such action taken by
the holder of any Security shall be conclusive and binding upon such holder and
upon all future holders and owners of such Security, irrespective of whether or
not any notation in regard thereto is made upon such Security or any Security
issued in exchange or substitution for such Security.
ARTICLE SEVEN
SECURITYHOLDERS' MEETINGS
SECTION 7.01. 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 Seven for any of the following
purposes:
(1) to give any notice to the Company or to the
Trustee, or to give any directions to the Trustee,
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or to consent to the waiving of any default under this Indenture and
its consequences, or to take any other action authorized to be taken by
Securityholders pursuant to any of the provisions of Article Four;
(2) to remove the Trustee and nominate a successor
Trustee pursuant to the provisions of Article Five;
(3) to consent to the execution of an indenture or
indentures supplemental to this Indenture pursuant to the provisions of
Section 8.02; or
(4) to take any other action authorized to be taken
by or on behalf of the holders of any specified aggregate principal
amount of the Securities under any other provision of this Indenture or
under applicable law.
SECTION 7.02. Call of Meetings by Trustee. The Trustee at any
time may call a meeting of Securityholders of any or all series to take any
action specified in Section 7.01, to be held at such time and at such place in
The City of New York for Registered Securities and the City of London, England
for Bearer Securities, as the Trustee shall determine. Notice of every meeting
of the Securityholders, 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, if any, of Registered Securities of each series affected at
their addresses as they shall appear on the Security Register, and shall be
provided to holders, if any, of Bearer Securities of each series affected by
publication thereof in a newspaper of general circulation, in each Place of
Payment for each such series, customarily published at least once a day for at
least five days in each calendar week. Such notice to holders of Registered
Securities shall be mailed not fewer than 20 nor more than 90 days prior to the
date fixed for the meeting. Such notice to holders of Bearer Securities shall be
made by the required publication on at least two dates, the first such
publication to be not more than 90 days and the second such publication to be
not fewer than 20 days prior to the date fixed for the meeting.
Any meeting of Securityholders shall be valid without notice
if the holders of all Securities then Outstanding of each series affected are
present in person or by proxy or if notice is waived before or after the meeting
by the holders of all Outstanding Securities of each series affected, and if the
Company and the Trustee are either present by duly authorized representatives
or, before or after the meeting, have waived notice.
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SECTION 7.03. Call of Meetings by Company or Securityholders.
In case at any time the Company, pursuant to a resolution of its Board of
Directors, or the holders of at least 10% in aggregate principal amount of the
Securities then Outstanding of any or all series, as the case may be, that may
be affected by the action proposed to be taken, shall have requested the Trustee
to call a meeting of Securityholders of any or all series, as the case may be,
that may be so affected, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
mailed or published (as appropriate under Section 7.02) 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 the city designated in
Section 7.02, as the case may be, for such meeting and may call such meeting to
take any action authorized in Section 7.01, by mailing or publishing notice of
such meeting as provided in Section 7.02.
SECTION 7.04. Qualifications for Voting. To be entitled to
vote at any meeting of Securityholders of any series a person shall (i) be a
holder of one or more Securities of such series as set forth in the Security
Register for such series or (ii) be a person appointed by an instrument in
writing as proxy by a holder of one or more Securities of such series, subject
to the provisions of Section 6.02. 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 7.05. Regulations. (a) 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 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.
(b) The Trustee, by an instrument in writing, shall appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 7.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, in like
manner shall appoint a temporary chairman. A permanent chairman and a permanent
secretary of
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the meeting shall be elected by vote of the holders of a majority in principal
amount of the Securities represented at the meeting and entitled to vote.
(c) Subject to the provisions of Section 6.04, at any meeting
each Securityholder or proxy shall be entitled to one vote for each $1,000
principal amount of Securities.
(d) No vote shall be cast or counted at any meeting in respect
of any Security challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding. The chairman of the meeting shall have no right
to vote other than by virtue of Securities held by him or instruments in writing
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
7.02 or Section 7.03 may be adjourned from time to time by a majority of those
present and the meeting may be held as so adjourned without further notice.
SECTION 7.06. Quorum. The Persons entitled to vote a majority
in principal amount of the Outstanding Securities affected by the action
proposed to be taken shall constitute a quorum for a meeting of such
Securityholders. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting, if convened at the request of
holders of Securities, shall be dissolved. In the absence of a quorum in any
other case the meeting may be adjourned for a period of not fewer than ten days
as determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not fewer than ten
days as determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned meeting shall
be given as provided in Section 7.02, except that such notice need be given only
once not fewer than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the principal amount
of the Outstanding Securities affected by the action proposed to be taken which
shall constitute a quorum.
SECTION 7.07. Voting. The vote upon any resolution submitted
to any meeting of Securityholders shall be by written ballots on which shall be
subscribed the signatures of the holders of Securities or of their
representatives by proxy and the principal amount of the Securities held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of
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votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record
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 such
record the original reports of the inspectors of votes on any vote by ballot
taken at such meeting 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
such notice was mailed or published as provided in Section 7.02 or Section 7.03.
The record shall show the principal amount of the 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.
Any record so signed and verified shall be conclusive evidence
of the matters stated in such record.
SECTION 7.08. No Delay of Rights by Meeting. Nothing in this
Article Seven shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Securityholders or any rights expressly or impliedly
conferred under this Article Seven to make such call, any hindrance or delay in
the exercise of any right or rights conferred upon or reserved to the Trustee or
to the Securityholders under any of the provisions of this Indenture or of the
Securities.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.01. Supplemental Indentures Without Consent of
Securityholders. The Company, when authorized by the resolutions of the Board of
Directors, and the Trustee from time to time and at any time may enter into an
indenture or indentures supplemental to this Indenture for one or more of the
following purposes:
(a) to evidence the succession of another corporation to the
Company, or successive successions, and the assumptions by the
successor corporation of the covenants, agreements and obligations of
the Company pursuant to Article Nine;
(b) to add to the covenants of the Company such further
covenants, restrictions or conditions for the
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protection of the holders of any series of the Securities or coupons as
the Board of Directors and the Trustee shall consider to be for the
protection of the holders of such Securities or coupons, and to make
the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions or conditions a default or an
Event of Default permitting the enforcement of all or any of the
several remedies set forth in this Indenture; provided, however, that
in respect of any such additional covenant, restriction or condition
such supplemental indenture may provide for notice or 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 in this Indenture or in any supplemental indenture
that may be defective or inconsistent with any other provision
contained in this Indenture or in any supplemental indenture, or to
make such other provisions in regard to matters or questions arising
under this Indenture that shall not adversely affect the interests of
the holders of Outstanding Securities of any series or any related
coupons;
(d) to establish the form or terms of Securities of any series
as permitted by Section 2.01;
(e) to add to, change or eliminate any of the provisions of
this Indenture to provide that Bearer Securities may be registrable as
to principal, to change or eliminate any restrictions on the payment of
principal or any premium on Registered Securities or of principal or
any premium or interest on Bearer Securities, to permit Bearer
Securities to be issued in exchange for Registered Securities or to
permit or facilitate the issuance of Securities in uncertificated form,
provided any such action shall not adversely affect the interests of
the holders of Outstanding Securities of any series or any related
coupons;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture; provided, however, that such action shall not adversely
affect the interests of the holders of Outstanding Securities of any
series;
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(g) to provide for the documentation necessary for the
issuance of Securities outside the United States of America;
(h) to provide for the documentation necessary for the
issuance of Securities at an issue price lower than the principal
amount thereof, including to provide that upon the redemption or
acceleration of the Maturity thereof an amount less than the principal
amount thereof shall become due and payable and that such amount shall
be used to determine the relative voting rights of the holders thereof;
or
(i) to conform the Indenture to the provisions of the Trust
Indenture Act as then in effect.
The Trustee hereby is authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations that may be contained in such
supplemental indenture and to accept the conveyance, transfer and assignment of
any property under such supplemental indenture, but the Trustee shall not be
obligated to, but in its discretion may, enter into any such supplemental
indenture that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 8.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securities at the time Outstanding,
notwithstanding any provisions of Section 8.02.
SECTION 8.02. Supplemental Indentures with Consent of
Securityholders of a Series. With the consent (evidenced as provided in Section
6.01) of the holders of not less than a majority in aggregate principal amount
of the Securities at the time Outstanding of each series affected by such
supplemental indenture or indentures, the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee from time to time and at
any time may enter into an indenture or indentures supplemental to this
Indenture for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the holders of the Securities of each such series;
provided, however, that without the consent of the holder of each Outstanding
Security affected thereby no such supplemental indenture shall: (a) change the
Stated Maturity of the principal of or any premium or any installment of
interest on, any Security, or reduce the principal amount of any Security or any
premium or interest
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on any Security, or reduce the amount of principal payable upon acceleration of
the Maturity of any Original Issue Discount Security, or change any Place of
Payment where, or the coin or currency in which, any Security or any premium or
interest on any Security is payable, or impair the right to institute suit for
the enforcement of any such payment on or after its Stated Maturity; (b) reduce
the percentage in principal amount of Securities of any Series the consent of
whose holders is required for any such supplemental indenture or the consent of
whose holders is required for any waiver of compliance with certain provisions
of this Indenture or certain defaults under this Indenture and their
consequences provided for in this Indenture; or (c) modify the provisions of
Section 4.01 providing for the rescinding and annulment of a declaration
accelerating the Maturity of the Securities of any series, or any of the
provisions of this Section 8.02 or Section 4.07(b), except to increase any such
percentage or to provide that certain other provisions of this Indenture cannot
be modified or waived.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Securityholders of
such series 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 in its discretion may, but shall not be
obliged to, enter into such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 8.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 8.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures. Any supplemental indenture executed pursuant to the
provisions of this Article Eight shall comply with the Trust Indenture Act as
then in effect. Upon the execution of any supplemental indenture pursuant to the
provisions of this Article Eight, this Indenture shall be and be deemed to be
modified and amended in accordance with such supplemental indenture and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of the series
of Securities affected thereafter shall be determined, exercised and enforced
under this Indenture subject in all respects to
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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 8.04. Notation on Securities. Securities authenticated
and delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Eight may bear a notation in form acceptable to the
Trustee as to any matter provided for in such supplemental indenture. If the
Company so shall determine, new Securities of any series and any related coupons
so modified as to conform, in the opinion of the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange, as provided in Section 2.06, for the Outstanding
Securities of such series and any related coupons, upon surrender of such
Outstanding Securities of such series and any related coupons.
SECTION 8.05. Evidence of Compliance of Supplemental Indenture
to Be Furnished Trustee. The Trustee, subject to the provisions of Section 5.01
and Section 5.02, may receive an Officers' Certificate and an Opinion of Counsel
as conclusive evidence that any supplemental indenture executed pursuant to this
Article Eight complies with the requirements of this Article Eight.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 9.01. Company May Consolidate, etc., on Certain Terms.
The Company shall not consolidate with or merge into another corporation or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:
(1) the corporation formed by such consolidation or
into which the Company is merged or the Person which acquires by
conveyance or transfer or which leases the properties and assets of the
Company substantially as an entirety shall be a corporation organized
and existing under the laws of the United States of America, any State
thereof or the District of Columbia and expressly shall assume, by a
supplemental indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest on the Securities, according
to their terms,
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and the performance of every covenant of this Indenture and in such
series on the part of the Company to be performed or observed;
(2) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing; and
(3) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and
supplemental indenture comply with this Article Nine and that all
conditions precedent provided for in this Indenture relating to such
transaction have been complied with.
SECTION 9.02. Successor Corporation Substituted. Upon any
consolidation by the Company with or merger by the Company into any other
corporation or any conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety in accordance with Section 9.01, the
successor corporation formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor corporation had
been named as the Company in this Indenture, and thereafter, except in the case
of a lease, the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities of each series and any related
coupons.
Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Company prior to such
succession, any of or all the Securities of each series issuable under this
Indenture which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation
instead of upon the Company Order, and subject to all the terms, conditions and
limitations in this Indenture, the Trustee shall authenticate and shall deliver
any Securities that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee on its behalf for that purpose. All the Securities so
issued shall have in all respects the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance
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with the terms of this Indenture as though all such Securities had been issued
at the date of the execution of this Indenture.
ARTICLE TEN
REDEMPTION OF SECURITIES
SECTION 10.01. Applicability of Article. Securities of any
series that are redeemable before their Stated Maturity shall be redeemable only
in accordance with their terms and (except as otherwise specified as
contemplated by Section 2.01 for Securities of any series) in accordance with
this Article Ten.
SECTION 10.02. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities shall be evidenced by a Company
Order. In case of any redemption at the election of the Company of less than all
the Securities of any series, the Company, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), shall notify the Trustee of such Redemption Date,
of the tenor and terms of the Securities of such series to be redeemed and of
the principal amount of such Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
SECTION 10.03. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of any series of like tenor and terms
specified by the Company are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series and of such tenor
and terms not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denominations for such
Securities or any integral multiple thereof) of the principal amount of such
Registered Securities or such Bearer Securities or a denomination larger than
the minimum authorized denomination for such Registered Securities or such
Bearer Securities.
The Trustee promptly shall notify the Company in writing of
the Securities selected for redemption and, in
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the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 10.04. Notice of Redemption. Notice of redemption
shall be given in the manner provided in Section 7.02 not fewer than 30 or more
than 60 days prior to the Redemption Date. All notices of redemption shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of
any series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular Securities
to be redeemed;
(4) that on the Redemption Date, the Redemption Price
will become due and payable upon each such Security to be redeemed and,
if applicable, that interest thereon will cease to accrue on and after
such date;
(5) the Place or Places of Payment where such
Securities, together in the case of Bearer Securities with all coupons,
if any, appertaining thereto maturing after the Redemption Date, are to
be surrendered for payment of the Redemption Price;
(6) that Bearer Securities may be surrendered for
payment only at such place or places that are outside the United
States, except as provided in Section 3.02; and
(7) that the redemption is for a sinking fund, if
such is the case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 10.05. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit
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with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 3.04(b)) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be the same date as the Stated Maturity of an installment
of interest thereon) accrued interest on, all the Securities that are to be
redeemed on that date; provided, however, that deposits with respect to Bearer
Securities shall be made with a Paying Agent or Paying Agents located outside
the United States except as otherwise provided in Section 3.02, unless otherwise
specified as contemplated by Section 2.01.
SECTION 10.06. Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Securities so to be redeemed
shall become due and payable, on the Redemption Date, at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that: (i) installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only upon presentation and surrender of coupons for such interest (at an
office or agency located outside the United States except as otherwise provided
in Section 3.02); and (ii) installments of interest whose Stated Maturity is on
or prior to the Redemption Date shall be payable to the holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant record date for the payment of such interest
according to the terms of such Securities.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Bearer Security may be paid after deducting from the Redemption Price an amount
equal to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to hold each
of them and any Paying Agent harmless. If thereafter the holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such holder shall be entitled to receive
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the amount so deducted on account of such coupon without interest thereon;
provided, however, that interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside of the United States except as otherwise provided in Section 3.02.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium, until
paid, shall bear interest from the Redemption Date at the rate prescribed
therefor in the Security or related coupon.
SECTION 10.07. Registered Securities Redeemed in Part. Any
Registered Security that is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the holder of such Security without service
charge, a new Registered Security or new Registered Securities of the same
series and of like tenor and terms, of any authorized denomination as requested
by such holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE ELEVEN
SINKING FUNDS
SECTION 11.01. Applicability of Article. The provisions of
this Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section
2.01 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 11.02. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of the Securities of such series.
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SECTION 11.02. Satisfaction of Sinking Fund Payments with
Securities. The Company
(1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and
(2) may apply as a credit Securities of a series that
have been repurchased at the option of a holder or redeemed either at
the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments
pursuant to the terms of such Securities,
in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the
terms of such Securities as provided for by the terms of such series, provided
that such Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund, and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 11.03. Redemption of Securities for Sinking Fund. Not
fewer than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment of that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 11.02 and also will deliver to the Trustee any Securities to be so
delivered. Not fewer than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 10.03 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 10.04. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 10.06 and Section 10.07.
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ARTICLE TWELVE
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 12.01. Terms Set Forth in the Securities. Securities
of any series which in accordance with their terms are repayable at the option
of the holders thereof before their Stated Maturity shall be repaid in
accordance with the terms set forth in such Securities.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. Discharge of Indenture. When (a) the Company
shall deliver to the Trustee for cancellation all Securities of any series and
any related coupons theretofore authenticated (other than any Securities of such
series and any related coupons that shall have been mutilated, destroyed, lost
or stolen and in lieu of or in substitution for which other Securities or
coupons shall have been authenticated and delivered) and not theretofore
cancelled, or (b) all the Securities of any series and any related coupons not
theretofore cancelled 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 with the Trustee, in trust, funds sufficient to pay upon
Stated Maturity, redemption or repayment at the option of a holder all the
Securities of such series and related coupons (other than any Securities of such
series and related coupons that shall have been mutilated, destroyed, lost or
stolen and that have been replaced or paid as provided in Section 2.06) not
theretofore cancelled or delivered to the Trustee for cancellation, including
principal and any premium and interest due or to become due prior to such Stated
Maturity, Redemption Date or date of repayment, as the case may be, but
excluding, however, the amount of any money for the payment of principal of or
any premium or interest on the Securities
(1) theretofore deposited with the Trustee and repaid
by the Trustee to the Company in accordance with the provisions of
Section 13.04, or
(2) paid to any State or the District of Columbia
pursuant to its unclaimed property or similar laws, and if in either
case the Company also shall pay
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or cause to be paid all other sums payable under this Indenture by the
Company
then this Indenture shall cease to be of further effect with respect to
Securities of such series and any related coupons, and the Trustee, on demand of
the Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 15.05 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture with respect to Securities of such series and any related coupons. The
obligations of the Company to the Trustee under Section 5.06 shall survive the
termination of this Indenture.
The Trustee shall notify the Securityholders of such series,
at the expense of the Company, of the immediate availability of the amount
referred to in clause (b) of this Section 13.01 by mailing a notice, first class
postage prepaid, to the holders of Registered Securities of such series at their
addresses as they shall appear on the Security Register, and, if any Bearer
Securities are Outstanding, by publishing notice of such resignation in a
newspaper of general circulation, in each place of payment for such Bearer
Securities, customarily published at least once a day for at least five days in
each calendar week.
SECTION 13.02. Deposited Money to Be Held in Trust by Trustee.
Subject to Section 13.04, all money deposited with the Trustee pursuant to
Section 13.01 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, other than as to Bearer Securities, except as provided in Section
3.02), to the holders of the particular Securities and related coupons for the
payment of which such money has been deposited with the Trustee, of all sums due
and to become due thereon for principal and any premium and interest.
SECTION 13.03. Paying Agent to Repay Money Held. Upon the
satisfaction and discharge of this Indenture all money then held by any Paying
Agent of the Securities (other than the Trustee), upon demand of the Company,
shall 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 money.
SECTION 13.04. Return of Unclaimed Money. Any money deposited
with or paid to the Trustee or any Paying Agent for payment of the principal of
or any premium or interest on Securities of any series, or then held by the
Company in trust for the payment of the principal of or any
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premium or interest on Securities of any series, and not applied but remaining
unclaimed by the holders of Securities of that series for two years after the
date upon which the principal or any premium or interest on such Securities, as
the case may be, shall have become due and payable, shall be repaid to the
Company by the Trustee on demand or, if then held by the Company, shall be
discharged from such trust, and all liability of the Trustee thereupon shall
cease; and the holder of any of such Securities thereafter, as an unsecured
general creditor, shall look only to the Company for payment of such Securities,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, thereupon shall
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, at the expense of the Company, in the case
of Registered Securities or Bearer Securities, may cause to be published once,
in a newspaper of general circulation in each Place of Payment for such series
customarily published on each Business Day (whether or not published on
Saturdays, Sundays or holidays) or, in the case of Registered Securities, to be
mailed to each such holder, or in the case of Registered Securities to be mailed
and published, notice that such money remains unclaimed and that, after a date
specified in such notice, which shall not be fewer than 30 days from the date of
such publication or mailing, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 13.05. Discharge of Indenture as to Certain Series of
Securities. (a) If this Section 13.05 is specified in the manner contemplated by
Section 2.01 to be applicable to the Securities of any series, the Company shall
be deemed to have paid and discharged the entire indebtedness on all the
Securities of any such series at the time Outstanding and, upon Company Order,
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction, discharge and defeasance of such indebtedness, when:
(1) either:
(A) with respect to all Securities of such
series at the time Outstanding, the Company shall have
deposited or caused to be deposited irrevocably with the
Trustee for such series as trust funds in trust, U.S. dollars,
U.S. Government Obligations or a combination thereof, in an
amount that through the payment of interest and principal and
premium in respect thereof in accordance with their terms will
provide (without any reinvestment of such interest or
principal),
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not later than one Business Day before the due date of any
payment in respect of the Securities for such series, money in
an amount sufficient (in the case of a deposit including any
U.S. Government Obligations, in the opinion of a nationally
recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee at or
prior to the time of such deposit) to pay and discharge each
installment of principal of (including any mandatory sinking
fund payments), and any premium and interest on, the
Outstanding Securities of such series on the dates such
installments of principal and any premium and interest are due
or upon the Stated Maturity, Redemption Date or repayment at
the option of a holder of such series, as applicable; or
(B) the Company properly has fulfilled such
other means of satisfaction and discharge as is specified, in
the manner contemplated by Section 2.01, to be applicable to
the Securities of such series;
(2) no Event of Default or event (including such
deposit) which, with notice or lapse of time, or both, would become an
Event of Default with respect to the Securities of such series shall
have occurred and be continuing on the date of such deposit as
evidenced to the Trustee in an Officers' Certificate delivered
concurrently with such deposit to the Trustee;
(3) the Company shall have paid or caused to be paid
all other sums payable with respect to the Securities of such series at
the time Outstanding;
(4) such deposit will not result in a breach or
violation of, or constitute a default under, this Indenture or any
other agreement or instrument to which the Company is a party or by
which it is bound, or the Company has obtained a waiver of any such
breach, violation or default;
(5) unless otherwise specified in the manner
contemplated by Section 2.01, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that holders of the
Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of the Company's exercise of
its option under this Section 13.05 and will be subject to Federal
income tax on the same amount and in the manner and at the same times
as would
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have been the case if such option had not been exercised and, in the
case of the Securities of such series being discharged, accompanied by
a ruling to that effect received from or published by the Internal
Revenue Service; and
(6) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to the
satisfaction, discharge and defeasance of the entire indebtedness on
all Securities of any such series at the time Outstanding have been
complied with.
(b) "U.S. Government Obligations" means securities that are
(i) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America which in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof.
(c) Upon the satisfaction of the conditions set forth in this
Section 13.05 with respect to all the Securities of any series at the time
Outstanding, the terms and conditions of such series, including the terms and
conditions with respect thereto set forth in this Indenture, shall no longer be
binding upon, or applicable to, the Company (except as to any surviving rights
of conversion or registration of transfer or exchange and rights relating to
mutilated, destroyed, lost and stolen Securities pursuant to Section 2.07 of
Securities of such series expressly provided for herein or in the form of
Security of such series); provided, however, that the Company shall not be
discharged from any payment obligations in respect of Securities of such series
which are deemed not to be Outstanding under clause (c) of the definition
thereof if such obligations continue to be valid obligations of the Company
under applicable law.
SECTION 13.06. Repayment to Company of Deposits Made Pursuant
to Section 13.05. After the payment in full of the entire indebtedness of a
series of Securities with respect to which a deposit has been made with the
Trustee pursuant to Section 13.05, the Trustee and any Paying Agent for such
series upon Company Order promptly shall return to the Company any money or U.S.
Government Obligations held by them that are not required for the payment of the
principal
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of and any premium and interest on the Securities of such series.
SECTION 13.07. Deposits Irrevocable. Any deposit referred to
in Section 13.01 and Section 13.05(a)(1)(A) shall be irrevocable. If any
Securities of a series with respect to which a deposit has been made pursuant to
Section 13.01 and Section 13.05(a)(1)(A) at the time Outstanding are to be
redeemed prior to their Stated Maturity, whether pursuant to any optional
redemption provisions or in accordance with any mandatory sinking fund
requirement, the Company shall make such arrangements as are satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
SECTION 13.08. Reinstatement. If the Trustee is unable to
apply any money or U.S. Government Obligations in accordance with Section 13.01
or Section 13.05 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 13.01 or Section 13.05 until such time
as the Trustee is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 13.01 or Section 13.05.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.01. Indenture and Securities Solely Corporate
Obligations. No recourse for the payment of the principal of or any premium or
interest on any Security, or for any claim based on any Security or coupon or
otherwise in respect of any Security or coupon, and no recourse under or upon
any obligation, covenant or agreement of the Company in this Indenture or in any
Security, or because of the creation of any indebtedness represented by any
Security or coupon, shall be had against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, 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
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as a consideration for, the execution of this Indenture and the issue of the
Securities and coupons.
ARTICLE FIFTEEN
MISCELLANEOUS PROVISIONS
SECTION 15.01. Provisions Binding on Company's Successors. All
the covenants, stipulations, promises and agreements contained in this Indenture
by the Company shall bind its successors and assigns whether so expressed or
not.
SECTION 15.02. Official Acts by Successor Corporation. Any act
or proceeding by any provisions 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 or officer of any corporation that shall at the time be the lawful
sole successor of the Company.
SECTION 15.03. Addresses for Notices, etc. Any notice or
demand that by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the holders of 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) to Texas Industries, Inc., 1341 West
Mockingbird Lane, Dallas, Texas 75247-6913 Attention: General Counsel. Any
notice, direction, request or demand by any Securityholder 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 principal office of the Trustee,
Attention: Corporate Trust Administration.
SECTION 15.04. Governing Law. THIS INDENTURE AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK,
AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
SECTION 15.05. Evidence of Compliance with Conditions
Precedent. Upon any application or request 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 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
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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 (other than certificates provided pursuant to
Section 4.04, which certificates shall comply with the requirements of Section
4.04) shall include: (i) a statement that the person making such certificate or
opinion has read such covenant or condition; (ii) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinion contained in such certificate or opinion are based; (iii) 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 (iv) a
statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
The provisions of this Section 15.05 are in furtherance of and
subject to Sections 314(c)(1), 314(c)(2) and 314(e) of the Trust Indenture Act.
SECTION 15.06. Legal Holidays. Unless otherwise specified in
the manner contemplated by Section 2.01, in any case where the Stated Maturity
of principal of or any premium or interest on the Securities will not be a
Business Day, payment of such principal, premium or interest need not be made on
such date but may be made on the next following Business Day with the same force
and effect as if made on the Stated Maturity and, if such principal, premium or
interest is duly paid on such next following Business Day, no interest shall
accrue for the period from and after such Stated Maturity to such next following
Business Day.
SECTION 15.07. Trust Indenture Act to Control. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
another provision hereof which is required to be included in this Indenture by
any provision of the Trust Indenture Act, such required provision shall control.
SECTION 15.08. No Security Interest Created. Nothing in this
Indenture or in the Securities or coupons, expressed or implied, shall be
construed to constitute a security interest under the Uniform Commercial Code or
similar legislation, as now or hereafter enacted and in effect, in any
jurisdiction where property of the Company or its Subsidiaries is located.
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SECTION 15.09. Benefits of Indenture. Nothing in this
Indenture or in the Securities or coupons, express or implied, shall give to any
Person, other than the parties to this Indenture, any Paying Agent, any Security
registrar and their successors under this Indenture and the holders of
Securities or coupons any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 15.10. Payments to Be Made in U.S. Dollars.
Notwithstanding anything in this Indenture to the contrary, any payments on or
relating to any Security or related coupon shall be made only in U.S. dollars.
SECTION 15.11. 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 of this Indenture.
SECTION 15.12. 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.
------------------------------------------------
[NAME OF TRUSTEE] hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions set forth above in this
Indenture.
78
<PAGE> 81
IN WITNESS WHEREOF, TEXAS INDUSTRIES, INC. has caused this
Indenture to be signed and acknowledged by its President, and its corporate seal
to be affixed hereunto, and the same to be attested by its Secretary, and [NAME
OF TRUSTEE] has caused this Indenture to be signed and acknowledged by
____________, and has caused its corporate seal to be affixed hereunto and the
same to be attested by ____________, as of the day and year first written above.
TEXAS INDUSTRIES, INC.
By:
----------------------------------
[Name]
[Title]
[SEAL]
Attest:
- -----------------------------------
Secretary
[NAME OF TRUSTEE]
By:
----------------------------------
[Name]
[Title]
[SEAL]
Attest:
- -----------------------------------
Title:
79
<PAGE> 1
EXHIBIT 4.9
TEXAS INDUSTRIES, INC.
TO
[NAME OF TRUSTEE],
TRUSTEE
INDENTURE
REGARDING SUBORDINATED SECURITIES
DATED AS OF ____________, 199__
<PAGE> 2
Reconciliation and Tie Sheet*
between
Provisions of the Trust Indenture Act of 1939
and
Indenture, dated as of ____________, 199__
between
TEXAS INDUSTRIES, INC.
and
[NAME OF TRUSTEE], Trustee
<TABLE>
<CAPTION>
Section of Act Section of Indenture
- -------------- --------------------
<S> <C>
310(a)(1), (2).......................................................6.08
310(a)(3), (4).......................................................Not applicable
310(a)(5)............................................................6.08
310(b)...............................................................**
310(c)...............................................................Not applicable
311(c)...............................................................Not applicable
312..................................................................**
313(a)...............................................................**
313(b)(1)............................................................Not applicable
313(b)(2)............................................................**
313(c), (d)..........................................................**
314(a)...............................................................**
314(b)...............................................................Not applicable
314(c)(1) and (2)....................................................16.05
314(c)(3)............................................................Not applicable
314(d)...............................................................Not applicable
314(e)...............................................................16.05
314(f)...............................................................Not applicable
315(a)(c) and (d)....................................................6.01
315(b)...............................................................5.08
315(e)...............................................................5.09
316(a)(1)............................................................5.01 and 5.07
316(a)(2)............................................................Omitted
316(a) last sentence.................................................7.04
316(b)...............................................................5.04
316(c)...............................................................7.05
317(a)...............................................................5.02
317(b)...............................................................4.04(a)
318(a)...............................................................16.07
</TABLE>
- --------------------
* This Reconciliation and Tie Sheet is not a part of the Indenture.
** Included pursuant to Section 318(c) of the Trust Indenture Act of 1939.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties ........................................................................................ 1
Recitals ........................................................................................ 1
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions ......................................................................... 1
ARTICLE TWO
THE SECURITIES AND SECURITY FORMS
SECTION 2.01. Amount Unlimited; Issuable in Series.................................................... 8
SECTION 2.02. Form of Securities and of Trustee's Certificate of Authentication....................... 11
SECTION 2.03. Securities in Global Form............................................................... 12
SECTION 2.04. Denomination, Authentication and Dating of Securities................................... 13
SECTION 2.05. Execution of Securities................................................................. 16
SECTION 2.06. Exchange and Registration of Transfer of Securities..................................... 17
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Securities......................................... 21
SECTION 2.08. Temporary Securities.................................................................... 23
SECTION 2.09. Payment of Interest; Interest Rights.................................................... 24
SECTION 2.10. Cancellation of Securities Paid, etc.................................................... 26
ARTICLE THREE
SUBORDINATION OF SECURITIES
SECTION 3.01. Agreement of Securityholders That Securities Subordinated to Extent Provided............ 26
SECTION 3.02. Company Not to Make Payments with Respect to Securities in Certain Circumstances........ 27
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
SECTION 3.03. Securities Subordinated to Prior Payment of All Senior Indebtedness on Insolvency,
Dissolution, Liquidation or Reorganization of Company................................... 28
SECTION 3.04. Prior Payment to Senior Indebtedness Upon Acceleration of .............................. 28
SECTION 3.05 Securityholders to Be Subrogated to Rights of Holders of Senior Indebtedness............ 30
SECTION 3.06. Obligation of the Company Unconditional, etc............................................ 30
SECTION 3.07. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice................. 31
SECTION 3.08. Application by Trustee of Money Deposited with It....................................... 31
SECTION 3.09. Article Applicable to Paying Agents..................................................... 32
SECTION 3.10. Subordination Rights Not Impaired by Acts or Omissions of Company or Holders of
Senior Indebtedness..................................................................... 32
SECTION 3.11. Securityholders Authorize Trustee to Effectuate Subordination of Securities............. 32
SECTION 3.12. Right of Trustee to Holder Senior Indebtedness.......................................... 32
SECTION 3.13. Article Three Not to Prevent Events of Default.......................................... 33
SECTION 3.14. Trustee Not Fiduciary for Holders of Senior Indebtedness................................ 33
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Principal and Interest....................................................... 33
SECTION 4.02. Offices for Notices and Payments, etc................................................... 33
SECTION 4.03. Provisions as to Paying Agent........................................................... 35
SECTION 4.04. Statement as to Compliance.............................................................. 36
SECTION 4.05. Notice of Defaults...................................................................... 36
SECTION 4.06. Corporate Existence..................................................................... 38
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON
EVENT OF DEFAULT OR ACCELERATION EVENT
SECTION 5.01. Events of Default....................................................................... 38
SECTION 5.02. Payment of Securities on Default; Suit Therefor......................................... 41
SECTION 5.03. Application of Money Collected by Trustee............................................... 43
SECTION 5.04. Proceedings by Securityholders.......................................................... 44
SECTION 5.05. Proceedings by Trustee.................................................................. 45
SECTION 5.06. Remedies Cumulative and Continuing; Delay or Omission Not Waiver........................ 45
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by Majority of Securityholders.......... 46
SECTION 5.08. Notices of Defaults..................................................................... 47
SECTION 5.09. Undertaking to Pay Costs................................................................ 47
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.................................................. 48
SECTION 6.02. Reliance on Documents, Opinions, etc.................................................... 49
SECTION 6.03. No Responsibility for Recitals, etc..................................................... 50
SECTION 6.04. Trustee, Paying Agents or Registrar May Own Securities.................................. 50
SECTION 6.05. Money to Be Held in Trust............................................................... 51
SECTION 6.06. Compensation and Expenses of Trustee.................................................... 51
SECTION 6.07. Officers' Certificate as Evidence....................................................... 51
SECTION 6.08. Eligibility of Trustee.................................................................. 52
SECTION 6.09. Resignation or Removal of Trustee....................................................... 52
SECTION 6.10. Acceptance by Successor Trustee......................................................... 54
SECTION 6.11. Succession by Merger.................................................................... 55
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders............................................................... 55
SECTION 7.02. Proof of Execution by Securityholders................................................... 56
SECTION 7.03. Who Are Deemed Absolute Owners.......................................................... 57
SECTION 7.04. Company-Owned Securities Disregarded.................................................... 58
SECTION 7.05. Revocation of Consents; Future Holders Bound............................................ 58
ARTICLE EIGHT
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.................................................................... 58
SECTION 8.02. Call of Meetings by Trustee............................................................. 59
SECTION 8.03. Call of Meetings by Company or Securityholders.......................................... 60
SECTION 8.04. Qualifications for Voting............................................................... 60
SECTION 8.05. Regulations ......................................................................... 60
SECTION 8.06. Quorum ................................................................................. 61
SECTION 8.07. Voting ................................................................................. 61
SECTION 8.08. No Delay of Rights by Meeting........................................................... 62
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Securityholders.............................. 62
SECTION 9.02. Supplemental Indentures of Securityholders of a Series.................................. 64
SECTION 9.03. Compliance with Trust Indenture Act; Effect of Supplemental Indentures.................. 65
SECTION 9.04. Notation on Securities.................................................................. 66
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee................ 66
</TABLE>
iv
<PAGE> 7
<TABLE>
<S> <C>
ARTICLE TEN
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms......................................... 66
SECTION 10.02. Successor Corporation Substituted....................................................... 67
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.01. Applicability of Article................................................................ 68
SECTION 11.02. Election to Redeem; Notice to Trustee................................................... 68
SECTION 11.03. Selection by Trustee of Securities to Be Redeemed....................................... 68
SECTION 11.04. Notice of Redemption.................................................................... 69
SECTION 11.05. Deposit of Redemption Price............................................................. 69
SECTION 11.06. Securities Payable on Redemption Date................................................... 70
SECTION 11.07. Registered Securities Redeemed in Part.................................................. 71
ARTICLE TWELVE
SINKING FUNDS
SECTION 12.01. Applicability of Article................................................................ 71
SECTION 12.02. Satisfaction of Sinking Fund Payments with Securities................................... 71
SECTION 12.03. Redemption of Securities for Sinking Fund............................................... 72
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.01. Terms Set Forth in the Securities....................................................... 72
</TABLE>
v
<PAGE> 8
<TABLE>
<S> <C>
ARTICLE FOURTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 14.01. Discharge of Indenture.................................................................. 73
SECTION 14.02. Deposited Money to Be Held in Trust by Trustee.......................................... 74
SECTION 14.03. Paying Agent to Repay Money Held........................................................ 74
SECTION 14.04. Return of Unclaimed Money............................................................... 74
SECTION 14.05. Deposits Irrevocable.................................................................... 75
SECTION 14.06. Reinstatement .......................................................................... 75
ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 15.01. Indenture and Securities Solely Corporate Obligations................................... 75
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 16.01. Provisions Binding on Company's Successors.............................................. 76
SECTION 16.02. Official Acts by Successor Corporation.................................................. 76
SECTION 16.03. Addresses for Notices, etc.............................................................. 76
SECTION 16.04. Governing Law ......................................................................... 76
SECTION 16.05. Evidence of Compliance with Conditions Precedent........................................ 76
SECTION 16.06. Legal Holidays ......................................................................... 77
SECTION 16.07. Trust Indenture Act to Control.......................................................... 77
SECTION 16.08. No Security Interest Created............................................................ 77
SECTION 16.09. Benefits of Indenture................................................................... 78
SECTION 16.10. Payments to Be Made in U.S. Dollars..................................................... 78
SECTION 16.11. Table of Contents, Headings, etc........................................................ 78
SECTION 16.12. Execution in Counterparts............................................................... 78
</TABLE>
vi
<PAGE> 9
THIS INDENTURE, dated as of ____________, 199 , is executed
and delivered from TEXAS INDUSTRIES, INC., a Delaware corporation (such
corporation or, subject to Article Ten, its successors and assigns, the
"Company"), and [NAME OF TRUSTEE], a ____________ banking corporation (such
corporation or, subject to Article Six, its successors and assigns as Trustee
under this Indenture, the "Trustee").
RECITAL OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness or warrants
therefor to be issued in one or more series (the "Securities"), as provided
herein.
For and in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions. The terms defined in this Section
1.01 (except to the extent the application of such definitions is expressly
limited to certain instances, and except as otherwise expressly provided in this
Indenture or unless the context otherwise requires) for all purposes of this
Indenture will have the respective meanings specified in this Section 1.01.
Except as otherwise expressly provided in this Indenture or unless the context
otherwise requires, all other terms used in this Indenture that are defined in
the Trust Indenture Act or that the Trust Indenture Act defines by reference to
the Securities Act of 1933 or by Commission rule under the Trust Indenture Act
will have the meanings assigned to such terms in the Trust Indenture Act, in
such rule thereunder or in such Securities Act as in force at the date of the
execution of this Indenture.
"Bearer Security" means any Security established pursuant to
Section 2.02 that is payable to bearer.
"Bearer Security Tax Certificate" or "Certificate of non-U.S.
Ownership", when used with respect to a Bearer Security, means a certificate
satisfying the requirements of Treasury Regulation Section
1.163-5(c)(2)(i)(D)(3), as that
<PAGE> 10
provision may be amended or redesignated from time to time, which certificate
shall be in a form approved by the Company.
"Board of Directors" means the Board of Directors of the
Company or, with respect to any matter, any committee of the Board of Directors
duly authorized to act for the Board of Directors with respect to such matter.
"Business Day", with respect to each series of Securities,
means any day other than a Saturday or Sunday that is neither a legal holiday
nor a day on which banking institutions are authorized or obligated by law or
regulation to close in either The City of New York or, with respect to
Registered Notes that will bear interest based on a specified percentage of
London interbank offered quotations ("LIBOR"), in London, England, or, in the
case of Bearer Securities, in any Place of Payment.
"CEDEL, S.A." means Centrale de Livraison de Valeurs
Mobilieres S.A.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this Indenture the Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Company" means the corporation identified as the Company in
the first paragraph of this Indenture until a successor corporation shall
succeed to and be substituted for the Company pursuant to the provisions of
Article Ten, and thereafter shall mean such successor corporation.
"Company Order" means a written request or order signed in the
name of the Company by its Chairman of the Board, any Vice Chairman, its Chief
Executive Officer, its President, any Executive Vice President or any Senior
Vice President and its Treasurer, any Assistant Treasurer, its Secretary or any
Assistant Secretary, and delivered to the Trustee.
"coupon" means any interest coupon appertaining to a Bearer
Security.
"Defaulted Interest" has the meaning specified in Section
2.09.
"Depositary", with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, means The
Depository Trust Company, New York, New
<PAGE> 11
York, or such other Person designated as Depositary by the Company in the manner
provided in Section 2.01, until a successor Depositary shall have been appointed
pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" means or includes each Person who is then a Depositary hereunder,
and if at any time there is more than one such Person, "Depositary" as used with
respect to the Global Securities of any such series means the Depositary with
respect to the Securities of that series.
"Euro-clear" means Morgan Guaranty Trust Company of New York,
Brussels Office, as operator of the Euro-clear System.
"Event of Default" means any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, designated in Section 5.01.
"Global Security" means a Security issued to evidence all or
part of a series of Securities in accordance with Section 2.03.
"Indenture" means this instrument as originally executed or,
if amended or supplemented as provided in this Indenture, as so amended or
supplemented.
"interest", when used with respect to an Original Issue
Discount Security that by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by the declaration of
acceleration, call for redemption, repayment at the option of the holder or
otherwise.
"Officers' Certificate", when used with respect to the
Company, means a certificate signed by the Chairman of the Board, any Vice
Chairman, the Chief Executive Officer, the President, any Executive Vice
President or any Senior Vice President and by the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company. Except as
otherwise provided in this Indenture, each such certificate shall include the
statements provided for in Section 16.05.
<PAGE> 12
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company, and who
shall be acceptable to the Trustee. Except as otherwise provided in this
Indenture, each such opinion shall include the statements provided for in
Section 16.05.
"Original Issue Discount Security" means any Security that
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 "principal amount" or "aggregate principal amount", when
used with respect to Original Issue Discount Securities, has the meaning (or
meanings) specified in the manner contemplated by Section 2.01 for purposes of:
determining the amount due and payable in the event of an acceleration of
Maturity as provided in Section 5.01; the redemption provisions in Article
Eleven; determining whether the holders of the requisite principal amount of
Outstanding Securities of any series have given any request, demand,
authorization, direction, notice, consent or waiver under this Indenture; and
determining whether a quorum is present at a meeting of Securityholders.
"Outstanding", when used with reference to Securities of any
series or the related coupons, subject to the provisions of Section 7.04, means,
as of any particular time, all Securities of such series or any related coupons
authenticated and delivered by the Trustee pursuant to this Indenture, except:
(a) such Securities and coupons theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(b) such Securities and coupons, or portions thereof, for the
payment or redemption of which money 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 Securities are to be redeemed prior to
the Maturity thereof, notice of such redemption shall have been
provided as specified in Article Eleven, or provision satisfactory to
the Trustee shall have been made for mailing such notice; and
(c) such Securities or coupons in lieu of or in substitution
for which other Securities or coupons shall have been authenticated and
delivered pursuant to the terms of Section 2.07, except to the extent
that a bona fide holder in due course of any such Securities shall
<PAGE> 13
have presented proof satisfactory to the Trustee that such holder is a
bona fide holder in due course of any such Securities or coupons.
"Paying Agent", when used with respect to Securities of any
series, means any Person authorized by the Company to pay the principal of and
any premium or interest on any Securities of that series on behalf of the
Company.
"Person" means a corporation, an association, a partnership,
an organization, a trust, an individual, a government or a political subdivision
thereof or a governmental agency.
"Place of Payment" has the meaning stated in Section 2.01(5).
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt that was
evidenced by such particular Security. For the purposes of this definition, any
Security authenticated and delivered under Section 2.07 in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.
"principal office of the Trustee" or any other similar term
means the principal office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office, at the date of
this Indenture, is located at ____________.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security in the form of
registered securities established pursuant to Section 2.02, that is registered
in the Security Register.
"Regular Record Date", with respect to the interest payable on
any Interest Payment Date on the Securities of any series, means the date
specified for that purpose as contemplated by Section 2.01.
"Responsible Officer", when used with respect to the Trustee,
means the Chairman or Vice Chairman of its board of directors, the Chairman or
Vice Chairman of the executive
<PAGE> 14
committee of the board of directors, the President, any Vice President, any
senior trust officer, any trust officer, any assistant trust officer or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be the
above-named officers, or to whom any corporate trust matter is referred because
of such officer's knowledge of and familiarity with the particular subject.
"Security" or "Securities" has the meaning stated in the
recitals of this Indenture and means any Security or Securities, as the case may
be, authenticated and delivered pursuant to this Indenture. Whenever this
Indenture refers to any interest on or with respect to any Security that is
represented by a coupon, such reference to the Security also shall include
reference to a coupon.
"Security Register", when used with respect to a Registered
Security, has the meaning specified in Section 2.06(b).
"Securityholder", "holder of Securities", "holder" or other
similar term, when used with respect to a Registered Security, means any Person
in whose name at the time a particular Registered Security is registered on the
Security Register and, when used with respect to a Bearer Security or coupon,
the bearer thereof.
"Senior Indebtedness" means: (a) the principal of, premium, if
any, and interest on all indebtedness of the Company for money borrowed, whether
outstanding on the date of execution of this Indenture or thereafter created,
assumed or incurred; (b) indebtedness for borrowed money of others for the
payment of which the Company is responsible or liable as guarantor or otherwise;
and (c) any obligation of the Company under any interest rate or currency swap
agreement; provided, however, that, in the case of both clauses (a) and (b),
such indebtedness and obligations that are expressly stated to rank junior in
right of payment to, or pari passu in right of payment with, the Securities
shall not be Senior Indebtedness for purposes of this Indenture.
"Special Record Date" has the meaning specified in Section
2.09.
"Stated Maturity", when used with respect to any Security or
any payment of premium or any installment of interest thereon, means the date
specified in such Security or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such payment of
premium or such installment of interest is due and payable.
<PAGE> 15
"Subsidiary" means any corporation of which a majority of the
aggregate voting power of the outstanding Voting Stock at the time shall be
owned by the Company or by the Company and one or more Subsidiaries or by one or
more Subsidiaries.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
it was in force at the date of execution of this Indenture, except as provided
in Section 9.03.
"Trustee" means the Person identified as the Trustee in the
first paragraph of this Indenture until a successor shall succeed to the trusts
created by this Indenture pursuant to the provisions of Article Six, and
thereafter shall mean such successor.
"United States" means the United States of America (including
the District of Columbia) and its possessions.
"Vice President", when used with respect to the Company or the
Trustee, means any such officer whether or not designated by a number or a word
or words added before or after such title.
"Voting Stock" of a corporation or other entity means stock of
the class or classes having general voting power in an election of the board of
directors, managers or trustees of such corporation or other entity
(irrespective of whether, at the time, stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
ARTICLE TWO
THE SECURITIES AND SECURITY FORMS
SECTION 2.01. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited. Securities may be issued in one or
more series.
The terms and conditions listed below, as applicable, of any
series of Securities shall be established either in an indenture supplemental
hereto or in or pursuant to a resolution of the Board of Directors:
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from Securities of all
other series);
(2) any limit upon the aggregate principal amount of
the Securities of the series that may be
<PAGE> 16
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, other Securities of the series pursuant to
Section 2.05, 2.06, 2.07, 8.04 or 10.07);
(3) the percentage of their principal amount at which
the Securities of the series shall be issued;
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates (which may be fixed or
variable) at which the Securities of the series will bear interest, if
any, or the formula by which interest shall be calculated by the
Company or an agent designated for such purpose;
(6) the date or dates from which any such interest
will accrue or the method by which such date or dates will be
determined;
(7) the Interest Payment Dates on which such interest
shall be payable and the Regular Record Date for the interest payable
on any Registered Security on any Interest Payment Date;
(8) the place or places, if any, in addition to those
specified herein, where the principal of and any premium or interest on
Securities of the series shall be payable (the "Place of Payment"), any
Registered Securities of the series may be surrendered for registration
of transfer, Securities of the series may be surrendered for exchange
and notices and demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served and where
notices to holders pursuant to this Indenture will be published;
(9) the price or prices at which, the period or
periods within which and the terms and conditions upon which Securities
of the series may be redeemed, in whole or in part, at the option of
the Company, pursuant to any sinking fund or otherwise;
(10) the obligation, if any, of the Company to
redeem, repay or purchase Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a holder
thereof and the price or prices at which, the period or periods within
which and the other terms and conditions upon which Securities of the
series shall be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligation, which in the
<PAGE> 17
case of Securities of any series that are repayable at the option of
a holder thereof shall be set forth in the form of such Security;
(11) any restrictive covenants included for the
benefit of the holders of the Securities of the series;
(12) any Event of Default with respect to the
Securities of such series, if not set forth herein or if different from
those set forth herein;
(13) the principal amount of the Securities of the
series that are Original Issue Discount Securities payable upon
declaration of acceleration of the maturity of the Securities of the
series;
(14) the currency or currency unit for which the
Securities of the series may be purchased, the currency or currency
unit in which the payment of principal and interest on such Securities
will be payable, the fight of the Company or the Holder to elect a
currency different from that in which the Securities of the series are
denominated for payments of principal and interest and the Exchange
Rate Agent, if any;
(15) any index used to determine the amount of
payments of principal of and interest on the Securities of the series;
(16) whether Securities of the series are to be
issuable as Registered Securities, Bearer Securities or both, whether
Securities of the series are to be issuable with or without coupons or
both and, in the case of Bearer Securities, the date as of which such
Bearer Securities shall be dated if other than the date of original
issuance of the first Security of such series of like tenor and term to
be issued;
(17) whether and on what terms the Securities of the
series will be convertible or exchangeable into shares of preferred
stock or common stock of the Company;
(18) whether any of the Securities of the series will
be issuable initially as a temporary Global Security and whether any of
the Securities of the series are to be issuable as a permanent Global
Security, or any combination thereof and, if so, the Depositary or
Depositaries therefor;
(19) if a temporary Global Security is to be issued
with respect to such series, the requirements for certification of
ownership by non-United States persons
<PAGE> 18
that will apply prior to (a) the issuance of a definitive Bearer
security or (b) the payment of interest on an Interest Payment Date
that occurs before the issuance of a definitive Bearer Security;
(20) the circumstances under which Securities of the
series may be exchanged for Securities issued in a different form;
(21) other than as set forth herein, any paying
agents, transfer agents, registrars or other agents with respect to the
Securities of the series;
(22) whether and under what circumstances the Company
will pay additional amounts to any Holder of Securities of the series
who is not a United States Person in respect of any tax, assessment or
governmental charge required to be withheld or deducted and, if so.
whether the Company will have the option to redeem rather than pay any
additional amounts;
(23) the form of Securities of such series; and
(24) any other terms of the series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any series and the coupons appertaining to
Bearer Securities of such series, if any, issued under this Indenture in all
respects shall be equally and ratably entitled to the benefits hereof with
respect to such series without preference, priority or distinction on account of
actual time or times of authentication and delivery or Maturity of the
Securities of such series. All Securities of the same series and the coupons
appertaining to Bearer Securities of such series, if any, shall be substantially
identical except as to denomination and except as may otherwise be provided
either in an indenture supplemental hereto or a resolution of the Board of
Directors.
SECTION 2.02. Form of Securities and of Trustee's Certificate
of Authentication. The Registered Securities, if any, and the Bearer Securities
and related coupons, if any, of each series and the certificates of
authentication on the Securities shall be in substantially the form as shall be
established as provided in Section 2.01 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 be
<PAGE> 19
determined consistently herewith by the officers executing such Securities or
coupons, as evidenced by their execution of the Securities or coupons. If the
form of Securities of any series or coupons (including any Global Security) is
established by action taken pursuant to a resolution of the Board of Directors,
a copy of an appropriate record of such action shall be certified by the
Secretary or any Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect as of the date of such
certificate, and shall be delivered to the Trustee at or prior to the delivery
of the Company Order contemplated by Section 2.04(b) or the authentication and
delivery of such Securities.
The definitive Securities and coupons, if any, shall be
printed, lithographed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange, all as determined by the
officers executing such Securities or coupons, as evidenced by their execution
of such Securities or coupons.
The form of Trustee's certificate of authentication for all
Securities shall be as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities issued under the
within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By
---------------------------------
Authorized Signatory
SECTION 2.03. Securities in Global Form. (a) If Securities of
a series are issuable in whole or in part in global form, as specified in the
manner contemplated by Section 2.01, then, notwithstanding the provisions of
clause (11) of Section 2.01 or Section 2.04, such Global Security shall
represent such of the Outstanding Securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of Outstanding Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities represented thereby from time to time
may be reduced to reflect exchanges. Any endorsement of a Global Security to
reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby, shall be made in such manner and upon
<PAGE> 20
instructions given by such Person or Persons as shall be specified in such
Global Security or in the Company Order to be delivered to the Trustee pursuant
to Section 2.04(b).
(b) The provisions of the last sentence of Section 2.05(b)
shall apply to any Securities represented by a Global Security if such
Securities were never issued and sold by the Company (whether because of failure
of settlement or otherwise) and the Company delivers to the Trustee the Global
Security together with written instructions with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of Section 2.05(b), notwithstanding
the absence of delivery of such Securities as contemplated thereby.
(c) Global Securities may be issued in either registered or
bearer form and in either temporary or permanent form.
SECTION 2.04. Denomination, Authentication and Dating of
Securities. (a) Securities of each series shall be issuable in such form and
denominations as shall be specified in the form of Security for such series
approved or established pursuant to Section 2.02. In the absence of any
specification, as provided in Section 2.01, with respect to the Securities of
any series, the Registered Securities of such series, if any, shall be issuable
in denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, if any, shall be issuable in the denomination of
$5,000. Each Registered Security shall be dated as of the date of its
authentication. Each Bearer Security shall be dated as of the date specified in
the manner contemplated by Section 2.01.
(b) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication. Except as otherwise
provided in this Article Two, the Trustee thereupon shall authenticate and
deliver such Securities in accordance with a Company Order; provided, however,
that in connection with its original issuance a Bearer Security may be delivered
only outside the United States and, except in the case of a temporary Global
Security, only if the Company or its agent shall have received from the Person
entitled to receive the Bearer Security a Bearer Security Tax Certificate and
only if the Company and the Trustee have no reason to know that such certificate
is false.
(c) To the extent authorized in or pursuant to a resolution of
the Board of Directors or established in an
<PAGE> 21
indenture supplemental hereto, such Company Order may be electronically
transmitted and may provide instructions as to registration of holders,
principal amounts, rates of interest, Stated Maturities and other matters
contemplated by such resolution of the Board of Directors or supplemental
indenture to be so instructed in respect thereof.
(d) In authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and, subject to Section 6.01, shall be
fully protected in relying upon:
(i) a copy of the resolution or resolutions of the Board
of Directors in or pursuant to which the terms and form of the
Securities were established, 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 as of the date of such
certificate;
(ii) an executed supplemental indenture, if any;
(iii) an Officers' Certificate delivered in accordance
with Section 16.05; and
(iv) an Opinion of Counsel which shall state:
(A) that the form of such Securities and coupons, if
any, has been established by a supplemental indenture or by or
pursuant to a resolution of the Board of Directors in
accordance with Sections 2.01 and 2.02 and in conformity with
the provisions of this Indenture;
(B) that the terms of such Securities and coupons, if
any, have been established in accordance with Section 2.01 and
in conformity with the other provisions of this Indenture;
(C) that such Securities, when authenticated and
delivered by the Trustee and issued (with coupons attached, if
applicable) by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer,reorganization
and moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general
equity principles;
<PAGE> 22
(D) that all conditions precedent, if any, provided
for in this Indenture have been complied with; and
(E) that the execution and delivery by the Company of
such Securities and coupons, if any, do not conflict with any
law, administrative regulation or court decree applicable to
the Company.
(e) If the Company shall establish pursuant to Section 2.01
that the Securities of a series are to be issued in whole or in part in the form
of one or more Global Securities, then the Company shall execute and the
Trustee, in accordance with this Section 2.04 and the Company Order with respect
to such series, shall authenticate and deliver one or more Global Securities in
permanent or temporary form that (i) shall represent and shall be denominated in
an aggregate amount equal to the aggregate principal amount of the Outstanding
Securities of such series to be represented by one or more Global Securities,
(ii) shall be registered in the name of the Depositary for such Global Security
or Securities or the nominee of such Depositary and (iii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instruction.
(f) The Trustee shall have the right to decline to
authenticate and deliver any Securities under this Section 2.04 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 or vice presidents shall
determine that such action would expose the Trustee to personal liability to
existing holders.
(g) Notwithstanding any contrary provision herein, if all
Securities of a series are not to be originally issued at one time, it shall not
be necessary for the Company to deliver to the Trustee a Company Order,
Officers' Certificate, resolution of the Board of Directors, supplemental
indenture or Opinion of Counsel otherwise required pursuant to Section 2.04(b)
or Section 2.04(d) at or prior to the time of authentication of each Security of
such series if such documents are delivered to the Trustee or its agent at or
prior to the authentication upon original issuance of the first Security of such
series to be issued. In such event, any subsequent request by the Company to the
Trustee to authenticate Securities of such series upon original issuance
<PAGE> 23
shall constitute a representation and warranty by the Company that, as of the
date of such request, the statements made in the Officers' Certificate or other
certificates delivered pursuant to Section 2.04(d) shall be true and correct as
if made on such date. A Company Order, Officers' Certificate, resolution of the
Board of Directors or supplemental indenture delivered by the Company to the
Trustee in the circumstances set forth in this Section 2.04(g) may provide that
Securities that are the subject thereof will be authenticated and delivered by
the Trustee or its agent on original issue from time to time in the aggregate
principal amount established for such series pursuant to such procedures
acceptable to the Trustee as may be specified from time to time by Company Order
upon the telephonic, electronic or written order of persons designated in such
Company Order, supplemental indenture or resolution of the Board of Directors
(any such telephonic or electronic instructions to be promptly confirmed in
writing by such persons) and that such persons are authorized to determine,
consistent with such Company Order, supplemental indenture or resolution of the
Board of Directors, such terms and conditions of said Securities as are
specified in such Company Order, supplemental indenture or resolution of the
Board of Directors.
(h) Each Depositary designated pursuant to clause (9) of
Section 2.01 for a Global Security in registered form, at the time of its
designation and at all times while it serves as Depositary, shall be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.05. Execution of Securities. (a) The Securities and
the related coupons shall be signed in the name and on behalf of the Company by
the manual or facsimile signature of its Chairman of the Board, its Chief
Executive Officer or its President or, in lieu thereof, of any Senior Vice
President or its Treasurer and attested by its Secretary, under its corporate
seal (which may be printed, engraved or otherwise reproduced thereon, by
facsimile or otherwise). For the purpose of any such signature or attestation,
the Company may adopt and use the facsimile signature of any person who has been
or is or shall be such officer.
(b) No Security or appurtenant coupon shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose unless such
security bears thereon a certificate of authentication substantially in the form
set forth in Section 2.02, manually executed by an authorized signatory of the
Trustee. Such certificate by the Trustee upon any Security executed by the
Company shall be conclusive evidence that the Security so authenticated has been
duly authenticated and delivered under this Indenture. Except as
<PAGE> 24
permitted by Section 2.07, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and cancelled. Notwithstanding the foregoing, if any Security or
portions thereof shall have been duly authenticated and delivered hereunder but
never issued and sold by the Company (whether because of failure of settlement
or otherwise), and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 2.10 together with a written statement
stating that such Security or portion thereof has never been issued and sold by
the Company, for all purposes of this Indenture such Security shall be deemed
never to have been authenticated and delivered hereunder and shall not be
entitled to the benefits of this Indenture.
(c) In case any officer of the Company whose manual or
facsimile signature appears on any of the Securities or coupons shall cease to
be such officer before the Securities or coupons so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Securities or coupons nevertheless may be authenticated and delivered or
disposed of as though the person whose manual or facsimile signature appears on
such Securities or coupons had not ceased to be such officer of the Company; and
any Security or coupon may bear the manual or facsimile signature on behalf of
the Company by such persons as, at the actual date of the execution of such
Security or coupon, shall be the proper officers of the Company, although at the
date of the execution of this Indenture any such person was not such an officer.
SECTION 2.06. Exchange and Registration of Transfer of
Securities. (a) Registered Securities of any series may be exchanged for a like
aggregate principal amount of Registered Securities of other authorized
denominations and of like tenor and terms of the same series. Registered
Securities to be exchanged shall be surrendered at the office or agency to be
maintained by the Company pursuant to Section 4.02 in each Place of Payment for
such series of Registered Securities, and the Company shall execute and cause to
be registered, and the Trustee shall authenticate and deliver in exchange
therefor, the Registered Security or Securities which the Securityholder making
the exchange shall be entitled to receive.
(b) For each series of Registered Securities, the Company
shall cause to be kept in at least one such office or agency a Security register
(the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for registration of Registered
Securities and registration of transfer of Registered Securities as provided in
this Article Two. Each such Security Register shall be in written form or in any
other
<PAGE> 25
form capable of being converted into written form within a reasonable time. At
all reasonable times such Security Registers shall be open for inspection by the
Trustee. Upon due presentment for registration of transfer of any Registered
Security of any series at any such office or agency, the Company shall execute
and register and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Registered Security or Securities of the same
series and of like tenor and terms for an equal aggregate principal amount.
Unless otherwise provided (pursuant to Section 2.01 or otherwise), the Company
initially appoints the Trustee, at the principal office of the Trustee, as a
Security registrar for each series of Registered Securities.
(c) All Registered Securities presented for registration of
transfer or for exchange or payment, if so required by the Company or the
Trustee, shall be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee duly
executed by, the holder or his attorney duly authorized in writing.
(d) To the extent specified in the manner provided by Section
2.01, Registered Securities or Bearer Securities of any series may be issued in
exchange for Bearer Securities (except as otherwise specified in the manner
contemplated by Section 2.01 with respect to a Bearer Security in global form)
of the same series, of any authorized denomination and of like tenor and terms
and aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any office or agency specified in the manner provided by Section
2.01, with all unmatured coupons and all unpaid matured coupons thereto
appertaining. If the holder of a Bearer Security is unable to produce any such
unmatured coupon or coupons or unpaid matured coupon or coupons, such exchange
may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company and the Trustee in an amount equal to the amount
represented by such missing coupon or coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there is
furnished to them such security or indemnity as they may require to hold
harmless each of them and any Paying Agent. If thereafter the holder of such
Security shall surrender to any Paying Agent any such missing coupon in respect
of which such payment shall have been made, such holder shall be entitled to
receive the amount of such payment; provided, however, that, except as otherwise
provided in Section 4.02, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the holder making the exchange is entitled to
receive.
<PAGE> 26
(e) If at any time the Depositary for the Global Securities of
a series notifies the Company that it is unwilling or unable to continue as
Depositary for the Global Securities of such series or if at any time the
Depositary for the Registered Securities of such series shall no longer be
eligible under Section 2.03 because it no longer is a clearing agency registered
under the Securities Exchange Act of 1934 and any other applicable statute or
regulation, the Company shall appoint a successor Depositary with respect to the
Global Securities of such series. If a successor Depositary for the Global
Securities of such series is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such ineligibility, the
Company's election pursuant to Section 2.01(9) shall no longer be effective with
respect to the Securities of such series and the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive form in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.
(f) The Company at any time and in its sole discretion may
determine that the Securities of any series issued in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such
series in definitive form and in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.
(g) If specified by the Company pursuant to Section 2.01 with
respect to a series of Securities, the Depositary for such series of Securities
may surrender a Global Security for such series of Securities in exchange in
whole or in part for Securities of such series of like tenor and terms and in
definitive form on such terms as are acceptable to the Company and such
Depositary. Thereupon the Company shall execute, and the Trustee shall
authenticate and deliver:
(i) to each Person specified by such Depositary a new
Security or new Securities of the same series, of like tenor and terms
and of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Security; and
<PAGE> 27
(ii) to such Depositary a new Global Security of like
tenor and terms and in a denomination equal to the difference, if any,
between the principal amount of the surrendered Global Security and the
aggregate principal amount of Securities delivered to holders thereof.
(h) In any exchange provided for in Section 2.06(e), Section
2.06(f) or Section 2.06(g), the Company will execute and the Trustee will
authenticate and deliver Securities (i) in definitive registered form in
authorized denominations, if the Securities of such series are issuable as
Registered Securities, (ii) in definitive bearer form in authorized
denominations, with unmatured coupons attached, if the Securities of such series
are issuable as Bearer Securities or (iii) as either Registered or Bearer
Securities, if the Securities of such series are issuable in either form;
provided, however, that (A) no definitive Bearer Security shall be delivered in
exchange for a temporary Global Security unless the Company or its agent shall
have received from the person entitled to receive the definitive Bearer Security
a Bearer Security Tax Certificate, (B) delivery of a Bearer Security shall occur
only outside the United States and (C) no definitive Bearer Security will be
issued if the Company or the Trustee has reason to know that such certificate is
false.
(i) Upon the exchange of all of a Global Security for
Securities in certificated form, such Global Security shall be cancelled by the
Trustee. The exchange of any portion of a Global Security for Securities in
certificated form shall be subject to Section 2.03(a). Registered Securities
issued in exchange for all or part of a Global Security shall be registered in
such names and in such authorized denominations as the Depositary for such
Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Registered Securities to the persons in whose names such Securities are so
registered. The Trustee shall deliver Bearer Securities issued in exchange for
all or part of a Global Security to the persons, and in such authorized
denominations, as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee; provided, however, that (A) no definitive Bearer Security
shall be delivered in exchange for all or part of a temporary Global Security
unless the Company or its agent shall have received from the person entitled to
receive the definitive Bearer Security a Bearer Security Tax Certificate,
<PAGE> 28
(B) delivery of a Bearer Security shall occur only outside the United States and
(C) no definitive Bearer Security will be issued if the Company or the Trustee
has reason to know that any such certificate is false.
(j) No service charge shall be made for any exchange or
registration of transfer of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such exchange or registration of transfer.
(k) The Company shall not be required (i) to issue, register
the transfer of or exchange Securities of any particular series during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities of such series selected for redemption under
Section 11.03 and ending at the close of business on the day of such mailing,
(ii) to register the transfer of or exchange any Registered Security so selected
for redemption in whole or in part, except the unredeemed portion of any
Registered Security being redeemed in part or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series, provided that such
Registered Security shall be surrendered immediately for redemption with written
instruction for payment consistent with the provisions of this Indenture.
(l) Notwithstanding anything herein to the contrary: the
exchange of Bearer Securities for Registered Securities shall be subject to
applicable laws and regulations in effect at the time of exchange; and neither
the Company nor the Trustee or any Security registrar shall exchange any Bearer
Securities into Registered Securities if it has received an Opinion of Counsel
that as a result of such exchanges the Company could suffer adverse consequences
under the United States Federal income tax laws and regulations then in effect
and the Company has delivered to the Trustee a Company Order directing the
Trustee not to make such exchanges thereafter unless and until the Trustee
receives a subsequent Company Order to the contrary. The Company shall deliver
copies of such Company Order to the Security registrar.
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Securities.
(a) In case any temporary or definitive Security of any series or any related
coupon shall become mutilated or be destroyed, lost or stolen, the Company in
its discretion may execute, and upon its request and in the absence of notice to
the Company and the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Trustee shall authenticate and deliver a new Security
of the same series or related coupon, of equal aggregate principal amount and of
<PAGE> 29
like tenor and terms bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Security or coupon, or in lieu of
and in substitution for the Security or coupon so destroyed, lost or stolen. In
every case the applicant for a substituted Security or coupon shall furnish to
the Company and to the Trustee such security or indemnity as may be required by
them to hold each of them harmless, and, in every case of destruction, loss or
theft, the applicant also shall furnish to the Company and to the Trustee
evidence to their satisfaction of the destruction, loss or theft of such
security or coupon and of the ownership of such Security or coupon.
(b) The Trustee may authenticate any such substitute Security
and deliver the same upon the written request or authorization of any officer of
the Company. Upon the issuance of any substitute Security or coupon, 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
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith. In case any Security or coupon which has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the Company,
instead of issuing a substitute Security or coupon, may pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Security or coupon) if the applicant for such payment shall furnish to the
Company and to the Trustee such security or indemnity as may be required by them
to hold each of them harmless and, in the case of destruction, loss or theft,
evidence satisfactory to the Company and the Trustee of the destruction, loss or
theft of such Security or coupon and of the ownership of such Security or
coupon.
(c) Every substitute Security or coupon issued pursuant to the
provisions of this Section 2.07 by virtue of the fact that any Security or
coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Security
or coupon 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 Securities
or coupons of the relevant series duly issued under this Indenture. All
Securities or coupons shall be held and owned by the holders upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons 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.
<PAGE> 30
(d) Notwithstanding the foregoing, the payment of principal of
and any premium and interest on Bearer Securities, except as otherwise provided
in Section 4.02, shall be payable only at an office or an agency located outside
of the United States, and, with respect to any coupons, interest represented
thereby shall be payable only upon presentation and surrender of such coupons.
SECTION 2.08. Temporary Securities. (a) Pending the
preparation of definitive Securities of any series, the Company may execute and
the Trustee shall authenticate and deliver temporary Securities (printed or
lithographed). Temporary Securities shall be issuable in any authorized
denomination, and substantially in the form of the definitive Securities of such
series (and of like tenor and terms) in lieu of which they are issued in
registered form or, if authorized, in bearer form with one or more coupons or
without coupons, but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Company.
In the case of Securities of any series issuable as Bearer Securities, such
temporary Securities may be in global form, representing all or any part of the
Outstanding Securities of such series.
(b) Unless otherwise provided pursuant to Section 2.01:
(i) Except in the case of temporary Securities in global
form, every such temporary Security shall be authenticated by the
Trustee in substantially the same manner, and with the same effect, as
the definitive Securities. Without unreasonable delay the Company will
execute and deliver to the Trustee definitive Securities of such series
and thereupon any or all temporary Securities of such series
(accompanied, if applicable, by all unmatured coupons and all unpaid
matured coupons appertaining thereto) may be surrendered in exchange
therefor at the principal office of the Trustee, and the Trustee shall
authenticate and deliver in exchange for such temporary Securities an
equal aggregate principal amount of definitive Securities of such
series of authorized denominations. Such exchange shall be made at the
Company's expense and without any charge to the holder. Until so
exchanged, the temporary Securities of any series in all respects shall
be entitled to the same benefits under this Indenture as definitive
Securities of such series authenticated and delivered under this
Indenture. Notwithstanding the foregoing, no Bearer Security shall be
delivered in exchange for a Registered Security, and a Bearer Security
shall be delivered in exchange for a Bearer Security only in compliance
with the conditions set forth in Section 2.06.
<PAGE> 31
(ii) If Securities of any series are issued in temporary
global form, any such temporary Global Security, unless otherwise
provided pursuant to Section 2.01, shall be delivered to the Depositary
for the benefit of Euro-clear and CEDEL S.A. for credit to the
respective accounts of the beneficial owners of such Securities or to
such other accounts as they may direct.
(iii) Any such temporary Global Security shall be
exchangeable, on the terms and in the manner set forth therein, in
whole or in part, for an equal aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like
tenor and terms as the portions of such temporary Global Security to be
exchanged. Any definitive Bearer Security shall be delivered in
exchange for a portion of a temporary Global Security only upon receipt
by the Trustee from the Person entitled to receive such definitive
Bearer Security of a Bearer Security Tax Certificate.
(iv) Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall be entitled in all respects to
the same benefits under this Indenture as definitive Securities of the
same series and of like tenor and terms authenticated and delivered
hereunder, except that any interest payable with respect to a temporary
Global Security will be paid as specified therein.
SECTION 2.09. Payment of Interest; Interest Rights. Interest
on any Registered Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Registered Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the holder of
such coupon when due in accordance with the provisions of this Indenture.
Payment of interest on any Registered Security may be made as provided in
Section 3.02. Except as otherwise provided in the terms of
<PAGE> 32
any particular series pursuant to Section 2.01. interest will be calculated on
the basis of a year consisting of twelve 30-day months.
Any interest on any Security that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date ("Defaulted
Interest") forthwith shall cease to be payable to the holder on the relevant
Regular Record Date by virtue of having been such holder; and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names such 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 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 provided
in this clause (i). Thereupon the Trustee shall fix a Special Record
Date for the payment of such Defaulted Interest which shall be not more
than 15 nor fewer than ten days prior to the date of the proposed
payment and not fewer than ten days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee promptly shall notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first class, postage prepaid, to each holder at his address as
it appears in the Security Register, not fewer 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
given as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (ii).
(ii) The Company may make payment of any Defaulted
Interest on any such Security in any other lawful manner not
inconsistent with the requirements of
<PAGE> 33
any securities exchange on which the Securities of that series may be
listed, and upon such notice as may be required by any such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause (ii), such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.09, each
Security of any series delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security of such series
shall carry the rights to interest accrued and unpaid, and to accrue, that were
carried by such other Security.
Subject to the limitations set forth in Section 4.02, the
holder of any coupon appertaining to a Bearer Security shall be entitled to
receive the interest payable on such coupon upon presentation and surrender of
such coupon on or after the Interest Payment Date of such coupon at an office or
agency maintained for such purpose pursuant to Section 4.02.
SECTION 2.10. Cancellation of Securities Paid, etc. All
Securities and coupons surrendered for the purpose of payment, exchange or
registration of transfer, if surrendered to the Company or any Paying Agent or
any Security registrar, shall be delivered to the Trustee and promptly cancelled
by the Trustee, or, if surrendered to the Trustee, promptly shall be cancelled
by it; and no Securities or coupons shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee may
destroy cancelled Securities or coupons and will deliver a certificate of such
destruction to the Company.
ARTICLE THREE
SUBORDINATION OF SECURITIES
SECTION 3.01. Agreement of Securityholders That Securities
Subordinated to Extent Provided. The Company, for itself and its successors and
assigns, covenants and agrees and each holder of Securities and any related
coupons by such holder's acceptance of a Security or coupon likewise covenants
and agrees that, subject to the provisions of Article Fourteen, the payment of
the principal of and any premium and interest on any and all Securities and
coupons is expressly subordinated hereby, to the extent and in the manner set
forth in this Article Three, to the prior payment in full of all Senior
Indebtedness. The provisions of this Article Three shall constitute a continuing
offer to all persons who, in reliance upon such provisions, become holders of,
or continue to hold, Senior Indebtedness, and such provisions are made for
<PAGE> 34
the benefit of the holders of Senior Indebtedness, and such holders are hereby
made obligees under this Article Three as if their names were written in this
Article Three as such, and they and each of them may proceed to enforce the
provisions of this Article Three.
SECTION 3.02. Company Not to Make Payments with Respect to
Securities in Certain Circumstances. (a) In the event and during the
continuation of any default in the payment of principal of, premium, if any or
interest on any Senior Indebtedness, or in the event that any event of default
with respect to any Senior Indebtedness shall have occurred and be continuing
and shall have resulted in such Senior Indebtedness becoming or being declared
due and payable prior to the date on which it would otherwise have become due
and payable, unless and until such event of default shall have been cured or
waived or shall have ceased to exist and such acceleration shall have been
rescinded or annulled, or (b) in the event any judicial proceeding shall be
pending with respect to any such default in payment or such event or default,
then no payment or distribution of any kind or character, whether in cash,
properties or securities shall be made by the Company on account of principal
of, premium, if any or interest, if any, on the Securities or on account of the
purchase or other acquisition of Securities by the Company or any Subsidiary, in
each case unless and until all amounts due or to become due on such Senior
Indebtedness are paid in full.
(b) In the event that notwithstanding the provisions of this
Section 3.02 the Company shall make any payment to the Trustee on account of the
principal of or any premium or interest on the Securities prohibited by Section
3.02(b), then such payment shall be held by the Trustee in trust for the benefit
of, and shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness (pro rata as to each of such holders on the basis of the respective
amounts of Senior Indebtedness held by them) or their representative or the
trustee under the indenture or other agreement (if any) pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in accordance with the terms of such Senior Indebtedness,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness.
(c) The provisions of this Section 3.02 shall not apply to any
payment with respect to which Section 3.03 shall apply.
<PAGE> 35
SECTION 3.03. Securities Subordinated to Prior Payment of All
Senior Indebtedness on Insolvency, Dissolution, Liquidation or Reorganization of
Company. (a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company (each such event, if any,
herein sometimes referred to as a "Proceeding"), then the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due or
to become due on such Senior Indebtedness, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Indebtedness, before the Holders of the Securities are
entitled to receive or retain any payment or distribution of any kind or
character, whether in cash, property or securities on account of principal of,
premium, if any, or interest, if any, on the Securities or on account of the
purchase or other acquisition of Securities by the Company or any Subsidiary and
to that end the holders of Senior Indebtedness shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities which may be payable or
deliverable in respect of the Securities in any such Proceeding.
(b) In the event that, notwithstanding the foregoing
provisions of this Section 3.03, the Trustee or the holder of any Security shall
have received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, before all amounts due or
to become due on all Senior Indebtedness are paid in full or payment thereof is
provided for in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Indebtedness, and if such fact shall, at or prior to
the time of such payment or distribution, have been made known to the Trustee
or, as the case may be, such holder, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all amounts due or to become due on all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all amounts due or to become
due on all Senior Indebtedness in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Section 3.03 only, the words "any payment
or distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
<PAGE> 36
corporation provided for by a plan of reorganization or readjustment which
securities are subordinated in right of payment to all then outstanding Senior
Indebtedness to substantially the same extent as the Securities are so
subordinated as provided in this Article Three. The consolidation of the Company
with, or the merger of the Company into, another Person or the liquidation or
dissolution of the Company following the sale of all or substantially all of its
properties and assets as an entirety to another Person upon the terms and
conditions set forth in Article Nine shall not be deemed a Proceeding for the
purposes of this Section 3.03 if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by sale such properties
and assets as an entirety, as the case may be, shall, as a part of such
consolidation, merger, or sale comply with the conditions set forth in Article
Nine.
SECTION 3.04. Prior Payment to Senior Indebtedness Upon
Acceleration of Securities. (a) In the event that any Securities are declared
due and payable before their Stated Maturity, then and in such event the holders
of the Senior Indebtedness outstanding at the time such Securities so become due
and payable shall be entitled to receive payment in full of all amounts due on
or in respect of such Senior Indebtedness (including any amounts due upon
acceleration), or provision shall be made for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, before the Holders of the Securities are entitled to receive any
payment or distribution of any kind or character, whether in cash, properties or
securities by the Company on account of the principal of, or premium, if any, or
interest on the Securities or on account of the purchase or other acquisition of
Securities by the Company or any Subsidiary.
(b) In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of any Security
prohibited by the foregoing provisions of this Section 3.04, and if such fact
shall, at or prior to the time of such payment, have been made known to the
Trustee or, as the case may be, such holder, then and in such event such payment
shall be paid over and delivered forthwith to the Company.
(c)_ The provisions of this Section 3.04 shall not apply to
any payment with respect to which Section 3.03 would be applicable.
SECTION 3.05. Securityholders to Be Subrogated to Rights of
Holders of Senior Indebtedness. Subject to the payment in full of all Senior
Indebtedness, the holders of the Securities and any related coupons shall be
subrogated to the
<PAGE> 37
rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on the Securities shall be paid in full. For the purpose
of such subrogation, no payments or distributions to the holders of the Senior
Indebtedness (whether by or on behalf of the Company or by or on behalf of the
holders of the Securities or any related coupons) by virtue of this Article
Three that otherwise would have been made to the holders of the Securities or
coupons shall be deemed, as between the Company and the holders of the
Securities and coupons, to be payment by the Company to or on account of the
Senior Indebtedness.
SECTION 3.06. Obligation of the Company Unconditional, etc.
The provisions of this Article Three are and are intended solely for the purpose
of defining the relative rights of the holders of the Securities and any related
coupons on the one hand and the holders of the Senior Indebtedness on the other
hand. Nothing contained in this Article Three or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company and the
holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Securities the principal of and any
premium and interest on the 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 Securities or the coupons and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything in this Article Three or elsewhere in this Indenture prevent the
Trustee or the holder of any Security or coupon from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article Three of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy. Nothing contained in this Article Three is
intended to alter the rights between the holders of the Securities and any
related coupons and the Company's creditors other than the holders of the
Securities or coupons and the holders of Senior Indebtedness. Upon any payment
or distribution of assets of the Company referred to in this Article Three, the
Trustee, subject to the provisions of Section 6.01, and the holders of the
Securities and any related coupons shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the holders of the Securities and coupons, for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of, the amounts of, the amounts payable on, the amount
<PAGE> 38
or amounts paid or distributed on and all other facts pertinent to the Senior
Indebtedness and other indebtedness of the Company and all other facts pertinent
to this Article Three.
SECTION 3.07. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice. The Company shall give prompt written notice to
a Responsible Officer of the Trustee located at its principal office of any fact
known to the Company that would prohibit, pursuant to this Article Three, the
making of any payment to or by the Trustee with respect to the Securities or any
related coupons. Notwithstanding the provisions of Section 3.01, Section 3.02 or
Section 3.03 or any other provision of this Indenture, the Trustee shall not at
any time be charged with knowledge of the existence of any fact that would
prohibit the making of any payment of money to or by the Trustee, unless and
until the Trustee shall have received at the principal office of the Trustee
written notice of such facts from the Company or from one or more holders of
Senior Indebtedness or from any trustee for such holders; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 6.01, shall be entitled to assume that no such facts exist.
SECTION 3.08. Application by Trustee of Money Deposited with
It. Anything in this Indenture to the contrary notwithstanding, any deposit of
money by the Company with the Trustee (whether or not in trust) for the payment
of the principal of or any premium or interest on any Securities or coupons
shall be subject to the provisions of Sections 3.01, 3.02, 3.03, 3.04 and 3.05
except that, if not fewer than three Business Days prior to the date on which by
the terms of this Indenture any such money may become payable for any purpose
(including without limitation the payment of principal of or any premium or
interest on any Security and any amounts immediately due and payable upon the
execution of any instrument acknowledging satisfaction and discharge of this
Indenture as provided in Article Fourteen) the Trustee shall not have received
with respect to such money the notice provided for in Section 3.07, then,
anything contained in this Article Three to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which it was received, and shall not be affected by
any notice to the contrary that may be received by it during such three Business
Day period.
SECTION 3.09. Article Applicable to Paying Agents. In case at
any time any Paying Agent other than the Trustee shall have been appointed by
the Company and be then acting under this Indenture, the term "Trustee" as used
in this Article Three shall be construed (unless the context otherwise requires)
as extending to and including such Paying Agent
<PAGE> 39
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article Three in addition to or in place of the Trustee.
SECTION 3.10. Subordination Rights Not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as provided
in this Article Three shall be prejudiced or impaired at any time in any way 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 of such act, failure to act or noncompliance with any such holder may
have or otherwise be charged with.
SECTION 3.11. Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each holder of the Securities by his acceptance of
a Security authorizes and expressly directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article Three and appoints the Trustee his attorney-in-fact for
such purpose, including in the event of any dissolution, winding up, liquidation
or reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise), action tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of its or his
Securities in the form required in such proceedings and action causing such
claim to be approved. If the Trustee does not file a proper claim or proof of
debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holder or holders
of Senior Indebtedness hereby are authorized to and have the right to file and
hereby are authorized to file an appropriate claim for and on behalf of the
holders of such Securities.
SECTION 3.12. Right of Trustee to Hold Senior Indebtedness.
The Trustee shall be entitled to all the rights set forth in this Article Three
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 shall
be construed to deprive the Trustee of any of its rights as such holder.
SECTION 3.13. Article Three Not to Prevent Events of Default.
The failure to make a payment on account of principal or any premium or interest
by reason of any provision in this Article Three shall not be construed as
preventing the occurrence of an Event of Default under Section 5.01.
<PAGE> 40
SECTION 3.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to holders of Securities
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
Three or otherwise.
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Principal and Interest. The Company
duly and punctually will pay or cause to be paid the principal of and any
premium and interest on the Securities of each series at the places, at the
respective times and in the manner provided in this Indenture and in the
Securities. Any interest due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature.
SECTION 4.02. Offices for Notices and Payments, etc. So long
as any Securities of a series remain Outstanding, the Company will maintain in
each Place of Payment for such series of Securities an office or agency where
the Securities of that series (but, except as otherwise provided below, unless
such Place of Payment is located outside the United States, not Bearer
Securities) may be presented for payment, for registration of transfer and for
exchange as provided in this Indenture and where notices and demands to or upon
the Company in respect of the Securities or of this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain, subject to any laws or regulations applicable thereto, an office or
agency in a Place of Payment for such series that is located outside the United
States where Securities of such series and the related coupons may be presented
for payment. The Company will give to the Trustee prompt written notice of the
location of each such office or agency and of any change of location thereof. In
case the Company shall fail to maintain any such office or agency 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
office of the Trustee, and the Company hereby initially appoints the Trustee its
agent to
<PAGE> 41
receive all such presentations and demands, except that Bearer Securities of
that series and the related coupons may be presented for payment at the place
specified for that purpose pursuant to Section 2.01(5). Unless otherwise
provided pursuant to Section 2.01, the Company hereby initially designates as
the Place of Payment for each series of Securities (other than Bearer Securities
of that series and the related coupons) the Borough of Manhattan, The City of
New York, New York and appoints the Trustee, at the principal office of the
Trustee, as Paying Agent in such city. Notwithstanding any other provisions to
the contrary, the Company at its option may make payment of principal and any
premium and interest with respect to any Registered Security by check mailed to
the Person entitled thereto, as such address appears on the Security Register,
except that a holder of $10,000,000 or more in aggregate principal amount of
Securities of such series and of like tenor and terms will be entitled to
receive payments by wire transfer of immediately available funds if appropriate
wire transfer instructions shall have been received in writing by the Trustee
not later than ten Business Days prior to the applicable Interest Payment Date.
No payment of principal of or any premium or interest on
Bearer Securities shall be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
provided, however, that payment of principal of and any premium and interest on
any Bearer Security may be made at an office or agency of, and designated by,
the Company located in the United States if (but only if) payment of the full
amount of such principal, premium or interest at all offices outside the United
States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions and the Trustee receives an Opinion of Counsel that such
payment within the United States is legal. Unless otherwise provided as
contemplated by Section 2.01 with respect to any series of Securities, at the
option of the holder of any Bearer Security or related coupon payment may be
made by mailing a check to an address outside the United States or by transfer
to an account maintained by the payee with a bank located outside the United
States.
The Company also from time to time may designate one more
offices or agencies (in or outside of such Place of Payment) where the
Securities of one or more series and any appurtenant coupons (subject to the
preceding paragraph) may be presented or surrendered for any and all such
purposes, and from time to time may rescind such designations. The Company will
give prompt written notice to the Trustee of any such designation and any change
in the location of any such office or agency.
<PAGE> 42
SECTION 4.03. Provisions as to Paying Agent. (a) The Company,
with respect to the Securities of each series, prior to each due date of
principal of or any premium or interest on such Securities, will deposit with
the Paying Agent for such Securities 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 to such principal, premium or interest. If the
Company shall appoint a Paying Agent other than the Trustee with respect to the
Securities of any series, the Company will notify the Trustee of its making, or
failure to make, any such payment; and the Company also shall cause any such
Paying Agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
4.03, as follows:
(1) that it will hold all sums held by it as such
agent for the payment of the principal of or any premium or interest on
such Securities (whether such sums have been paid to it by the Company
or by any other obligor on such Securities) in trust for the benefit of
the Persons entitled thereto;
(2) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on such Securities) to
make any payment of the principal of or any premium or interest on such
Securities when the same shall be due and payable; and
(3) that it forthwith will pay to the Trustee, at any
time during the continuance of an Event of Default, upon the written
request of the Trustee, all sums so held by it as such agent.
(b) If the Company shall act as its own Paying Agent with
respect to the Securities of any series, on or before each due date of the
principal of or any premium or interest on the Securities of such series, it
will set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal, premium or interest so
becoming due and will notify the Trustee of any failure to take such action and
of any failure by the Company (or by any other obligor under such Securities) to
make any payment of the principal of or any premium or interest on such
Securities when the same shall become due and payable.
(c) Notwithstanding anything in this Section 4.03 to the
contrary, the Company, at any time, for the purpose of
<PAGE> 43
obtaining a satisfaction and discharge of this Indenture or for any other
reason, may pay or by Company Order direct any Paying Agent to pay to the
Trustee all sums held in trust by the Company or any Paying Agent under this
Indenture, such sums to be held by the Trustee upon the trusts contained in this
Indenture.
(d) Notwithstanding anything in this Section 4.03 to the
contrary, the agreement to hold sums in trust as provided in this Section 4.03
is subject to Section 14.03 and Section 14.04.
SECTION 4.04. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each calendar year
commencing with the first calendar year following the issuance of Securities of
any series under this Indenture, a written certificate of the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company, covering the period from the date of issuance of such
Securities to the end of the calendar year in which such Securities were issued,
in the case of the first such certificate, and covering the preceding calendar
year, in the case of each subsequent certificate, stating, as to each signer of
such certificate, that:
(1) a review of the activities of the Company during
the year and of performance under this Indenture has been made under
his supervision;
(2) to the best of his knowledge, based on such
review, the Company has fulfilled all its conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the fulfillment of any such condition or covenant,
specifying each such default known to him and the nature and status of
such default; and
(3) such certificate sets forth as of the end of such
year a list of all Principal Constituent Banks.
SECTION 4.05. Notice of Defaults. The Company will deliver to
the Trustee within five days after the occurrence thereof written notice of any
event which with the giving of notice or the lapse of time or both would be an
Event of Default under Section 5.01.
SECTION 4.06. Corporate Existence. Except as otherwise
provided in Article Ten, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights (charter and statutory) and franchises; provided, however, that the
<PAGE> 44
Company shall not be required to preserve any right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Securityholders.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT OR ACCELERATION EVENT
SECTION 5.01. Events of Default. "Event of Default", when used
with respect to Securities of any series, means each of the following events
unless it is either inapplicable to a particular series or is specifically
deleted or modified in the supplemental indenture or resolution of the Board of
Directors under which such series of Securities is issued or in the form of
Security for such series:
(a) default in the payment of any installment of interest upon
any of the Securities of that series as and when the same shall become
due and payable, and continuance of such default for a period of 30
days;
(b) default in the payment of the principal of or any premium
on any of the Securities of that series as and when the same shall
become due and payable at their Stated Maturity, upon redemption, by
declaration or otherwise;
(c) default in the payment of any sinking fund installment or
analogous obligation as and when the same shall become due and payable
by the terms of the Securities of that series;
(d) a default or event of default as defined or designated in
any mortgage, indenture, loan agreement or instrument under which there
may be issued or borrowed, or by which there is secured or evidenced,
any indebtedness of the Company (other than Securities of such series
or indebtedness owed by the Company to any Subsidiary) or any
Subsidiary (other than indebtedness of any Subsidiary owing to the
Company or to another Subsidiary), whether such indebtedness now exists
or shall be created hereafter, shall happen and (i) not less than
$1,000,000 of such indebtedness shall be past due under such mortgage,
indenture, loan agreement or instrument or such default or event of
default shall result in not less than $1,000,000 of such indebtedness
becoming or being declared due and payable and (ii) such indebtedness
or such declaration, as the case may be,
<PAGE> 45
shall not have been discharged or rescinded or annulled within 15 days
after the date on which written notice thereof is given 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 Securities of that
series then Outstanding;
(e) a final judgment or judgments or order or orders for the
payment of money in excess of $1,000,000 shall be entered against the
Company or one or more Principal Constituent Banks and within 90 days
after entry thereof such judgment or judgments or order or orders shall
not have been discharged or the execution thereof stayed pending appeal
or within 90 days after the expiration of any such stay such judgment
or judgments or order or orders shall not have been discharged;
(f) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the
Company in the Securities of such series or in this Indenture (other
than a covenant or agreement a default in the performance of which or
the breach of which specifically is provided for elsewhere in this
Section 5.01 or which expressly has been included in this Indenture
solely for the benefit of one or more series of Securities other than
such series), and continuance of such failure for a period of 90 days
after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given 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 Securities of such series at
the time Outstanding;
(g) a court or governmental authority 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 60 consecutive days; or
(h) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or 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,
<PAGE> 46
liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company or for substantially all 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 shall take
any corporate action in furtherance of any of the foregoing.
If an Event of Default with respect to the Securities of any
series at the time Outstanding occurs and is continuing, then and in each such
case, unless the principal of all the Securities of such series already shall
have become due and payable, either the Trustee or the holders of not less than
25% in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the principal amount of all the Securities of that
series to be due and payable immediately, and upon any such declaration the same
shall become and shall be immediately due and payable. This provision, however,
is subject to the condition that, at any time after such a declaration of
acceleration, and before any judgment or decree for the payment of the money due
shall have been obtained or entered as hereinafter provided, the holders of a
majority in aggregate principal amount of the Securities of such series then
Outstanding, by written notice to the Company and to the Trustee, may waive all
defaults and rescind and annul such declaration and its consequences, if:
(1) the Company shall pay or shall deposit with the
Trustee a sum sufficient to pay:
(A) all matured installments of interest on all the
Securities of that series and the principal of and any premium
on any and all Securities of that series that shall have
become due otherwise than by acceleration (with interest on
overdue installments of interest (to the extent that payment
of such interest is enforceable under applicable law) and on
such principal and premium at the rate borne by the Securities
of that series, to the date of such payment or deposit); and
(B) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and
(2) any and all defaults with respect to Securities of
that series under this Indenture, other than the nonpayment of
principal of and any premium and accrued interest on Securities that
shall have become due by acceleration, shall have been cured or waived
as provided in Section 5.07.
<PAGE> 47
No such waiver or rescission and annulment shall extend or
shall affect any subsequent default or shall impair any right consequent
thereon.
In case the Trustee or any Securityholder 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 or any
Securityholder, then and in every such case the Company, the Trustee and such
Securityholders, subject to any determination in such proceeding, shall be
restored respectively to their several positions and rights under this
Indenture, and all rights, remedies and powers of the Company, the Trustee and
such Securityholders shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Securities on Default; Suit Therefor.
(a) Subject to the provisions of Article Three, in case default shall be made in
the payment of (i) any installment of interest upon any of the Securities as and
when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (ii) the principal of or any premium on
any of the Securities as and when the same shall have become due and payable
whether at Maturity of the Securities, by declaration or otherwise, then, upon
demand of the Trustee, the Company will pay to the Trustee, for the benefit of
the holders of the Securities, the whole amount that then shall have become due
and payable on all such Securities for principal, premium or interest, or any
combination thereof, as the case may be, with interest upon the overdue
principal and premium and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest, at
the rate borne by the Securities; and, in addition, such further amount as shall
be sufficient to cover the costs and expenses of collection, including
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents, attorneys and counsel.
(b) 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 the Securities and coupons and collect in the manner
provided by
<PAGE> 48
law out of the property of the Company or any other obligor on the Securities
and coupons, wherever situated, the money adjudged or decreed to be payable.
(c) In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company or any other obligor on the
Securities and coupons under Title 11 of the 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 on the
Securities and coupons, or to the creditors or property of the Company or such
other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as expressed in the Securities or by
declaration 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 any premium and
interest owing and unpaid in respect of the Securities, and, in case of any
judicial proceedings, (i) 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 the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Securityholders allowed in such judicial proceedings relative to the Company or
any other obligor on the Securities and coupons, its or their creditors, or its
or their property, and (ii) to collect and receive any money 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 any amount due it for reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel and any
other amounts due the Trustee under Section 6.06. To the extent that such
payment of reasonable compensation, expenses and counsel fees out of the trust
estate in any such proceedings shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other property which the holders
of the Securities and coupons may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
<PAGE> 49
(d) Nothing contained in this Section 5.02 shall be deemed to
authorize the Trustee to authorize or consent to or adopt on behalf of any
Securityholder any plan of reorganization or arrangement affecting the
Securities or related coupons or the rights of any Securityholder, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
(e) All rights of action and of asserting claims under this
Indenture, or under any of the Securities or related coupons, may be enforced by
the Trustee without the possession of any of the Securities or coupons, or the
production thereof in 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, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, shall be for
the ratable benefit of the holders of the Securities and related coupons.
SECTION 5.03. Application of Money Collected by Trustee. Any
money collected by the Trustee with respect to any series of Securities or
related coupons pursuant to Section 5.02 shall be applied, subject to the
provisions of Article Three, in the order following, at the date or dates fixed
by the Trustee for the distribution of such money, upon presentation of the
several Securities of such series or coupons, or both, as the case may be, and
stamping thereon the payment, if only partially paid, and upon surrender thereof
if fully paid:
FIRST: To payment of all amounts then due the Trustee under
Section 6.06;
SECOND: In case the principal of the Outstanding Securities of
that series shall not have become due and be unpaid, to the payment of
interest on the Securities of that series in the order of the Maturity
of the installments of such interest, with interest (to the extent
enforceable under applicable law) upon the overdue installments of
interest at the rate borne by the Securities of that series, such
payments to be made ratably to the persons entitled thereto; and
THIRD: In case the principal of the Outstanding Securities of
that series shall have become due, by declaration or otherwise, to the
payment of the whole amount then owing and unpaid upon the Securities
of that series for principal and any premium and interest, with
interest on the overdue principal and any premium and (to the extent
enforceable under applicable law) upon overdue
<PAGE> 50
installments of interest at the rate borne by the Securities of that
series; and in case such money shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Securities of that series,
then to the payment of such principal and any premium and interest
without preference or priority of principal over interest, or of
interest over principal or of any premium over principal or interest,
or of principal or interest over any premium or of any installment of
interest over any other installment of interest, or of any Security of
that series over any other Security of that series, or of any coupon
related to a Security of a series over any other coupon related to a
Security of the same series, ratably to the aggregate of such principal
and any premium and accrued and unpaid interest.
SECTION 5.04. Proceedings by Securityholders. No holder of any
Security of any series or any related coupon shall have any right to institute
any suit, action or proceeding in equity or at law upon or under or with respect
to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy under this Indenture, unless such holder previously shall have
given to the Trustee written notice of default and of the continuance thereof,
as provided in Section 5.01, and unless also (i) the holders of not less than
25% in aggregate principal amount of the Securities of that series then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as Trustee under this Indenture and
shall have offered to the Trustee such reasonable indemnity as the Trustee may
require against the costs, expenses and liabilities to be incurred in compliance
with such request, (ii) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and (iii) no direction
inconsistent with such written request has been given to the Trustee during such
60-day period by the holders of a majority in principal amount of the
Outstanding Securities of that series; it being understood and intended, and
being expressly covenanted by each Person who acquires and holds a Security or
related coupon with every other such Person, that no one or more holders of
Securities shall have any right in any manner whatever by virtue of or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of any other holder of such Securities or coupons, or to obtain or seek
to obtain priority over or preference to any other such holder, or to enforce
any right under this Indenture, except in the manner provided in this Section
5.04 and for the equal, ratable and common benefit of all holders of Securities
and coupons.
<PAGE> 51
Notwithstanding any other provision of this Indenture,
however, the right of any holder of any Security to receive payment of the
principal of and any premium and interest on such Security on or after the
respective Stated Maturities, or to institute suit for the enforcement of any
such payment on or after such respective dates against the Company, shall not be
impaired or affected without the consent of such holder.
SECTION 5.05. Proceedings by Trustee. In case of an Event of
Default under this Indenture, the Trustee in its discretion may proceed to
protect and enforce its rights and the rights of the Securityholders by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any 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
proper remedy or legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 5.06. Remedies Cumulative and Continuing; Delay or
Omission Not Waiver. All rights, powers and remedies conferred upon or reserved
to the Trustee or to the Securityholders, to the extent permitted by law, shall
be deemed cumulative and not exclusive of any thereof or of any other rights,
powers and remedies available to the Trustee or the holders of the Securities
and related coupons, now or hereafter existing, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture; and no delay or omission of the Trustee
or of any holder of any of the Securities or related coupons to exercise any
such right, power or remedy shall impair any such right, power or remedy, or
shall be construed to be a waiver of any default or an acquiescence in such
default; and, subject to the provisions of Section 5.04, every power and remedy
conferred upon or reserved 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. The assertion of any right, power or remedy
shall not prevent the concurrent assertion of any other right, power or remedy.
SECTION 5.07. Direction of Proceedings and Waiver of Defaults
by Majority of Securityholders. (a) The holders of a majority in aggregate
principal amount of the Securities of all series affected (voting as one class)
at the time Outstanding determined in accordance with Section 7.04 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
<PAGE> 52
Trustee; provided, however, that (i) such direction may not be in conflict with
law or this Indenture or expose the Trustee to personal liability or be unduly
prejudicial to the holders of the Securities and related coupons not joining in
the direction, and (ii) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with this Indenture and such direction.
(b) Prior to any declaration that the principal of the
Outstanding Securities of any series is due and payable, the holders of a
majority in aggregate principal amount of the Securities of that series at the
time Outstanding on behalf of the holders of all of the Securities of that
series may waive any past default or Event of Default under this Indenture and
its consequences except a default under a covenant in this Indenture that,
pursuant to Section 9.02, cannot be modified without the consent of each holder
of a Security of the series affected thereby. Upon any such waiver the Company,
the Trustee and the holders of the Securities of that series and the related
coupons shall be restored to their former positions and rights under this
Indenture, 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 under this Indenture shall have been
waived as permitted by this Section 5.07, such default or Event of Default, for
all purposes of the Securities, the related coupons and this Indenture, shall be
deemed to have been cured and to be not continuing.
SECTION 5.08. Notices of Defaults. The Trustee, within 90 days
after the occurrence of a default with respect to Securities of any series,
shall mail to all Securityholders of that series, at their addresses shown on
the Security Register, notice of all such defaults known to the Trustee, unless
such defaults shall have been cured or waived before the giving of such notice
(the term "default" for the purpose of this Section 5.08 being hereby defined to
mean any event which constitutes or after notice or lapse of time or both would
constitute an Event of Default); and provided that, except in the case of
default in the payment of the principal of or any premium or interest on any of
the Securities of that series or in the making of any sinking fund payment or
analogous obligation with respect to Securities of that 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 or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Securityholders of that
series.
SECTION 5.09. Undertaking to Pay Costs. All parties to this
Indenture agree, and each holder of any
<PAGE> 53
Security or coupon by his acceptance thereof shall be deemed to have agreed,
that any court in its discretion may 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
in its discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant; provided, however, that 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, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of
that series, or to any suit instituted by any Securityholder for the enforcement
of the payment of the principal of or any premium or interest on any Security on
or after the respective Stated Maturities (or, in the case of redemption or
repayment, on or after the redemption date or repayment date).
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee. In case
an Event of Default 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, its own willful misconduct or any action or failure to act taken
or omitted by it in bad faith, except that:
(a) except during the continuance of an Event of Default:
(1) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee conclusively may rely, as
<PAGE> 54
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 or
opinions that by any provisions of this Indenture specifically
are required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal
amount of the Securities of any series at the time Outstanding
(determined as provided in Section 7.04) 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 it shall have reasonable grounds for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
Whether or not expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
6.01.
The provisions of this Section 6.01 are in furtherance of and
subject to Sections 315 and 316 of the Trust Indenture Act.
SECTION 6.02. Reliance on Documents, Opinions, etc. Subject to
the applicable provisions of the Trust Indenture Act and in furtherance thereof
and subject to the provisions of Section 6.01:
<PAGE> 55
(a) the Trustee may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, 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 resolution of the Board of Directors
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 and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or omitted by it under this Indenture in
good faith and in accordance with such 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 that 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;
(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,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation,
it shall be entitled to examine the books and records of the Company to
the extent reasonably necessary to verify such facts or matters; and
(g) the Trustee may execute any of the trusts or powers under
this Indenture or perform any duties under this Indenture either
directly or by or through agents or attorneys and the Trustee shall not
be responsible for
<PAGE> 56
any misconduct or negligence on the part of any agent or attorney
appointed by it with due care under this Indenture.
SECTION 6.03. No Responsibility for Recitals, etc. The
recitals contained in this Indenture and in the Securities (except in the
Trustee's certificate of authentication) and in any coupons shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities or the coupons. The
Trustee shall not be accountable for the use or application by the Company of
any Securities or the proceeds of any Securities authenticated and delivered by
the Trustee.
SECTION 6.04. Trustee, Paying Agents or Registrar May Own
Securities. Subject to the applicable provisions of the Trust Indenture Act, the
Trustee or any Paying Agent or Security registrar, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not Trustee, Paying Agent or Security registrar.
SECTION 6.05. Money to Be Held in Trust. Subject to the
provisions of Section 14.03 and Section 14.04, all money received by the
Trustee, until used or applied as herein provided, shall be held in trust for
the purposes for which it was received. Money held by the Trustee need not be
segregated from other funds except as provided by law. The Trustee shall be
under no liability for interest on any money received by it under this
Indenture, except as the Company and the Trustee otherwise may agree.
SECTION 6.06. Compensation and Expenses of Trustee. The
Company will pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation for all services rendered by it under this
Indenture (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 reasonable expenses and disbursements of its counsel and of all persons
not regularly in its employ) except any such expense, disbursement or advance as
may be attributable to its negligence, bad faith or willful misconduct. The
Company also covenants to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, bad faith
or willful misconduct on the part of the Trustee and arising out
<PAGE> 57
of or in connection with the acceptance or administration of this trust,
including the reasonable costs and expenses of defending itself against any
claim of liability in connection with the exercise or performance of any of its
powers under this Indenture. The obligations of the Company under this Section
6.06 shall constitute additional indebtedness under this Indenture.
SECTION 6.07. Officers' Certificate as Evidence. Subject to
the provisions of Section 6.01, 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 under this
Indenture, such matter (unless other evidence in respect thereof be herein
specifically prescribed), in the absence of negligence, bad faith or willful
misconduct on the part of the Trustee, may be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee, and such
Officers' Certificate, in the absence of negligence, bad faith or willful
misconduct 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 of such Officers' Certificate.
SECTION 6.08. Eligibility of Trustee. The Trustee under this
Indenture shall at all times be a corporation organized and doing business under
the laws of the United States or any State thereof or of the District of
Columbia (or a corporation or other person permitted to act as Trustee by the
Commission) authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal, State 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 6.08, 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. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.08, the Trustee shall resign immediately in the
manner and with the effect specified in Section 6.09. Neither the Company nor
any person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as Trustee under this Indenture.
SECTION 6.09. Resignation or Removal of Trustee. (a) The
Trustee may resign at any time by giving written notice of such resignation to
the Company, by mailing notice of such resignation to the holders of Registered
Securities at their addresses as they shall appear on the Security Register,
<PAGE> 58
and, if any Bearer Securities are Outstanding, by publishing notice of such
resignation in a newspaper of general circulation, in each place of payment for
such Bearer Securities, customarily published at least once a day for at least
five days in each calendar week.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions
of Section 310(b) of the Trust Indenture Act after written request
therefor by the Company or by any Securityholder who has been a bona
fide holder of a Security or Securities for at least six months, or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.08 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 a 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 by written
instrument, executed by Company Order authorized by the Board of Directors, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor Trustee (with written notice of such removal mailed to the
holders of Registered Securities at their address as they shall appear on the
Security Register, and, if any Bearer Securities are Outstanding, by publishing
notice of such resignation in a newspaper of general circulation, in each place
of payment for such Bearer Securities, customarily published at least once a day
for at least five days in each calendar week), or, subject to the provisions of
Section 5.09, any Securityholder who has been a bona fide holder of a Security
or Securities for at least six months, on behalf of himself and all others
similarly situated, may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(c) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company promptly shall appoint a successor Trustee by a Company
Order authorized by the Board of Directors, one copy of which instrument shall
be delivered to the retiring Trustee and one copy to the
<PAGE> 59
successor Trustee. If, within one year after such resignation, removal or
incapability or the occurrence of such vacancy, a successor Trustee shall be
appointed by the holders of a majority in principal amount of the Securities
(voting as a single class) at the time Outstanding by instrument or instruments
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed, forthwith upon its acceptance of such appointment, shall become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Securityholders and accepted appointment in the manner provided in Section 6.10
within 60 days after notice of the resignation or removal of the Trustee is
mailed to the 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 Security or Securities for
at least six months, subject to the provisions of Section 5.09, on behalf of
himself and all others similarly situated, may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(d) The holders of a majority in aggregate principal amount of
the Securities (voting as a single class) at the time Outstanding at any time,
upon notice to the Trustee, may remove the Trustee.
(e) Any removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 6.09 shall become
effective upon acceptance of appointment by the successor Trustee as provided in
Section 6.10. Any resignation of the Trustee shall become effective only upon
the appointment of a successor Trustee and upon the acceptance of appointment by
the successor Trustee as provided in Section 6.10.
SECTION 6.10. Acceptance by Successor Trustee. Any successor
Trustee appointed as provided in Section 6.09 shall execute, acknowledge and
deliver to the Company and to its predecessor Trustee an instrument accepting
such appointment under this Indenture, and thereupon the resignation or removal
of the predecessor Trustee 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 of its predecessor under this Indenture,
with like effect as if originally named as Trustee in this Indenture; but,
nevertheless, on the written request of the Company or of the successor Trustee,
the Trustee ceasing to act, upon payment of any amounts then due it pursuant to
the provisions of Section 6.06, shall execute and deliver an instrument
transferring to such successor Trustee all the rights and powers of the Trustee
so ceasing to act and
<PAGE> 60
shall transfer, assign and deliver to such successor all property and money held
by such predecessor Trustee under this Indenture. 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 nevertheless shall 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.
No successor Trustee shall accept appointment as provided in
this Section 6.10 unless at the time of such acceptance such successor Trustee
shall be qualified under the provisions of Section 310(b) of the Trust Indenture
Act and eligible under the provisions of Section 6.08.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 6.10, the Company shall mail notice of the succession
of such Trustee under this Indenture to the holders of Registered Securities at
their addresses as they shall appear on the Security Register, and, if any
Bearer Securities are Outstanding, by publishing notice of such resignation in a
newspaper of general circulation, in each place of payment for such Bearer
Securities, customarily published at least once a day for at least five days in
each calendar week. If the Company fails to mail such notice within ten days
after acceptance of appointment by the successor Trustee, the successor Trustee
shall cause such notice to be mailed and, if necessary, published at the expense
of the Company.
SECTION 6.11. 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 the corporate trust business of the
Trustee, shall be the successor Trustee under this Indenture without the
execution or filing of any paper or any further act on the part of any of the
parties to this Indenture provided such corporation shall be qualified under the
provisions of Section 310(b) of the Trust Indenture Act and eligible under the
provisions of Section 6.08.
In case at the time such successor Trustee shall succeed to
the trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any
<PAGE> 61
successor Trustee may authenticate such Securities either in the name of any
predecessor Trustee under this Indenture 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 Securities 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 Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
ARTICLE SEVEN
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 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 such other action), the fact that at the
time of taking any such action the holders of such specified percentage have
joined in such action may be evidenced (i) by any instrument or any number of
instruments of similar tenor executed by Securityholders in person or by agent
or proxy appointed in writing, (ii) by the record of the holders of Securities
voting in favor of such action at any meeting of Securityholders duly called and
held in accordance with the provisions of this Article Seven or (iii) by a
combination of such instrument or instruments and any such record of such a
meeting of Securityholders. The Company may set a record date for purposes of
determining the identity of holders entitled to vote or consent to any action by
vote or consent authorized or permitted under this Indenture, which record date
shall be the later of ten days prior to the first solicitation of such consent
or the date of the most recent list of holders furnished to the Trustee pursuant
to the provisions of Section 312(a) of the Trust Indenture Act prior to such
solicitation. If a record date is fixed, those persons who were holders of
Securities at such record date (or their duly designated proxies), and only
those persons, shall be entitled to take such action by vote or consents or to
revoke any vote or consent previously given, whether or not such persons
continue to be holders after such record date. No such vote or consent shall be
valid or effective if such vote occurs or such consent is obtained more than 120
days after such record date.
SECTION 7.02. Proof of Execution by Securityholders. (a)
Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall be
<PAGE> 62
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.
(b) The ownership of Registered Securities of any series shall
be proved by the Security Register or by a certificate of the Security registrar
of such series.
(c) The principal amount and serial numbers of Bearer
Securities held by any Person, and the date of holding the same, may be proved
by the production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Securities in the amount and with the
serial numbers therein described; or such facts may be proved by the certificate
or affidavit of the Person holding such Bearer Securities, if such certificate
or affidavit is deemed by the Trustee to be satisfactory. The Trustee and the
Company may assume that such ownership of any Bearer Security continues until
(i) another certificate or affidavit bearing a later date issued in respect of
the same Bearer Security is produced, (ii) such Bearer Security is produced to
the Trustee by some other Person, (iii) such Bearer Security is surrendered in
exchange for a Registered Security or (iv) such Bearer Security is no longer
Outstanding. The fact and date of execution of any such instrument or writing,
the authority of the Person executing the same and the principal amount and
serial numbers of Bearer Securities held by the Person so executing such
instrument or writing and the date of holding the same may also be proved in any
other manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section 7.02(c).
(d) The record of any Securityholders' meeting shall be proved
in the manner provided in Section 8.07.
SECTION 7.03. Who Are Deemed Absolute Owners. Prior to due
presentation of a Registered Security for registration of transfer, the Company,
the Trustee, any Paying Agent and any Security registrar may treat the Person in
whose name such Registered Security is registered as owner of such Registered
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 2.09) interest on such Registered Security and for all
other purposes whatsoever, whether or not such Registered Security is overdue
and notwithstanding any notation of ownership or other writing on such
Registered Security made by anyone other than the Company or any Security
registrar, and neither the
<PAGE> 63
Company, the Trustee, any Paying Agent nor any Security registrar shall be
affected by any notice to the contrary. All such payments so made to any such
holder as shown in the Security Register, 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 money payable upon any such Registered Security.
The Company, the Trustee, any Paying Agent and any Security
registrar may treat the bearer of any Bearer Security and the bearer of any
coupon as the absolute owner of such Bearer Security or coupon for the purpose
of receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupon is overdue, and
neither the Company, the Trustee, any Paying Agent nor any Security registrar
shall be affected by any notice to the contrary. All such payments so made to
any such bearer shall be valid and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for money payable upon any such
Bearer Security.
None of the Company, the Trustee, any Paying Agent or the
Security registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 7.04. Company-Owned Securities Disregarded. In
determining whether the holders of the requisite aggregate principal amount of
Securities have concurred in any direction, consent, waiver or other action
under this Indenture, Securities that are owned by the Company or any other
obligor on the 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 Securities shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination; provided, however, that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent, waiver or other action, only Securities
that the Trustee knows are so owned shall be so disregarded.
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 Securities of any or all series specified in
this Indenture in connection with such action, any holder of a Security the
serial number of which is shown by the evidence to be included in the Securities
the holders of which have consented to such action, by filing
<PAGE> 64
written notice with the Trustee at the principal office of the Trustee and upon
proof of holding as provided in Section 7.02, may revoke such action so far as
concerns such Security. Except as provided in this Section 7.05 any such action
taken by the holder of any Security shall be conclusive and binding upon such
holder and upon all future holders and owners of such Security, irrespective of
whether or not any notation in regard thereto is made upon such Security or any
Security issued in exchange or substitution for such Security.
ARTICLE EIGHT
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:
(1) 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 under this Indenture and its consequences, or to
take any other action authorized to be taken by Securityholders
pursuant to any of the provisions of Article Five;
(2) to remove the Trustee and nominate a successor
Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or
indentures supplemental to this Indenture pursuant to the provisions of
Section 9.02; or
(4) to take any other action authorized to be taken
by or on behalf of the holders of any specified aggregate principal
amount of the Securities under any other provision of this Indenture or
under applicable law.
SECTION 8.02. Call of Meetings by Trustee. The Trustee at any
time may 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 City of New York for Registered Securities and the City of London, England
for Bearer Securities, as the Trustee shall determine. Notice of every meeting
of the Securityholders, 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, if any, of Registered Securities of each series affected at
their addresses as they shall appear on the Security Register, and shall be
provided to
<PAGE> 65
holders, if any, of Bearer Securities of each series affected by publication
thereof in a newspaper of general circulation, in each Place of Payment for each
such series, customarily published at least once a day for at least five days in
each calendar week. Such notice to holders of Registered Securities shall be
mailed not fewer than 20 nor more than 90 days prior to the date fixed for the
meeting. Such notice to holders of Bearer Securities shall be made by the
required publication on at least two dates, the first such publication to be not
more than 90 days and the second such publication to be not fewer than 20 days
prior to the date fixed for the meeting.
Any meeting of Securityholders shall be valid without notice
if the holders of all Securities then Outstanding of each series affected are
present in person or by proxy or if notice is waived before or after the meeting
by the holders of all Outstanding Securities of each series affected, and if the
Company and the Trustee are either present by duly authorized representatives
or, before or after the meeting, have waived notice.
SECTION 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company, pursuant to a resolution of its Board of
Directors, or the holders of at least 10% in aggregate principal amount of the
Securities then Outstanding of any or all series, as the case may be, that may
be affected by the action proposed to be taken, shall have requested the Trustee
to call a meeting of Securityholders of any or all series, as the case may be,
that may be so affected, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
mailed or published (as appropriate under Section 8.02) 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 the city designated in
Section 8.02, as the case may be, for such meeting and may call such meeting to
take any action authorized in Section 8.02, by mailing or publishing notice of
such meeting as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting. To be entitled to
vote at any meeting of Securityholders of any series a person shall (i) be a
holder of one or more Securities of such series as set forth in the Security
Register for such series or (ii) be a person appointed by an instrument in
writing as proxy by a holder of one or more Securities of such series, subject
to the provisions of Section 7.02. 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.
<PAGE> 66
SECTION 8.05. Regulations. (a) 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 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.
(b) The Trustee, by an instrument in writing, shall 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, in like
manner shall appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount of the Securities represented at the meeting and entitled to
vote.
(c) Subject to the provisions of Section 7.04, at any meeting
each Securityholder or proxy shall be entitled to one vote for each $1,000
principal amount of Securities.
(d) No vote shall be cast or counted at any meeting in respect
of any Security challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding. The chairman of the meeting shall have no right
to vote other than by virtue of Securities held by him or instruments in writing
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 Section 8.03 may be adjourned from time to time by a majority of those
present and the meeting may be held as so adjourned without further notice.
SECTION 8.06. Quorum. The Persons entitled to vote a majority
in principal amount of the Outstanding Securities affected by the action
proposed to be taken shall constitute a quorum for a meeting of such
Securityholders. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting, if convened at the request of
holders of Securities, shall be dissolved. In the absence of a quorum in any
other case the meeting may be adjourned for a
<PAGE> 67
period of not fewer than ten days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not fewer than ten days as determined by the chairman of the meeting prior to
the adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 8.02, except that such
notice need be given only once not fewer than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities affected by the action
proposed to be taken which shall constitute a quorum.
SECTION 8.07. Voting. The vote upon any resolution submitted
to any meeting of Securityholders shall be by written ballots on which shall be
subscribed the signatures of the holders of Securities or of their
representatives by proxy and the principal amount of the 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 duplicate 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 such
record the original reports of the inspectors of votes on any vote by ballot
taken at such meeting 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
such notice was mailed or published as provided in Section 8.02 or Section 8.03.
The record shall show the principal amount of the 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.
Any record so signed and verified shall be conclusive evidence
of the matters stated in such record.
SECTION 8.08. No Delay of Rights by Meeting. Nothing in this
Article Eight shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Securityholders or any rights expressly or impliedly
conferred under this Article Eight to make such call, any hindrance or delay in
the exercise of any right or rights conferred upon or reserved to the Trustee or
to the Securityholders under any of the provisions of this Indenture or of the
Securities.
<PAGE> 68
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of
Securityholders. The Company, when authorized by the resolutions of the Board of
Directors, and the Trustee from time to time and at any time may enter into an
indenture or indentures supplemental to this Indenture for one or more of the
following purposes:
(a) to evidence the succession of another corporation to the
Company, or successive successions, and the assumptions by the
successor corporation of the covenants, agreements and obligations of
the Company pursuant to Article Ten;
(b) to add to the covenants of the Company such further
covenants, restrictions or conditions for the protection of the holders
of any series of the Securities or coupons as the Board of Directors
and the Trustee shall consider to be for the protection of the holders
of such Securities or coupons, and to make the occurrence, or the
occurrence and continuance, of a default in any such additional
covenants, restrictions or conditions a default or an Event of Default
permitting the enforcement of all or any of the several remedies set
forth in this Indenture; provided, however, that in respect of any such
additional covenant, restriction or condition such supplemental
indenture may provide for notice or 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 in this Indenture or in any supplemental indenture
that may be defective or inconsistent with any other provision
contained in this Indenture or in any supplemental indenture, or to
make such other provisions in regard to matters or questions arising
under this Indenture that shall not adversely affect the interests of
the holders of Outstanding Securities of any series or any related
coupons;
(d) to establish the form or terms of Securities of any series
as permitted by Section 2.01;
(e) to add to, change or eliminate any of the provisions of
this Indenture to provide that Bearer Securities may be registrable as
to principal, to change
<PAGE> 69
or eliminate any restrictions on the payment of principal or any
premium on Registered Securities or of principal or any premium or
interest on Bearer Securities, to permit Bearer Securities to be issued
in exchange for Registered Securities or to permit or facilitate the
issuance of Securities in uncertificated form, provided any such action
shall not adversely affect the interests of the holders of Outstanding
Securities of any series or any related coupons;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture; provided, however, that such action shall not adversely
affect the interests of the holders of Outstanding Securities of any
series;
(g) to provide for the documentation necessary for the
issuance of Securities outside the United States of America;
(h) to provide for the documentation necessary for the
issuance of Securities at an issue price lower than the principal
amount thereof, including to provide that upon the redemption or
acceleration of the Maturity thereof an amount less than the principal
amount thereof shall become due and payable and that such amount shall
be used to determine the relative voting rights of the holders thereof;
or
(i) to conform the Indenture to the provisions of the Trust
Indenture Act as then in effect.
The Trustee hereby is authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations that may be contained in such
supplemental indenture and to accept the conveyance, transfer and assignment of
any property under such supplemental indenture, but the Trustee shall not be
obligated to, but in its discretion may, enter into any such supplemental
indenture that 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 Securities at the time Outstanding,
notwithstanding the provisions of Section 9.02.
<PAGE> 70
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders of a Series. 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 Securities at the time Outstanding of each series affected by such
supplemental indenture or indentures, the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee from time to time and at
any time may enter into an indenture or indentures supplemental to this
Indenture for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the holders of the Securities of each such series;
provided, however, that without the consent of the holder of each Outstanding
Security affected thereby no such supplemental indenture shall: (a) change the
Stated Maturity of the principal of or any premium or any installment of
interest on, any Security, or reduce the principal amount of any Security or any
premium or interest on any Security, or reduce the amount of principal payable
upon acceleration of the Maturity of any Original Issue Discount Security, or
change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest on any Security is payable, or impair the
right to institute suit for the enforcement of any such payment on or after its
Stated Maturity, or make any change in Article Three that adversely affects the
rights of any Securityholder; (b) reduce the percentage in principal amount of
Securities of any Series the consent of whose holders is required for any such
supplemental indenture or the consent of whose holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults under this Indenture and their consequences provided for in this
Indenture; or (c) modify the provisions of Section 5.01 providing for the
rescinding and annulment of a declaration accelerating the Maturity of the
Securities of any series, or any of the provisions of this Section 9.02 or
Section 5.07(b), except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived.
Upon request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Securityholders of
such series 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 in its discretion may, but shall not be
obliged to, enter into such supplemental indenture.
<PAGE> 71
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 Nine shall comply with the Trust Indenture Act as
then in effect. Upon the execution of any supplemental indenture pursuant to the
provisions of this Article Nine, this Indenture shall be and be deemed to be
modified and amended in accordance with such supplemental indenture and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of the series
of Securities affected thereafter shall be determined, exercised and enforced
under this Indenture 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 Securities. Securities authenticated
and delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Nine may bear a notation in form acceptable to the
Trustee as to any matter provided for in such supplemental indenture. If the
Company so shall determine, new Securities of any series and any related coupons
so modified as to conform, in the opinion of the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange, as provided in Section 2.06, for the Outstanding
Securities of such series and any related coupons, upon surrender of such
Outstanding Securities of such series and any related coupons.
SECTION 9.05. Evidence of Compliance of Supplemental Indenture
to Be Furnished Trustee. The Trustee, subject to the provisions of Section 6.01
and Section 6.02, may receive an Officers' Certificate and an Opinion of Counsel
as conclusive evidence that any supplemental indenture executed pursuant to this
Article Nine complies with the requirements of this Article Nine.
<PAGE> 72
ARTICLE TEN
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain
Terms. The Company shall not consolidate with or merge into another corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(1) the corporation formed by such consolidation or
into which the Company is merged or the Person which acquires by
conveyance or transfer or which leases the properties and assets of the
Company substantially as an entirety shall be a corporation organized
and existing under the laws of the United States of America, any State
thereof or the District of Columbia and expressly shall assume, by a
supplemental indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest on the Securities, according
to their terms, and the performance of every covenant of this Indenture
and in such series on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing; and
(3) the Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and
supplemental indenture comply with this Article Ten and that all
conditions precedent provided for in this Indenture relating to such
transaction have been complied with.
SECTION 10.02. Successor Corporation Substituted. Upon any
consolidation by the Company with or merger by the Company into any other
corporation or any conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety in accordance with Section 10.01, the
successor corporation formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor corporation had
been named as the Company in this Indenture, and thereafter, except in the case
of a lease, the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities of each series and any related
coupons.
<PAGE> 73
Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Company prior to such
succession, any of or all the Securities of each series issuable under this
Indenture which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation
instead of upon the Company Order, and subject to all the terms, conditions and
limitations in this Indenture, the Trustee shall authenticate and shall deliver
any Securities that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee on its behalf for that purpose. All the Securities so
issued shall have in all respects the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance with
the terms of this Indenture as though all such Securities had been issued at the
date of the execution of this Indenture.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.01. Applicability of Article. Securities of any
series that are redeemable before their Stated Maturity shall be redeemable only
in accordance with their terms and (except as otherwise specified as
contemplated by Section 2.01 for Securities of any series) in accordance with
this Article Eleven.
SECTION 11.02. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities shall be evidenced by a Company
Order. In case of any redemption at the election of the Company of less than all
the Securities of any series, the Company, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), shall notify the Trustee of such Redemption Date,
of the tenor and terms of the Securities of such series to be redeemed and of
the principal amount of such Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
SECTION 11.03. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of any series
<PAGE> 74
of like tenor and terms specified by the Company are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series and of such tenor and terms not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denominations for such Securities or any integral multiple thereof) of the
principal amount of such Registered Securities or such Bearer Securities or a
denomination larger than the minimum authorized denomination for such Registered
Securities or such Bearer Securities.
The Trustee promptly shall notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 11.04. Notice of Redemption. Notice of redemption
shall be given in the manner provided in Section 8.02 not fewer than 30 or more
than 60 days prior to the Redemption Date. All notices of redemption shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of
any series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular Securities
to be redeemed;
(4) that on the Redemption Date, the Redemption Price
will become due and payable upon each such Security to be redeemed and,
if applicable, that interest thereon will cease to accrue on and after
such date;
(5) the Place or Places of Payment where such
Securities, together in the case of Bearer Securities with all coupons,
if any, appertaining thereto maturing after the Redemption Date, are to
be surrendered for payment of the Redemption Price;
<PAGE> 75
(6) that Bearer Securities may be surrendered for
payment only at such place or places that are outside the United
States, except as provided in Section 4.02; and
(7) that the redemption is for a sinking fund, if
such is the case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 11.05. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 4.04(b)) an amount of money sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be the same
date as the Stated Maturity of an installment of interest thereon) accrued
interest on, all the Securities that are to be redeemed on that date; provided,
however, that deposits with respect to Bearer Securities shall be made with a
Paying Agent or Paying Agents located outside the United States except as
otherwise provided in Section 4.02, unless otherwise specified as contemplated
by Section 2.01.
SECTION 11.06. Securities Payable on Redemption Date. Notice
of redemption having been given as aforesaid, the Securities so to be redeemed
shall become due and payable, on the Redemption Date, at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that: (i) installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only upon presentation and surrender of coupons for such interest (at an
office or agency located outside the United States except as otherwise provided
in Section 4.02); and (ii) installments of interest whose Stated Maturity is on
or prior to the Redemption Date shall be payable to the holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant record date for the payment of such interest
according to the terms of such Securities.
<PAGE> 76
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Bearer Security may be paid after deducting from the Redemption Price an amount
equal to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to hold each
of them and any Paying Agent harmless. If thereafter the holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such holder shall be entitled to receive the amount so deducted on
account of such coupon without interest thereon; provided, however, that
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside of the United
States except as otherwise provided in Section 4.02.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium, until
paid, shall bear interest from the Redemption Date at the rate prescribed
therefor in the Security or related coupon.
SECTION 11.07. Registered Securities Redeemed in Part. Any
Registered Security that is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the holder of such Security without service
charge, a new Registered Security or new Registered Securities of the same
series and of like tenor and terms, of any authorized denomination as requested
by such holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 12.01. Applicability of Article. Subject to Section
3.02(b), the provisions of this Article Twelve shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 2.01 for Securities of such series.
<PAGE> 77
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 12.02. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of the Securities of such series.
SECTION 12.02. Satisfaction of Sinking Fund Payments with
Securities. The Company
(1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and
(2) may apply as a credit Securities of a series that have
been repurchased at the option of a holder or redeemed either at the
election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments
pursuant to the terms of such Securities,
in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the
terms of such Securities as provided for by the terms of such series, provided
that such Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund, and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 12.03. Redemption of Securities for Sinking Fund. Not
fewer than 60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment of that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 12.02 and also will deliver to the Trustee any Securities to be so
delivered. Not fewer than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 11.03 and cause notice of the
redemption thereof to be given in the name of and at
<PAGE> 78
the expense of the Company in the manner provided in Section 11.04. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Section 11.06 and Section 11.07.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.01. Terms Set Forth in the Securities. Securities
of any series which in accordance with their terms are repayable at the option
of the holders thereof before their Stated Maturity shall be repaid in
accordance with the terms set forth in such Securities.
ARTICLE FOURTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 14.01. Discharge of Indenture. When (a) the Company
shall deliver to the Trustee for cancellation all Securities of any series and
any related coupons theretofore authenticated (other than any Securities of such
series and any related coupons that shall have been mutilated, destroyed, lost
or stolen and in lieu of or in substitution for which other Securities or
coupons shall have been authenticated and delivered) and not theretofore
cancelled, or (b) all the Securities of any series and any related coupons not
theretofore cancelled 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 with the Trustee, in trust, funds sufficient to pay upon
Stated Maturity, redemption or repayment at the option of a holder all the
Securities of such series and related coupons (other than any Securities of such
series and related coupons that shall have been mutilated, destroyed, lost or
stolen and that have been replaced or paid as provided in Section 2.07) not
theretofore cancelled or delivered to the Trustee for cancellation, including
principal and any premium and interest due or to become due prior to such Stated
Maturity, Redemption Date or date of repayment, as the case may be, but
excluding, however, the amount of any money for the payment of principal of or
any premium or interest on the Securities
(1) theretofore deposited with the Trustee and repaid by the
Trustee to the Company in accordance with the provisions of Section
14.04 or
<PAGE> 79
(2) paid to any State or the District of Columbia pursuant to
its unclaimed property or similar laws, and if in either case the
Company also shall pay or cause to be paid all other sums payable under
this Indenture by the Company,
then this Indenture shall cease to be of further effect with respect to
Securities of such series and any related coupons, and the Trustee, on demand of
the Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 16.05 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture with respect to Securities of such series and any related coupons. The
obligations of the Company to the Trustee under Section 6.06 shall survive the
termination of this Indenture.
The Trustee shall notify the Securityholders of such series,
at the expense of the Company, of the immediate availability of the amount
referred to in clause (b) of this Section 14.01 by mailing a notice, first class
postage prepaid, to the holders of Registered Securities of such series at their
addresses as they shall appear on the Security Register, and, if any Bearer
Securities are Outstanding, by publishing notice of such resignation in a
newspaper of general circulation, in each place of payment for such Bearer
Securities, customarily published at least once a day for at least five days in
each calendar week.
SECTION 14.02. Deposited Money to Be Held in Trust by Trustee.
Subject to Article Three and to Section 14.04, all money deposited with the
Trustee pursuant to Section 14.01 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, other than as to Bearer Securities, except as
provided in Section 4.02), to the holders of the particular Securities and
related coupons for the payment of which such money has been deposited with the
Trustee, of all sums due and to become due thereon for principal and any premium
and interest.
SECTION 14.03. Paying Agent to Repay Money Held. Upon the
satisfaction and discharge of this Indenture all money then held by any Paying
Agent of the Securities (other than the Trustee), upon demand of the Company,
shall 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 money.
SECTION 14.04. Return of Unclaimed Money. Any money deposited
with or paid to the Trustee or any Paying Agent for payment of the principal of
or any premium or
<PAGE> 80
interest on Securities of any series, or then held by the Company in trust for
the payment of the principal of or any premium or interest on Securities of any
series, and not applied but remaining unclaimed by the holders of Securities of
that series for two years after the date upon which the principal or any premium
or interest on such Securities, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on demand or, if then
held by the Company, shall be discharged from such trust, and all liability of
the Trustee thereupon shall cease; and the holder of any of such Securities
thereafter, as an unsecured general creditor, shall look only to the Company for
payment of such Securities, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, thereupon shall cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, at the
expense of the Company, in the case of Registered Securities or Bearer
Securities, may cause to be published once, in a newspaper of general
circulation in each Place of Payment for such series customarily published on
each Business Day (whether or not published on Saturdays, Sundays or holidays)
or, in the case of Registered Securities, to be mailed to each such holder, or
in the case of Registered Securities to be mailed and published, notice that
such money remains unclaimed and that, after a date specified in such notice,
which shall not be fewer than 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.
SECTION 14.05. Deposits Irrevocable. Any deposit referred to
in Section 14.01 shall be irrevocable. If any Securities of a series with
respect to which a deposit has been made pursuant to Section 14.01 and at the
time Outstanding are to be redeemed prior to their Stated Maturity, whether
pursuant to any optional redemption provisions or in accordance with any
mandatory sinking fund requirement, the Company shall make such arrangements as
are satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
SECTION 14.06. Reinstatement. If the Trustee is unable to
apply any money or U.S. Government Obligations in accordance with Section 14.01
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 14.01 until such time as the Trustee is permitted to apply
all such money or U.S. Government Obligations in accordance with Section 14.01.
<PAGE> 81
ARTICLE FIFTEEN
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 15.01. Indenture and Securities Solely Corporate
Obligations. No recourse for the payment of the principal of or any premium or
interest on any Security, or for any claim based on any Security or coupon or
otherwise in respect of any Security or coupon, and no recourse under or upon
any obligation, covenant or agreement of the Company in this Indenture or in any
Security, or because of the creation of any indebtedness represented by any
Security or coupon, shall be had against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, 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 Securities and coupons.
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 16.01. Provisions Binding on Company's Successors. All
the covenants, stipulations, promises and agreements contained in this Indenture
by the Company shall bind its successors and assigns whether so expressed or
not.
SECTION 16.02. Official Acts by Successor Corporation. Any act
or proceeding by any provisions 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 or officer of any corporation that shall at the time be the lawful
sole successor of the Company.
SECTION 16.03. Addresses for Notices, etc. Any notice or
demand that by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the holders of 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) to Texas Industries, Inc., 1341 West
Mockingbird Lane, Dallas, Texas 75247-6913 Attention: General Counsel. Any
notice, direction, request or demand by any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently
<PAGE> 82
given or made, for all purposes, if given or made in writing at the principal
office of the Trustee, Attention: Corporate Trust Administration.
SECTION 16.04. GOVERNING LAW. THIS INDENTURE AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK,
AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
SECTION 16.05. Evidence of Compliance with Conditions
Precedent. Upon any application or request 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 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 (other than certificates provided pursuant to
Section 4.04, which certificates shall comply with the requirements of Section
4.04) shall include: (i) a statement that the person making such certificate or
opinion has read such covenant or condition; (ii) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinion contained in such certificate or opinion are based; (iii) 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 (iv) a
statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
The provisions of this Section 16.05 are in furtherance of and
subject to Sections 314(c)(1), 314(c)(2) and 314(e) of the Trust Indenture Act.
SECTION 16.06. Legal Holidays. Unless otherwise specified in
the manner contemplated by Section 2.01, in any case where the Stated Maturity
of principal of or any premium or interest on the Securities will not be a
Business Day, payment of such principal, premium or interest need not be made on
such date but may be made on the next following Business Day with the same force
and effect as if made on the Stated Maturity and, if such principal, premium or
interest is duly paid on such next following Business Day, no interest
<PAGE> 83
shall accrue for the period from and after such Stated Maturity to such next
following Business Day.
SECTION 16.07. Trust Indenture Act to Control. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
another provision hereof which is required to be included in this Indenture by
any provision of the Trust Indenture Act, such required provision shall control.
SECTION 16.08. No Security Interest Created. Nothing in this
Indenture or in the Securities or coupons, expressed or implied, shall be
construed to constitute a security interest under the Uniform Commercial Code or
similar legislation, as now or hereafter enacted and in effect, in any
jurisdiction where property of the Company or its Subsidiaries is located.
SECTION 16.09. Benefits of Indenture. Nothing in this
Indenture or in the Securities or coupons, express or implied, shall give to any
Person, other than the parties to this Indenture, any Paying Agent, any Security
registrar and their successors under this Indenture, the holders of Securities
or coupons and, to the extent provided in this Indenture, the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 16.10. Payments to Be Made in U.S. Dollars.
Notwithstanding anything in this Indenture to the contrary, any payments on or
relating to any Security or related coupon shall be made only in U.S. dollars.
SECTION 16.11. 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 of this Indenture.
SECTION 16.12. 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> 84
[NAME OF TRUSTEE] hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions set forth above in this
Indenture.
IN WITNESS WHEREOF, TEXAS INDUSTRIES, INC. has caused this
Indenture to be signed and acknowledged by its President, and its corporate seal
to be affixed hereunto, and the same to be attested by its Secretary, and [NAME
OF TRUSTEE] has caused this Indenture to be signed and acknowledged by
____________, and has caused its corporate seal to be affixed hereunto and the
same to be attested by ____________, as of the day and year first written above.
TEXAS INDUSTRIES, INC.
By
------------------------------------
[Name]
[Title]
[SEAL]
Attest:
- --------------------------------
Secretary
[NAME OF TRUSTEE]
By
------------------------------------
[Name]
[Title]
[SEAL]
Attest:
- --------------------------------
Title:
<PAGE> 1
EXHIBIT 4.10
TEXAS INDUSTRIES, INC.
AND
[NAME OF WARRANT AGENT], WARRANT AGENT
_______________________
WARRANT AGREEMENT [DEBT SECURITIES]
DATED AS OF___________
<PAGE> 2
WARRANT AGREEMENT dated as of_________, 19___ , between TEXAS
INDUSTRIES, INC., a Delaware corporation (the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to),
and__________, as warrant agent (the "Warrant Agent", which term includes any
successor warrant agent hereunder).
WHEREAS the Company has entered into an Indenture dated as of
_____________, 19__ (the "Indenture"), with _________________, a ____________
corporation, as Trustee (the "Trustee", which term includes any successor
trustee under the Indenture), providing for the issuance from time to time of
the Company's debt securities, to be issued in one or more series as provided
in the Indenture;
[WHEREAS the Company proposes to sell] [title of debt securities being
offered] (the "Offered Securities") with] [WHEREAS the Company proposes to
issue] Warrant certificates evidencing one or more warrants (the "Warrants";
individually a "Warrant") representing the right to purchase up to an aggregate
principal amount of [$_____________] of Debt Securities, which are to be issued
under the Indenture (the "Warrant Securities"), such warrant certificates and
other warrant certificates issued pursuant to this Agreement being called the
"Warrant Certificates"; and
WHEREAS the Company desires that the Warrant Agent act on behalf of
the Company in connection with the issuance, exchange, exercise and replacement
of the Warrant Certificates, and in this Agreement wish to set forth, among
other things, the form and provisions of the Warrant Certificates and the terms
and conditions on which they may be issued, exchanged, exercised and replaced.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE 1.
ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES
SECTION 1.01. ISSUANCE OF WARRANTS. [Warrants shall be initially
issued in connection with the issuance of the Offered Securities] [but shall be
separately transferable on and after _______, 19___ (the "Detachable Date")]
[and shall not be separately transferable] [and each] [Each] Warrant
Certificate shall evidence ________ Warrants. Each Warrant evidenced by a
Warrant Certificate shall represent the right, subject to the provisions
contained herein and therein, to purchase a Warrant Security in the principal
amount of [$____________].
SECTION 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES.
Warrant Certificates, whenever issued, shall be in [bearer] [or] [registered]
form [or both] substantially in the form set forth in Annex A hereto, shall be
dated and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing
<PAGE> 3
the same may approve (execution thereof to be conclusive evidence of such
approval) and as are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any securities exchange on
which the Warrants may be listed, or to conform to common usage. The Warrant
Certificates shall be signed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, its Chief Operating Officer,
its Chief Financial Officer, one of its Vice Presidents (whether or not
designated by a number or word or words added before or after the title Vice
President), its Treasurer or an Assistant Treasurer under its corporate seal
and attested by its Secretary or one of its Assistant Secretaries. Such
signatures may be manual or facsimile signatures of such authorized officers
and may be imprinted or otherwise reproduced on the Warrant Certificates. The
seal of the Company may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant evidenced thereby
has been countersigned by the manual signature of the Warrant Agent. Such
signature by the Warrant Agent upon any Warrant Certificate executed by the
Company shall be conclusive evidence that the Warrant Certificate so
countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the
Warrant Agent, such Warrant Certificates may be countersigned and delivered
notwithstanding that the person who signed such Warrant Certificates ceased to
be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by such persons as, at the actual date of the execution
of such Warrant Certificate, shall be the proper officers of the Company,
although at the date of the execution of this Agreement any such person was not
such officer.
[IF BEARER WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean [IF OFFERED DEBT SECURITIES WITH
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date,
the registered owner of the Offered Security to which such Warrant Certificate
was initially attached (or the bearer if the Offered Securities is in bearer
form) and after such Detachable Date] the bearer of such Warrant Certificate.]
[IF REGISTERED WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose. IF OFFERED SECURITIES WITH WARRANTS WHICH ARE
NOT IMMEDIATELY DETACHABLE--or, prior to the Detachable Date, upon the register
of the Offered Securities.] The Company will, or will cause the registrar of
the Offered Securities to, make available at all times to the Warrant Agent
such information as to holders of the Offered Securities with Warrants as may
be necessary to keep the Warrant Agent's records up-to-date.
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<PAGE> 4
SECTION 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant
Certificates evidencing the right to purchase an aggregate principal amount not
exceeding [$_______] aggregate principal amount of Warrant Securities (except
as provided in Section 2.03(c), 3.02 and 4.01) may be executed by the Company
and delivered to the Warrant Agent upon the execution of this Agreement or from
time to time thereafter. The Warrant Agent shall, upon receipt of Warrant
Certificates duly executed on behalf of the Company and upon order of the
Company, countersign Warrant Certificates evidencing Warrants representing the
right to purchase up to [$____] aggregate principal amount of Warrant
Securities and shall deliver such Warrant Certificates to or upon the order of
the Company. Subsequent to such original issuance of the Warrant Certificates,
the Warrant Agent shall countersign a Warrant Certificate only if the Warrant
Certificate is issued in exchange or substitution for one or more previously
countersigned Warrant Certificates [IF REGISTERED WARRANTS--or in connection
with their transfer] as hereinafter provided, or as provided in Section
2.03(c).
ARTICLE II.
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. WARRANT PRICE. During the period from and including
___________, 19__, to and including ____________, 19__, the exercise price of
each Warrant will be [___% of the principal amount of the Warrant Securities]
[$_____] plus [accrued amortization of the original issue discount] [accrued
interest] from the most recently preceding ________. [During the period from
________, 19__, to and including ________, 19__, the exercise price of each
Warrant will be [___% of the principal amount of the Warrant Securities]
[$_____] plus [accrued amortization of the original issue discount] [accrued
interest] from the most recently preceding ___________. [In each case, the
original issue discount will be amortized at a ___% annual rate, computed on an
annual basis using a 360-day year consisting of twelve 30-day months.] Such
purchase price of Warrant Securities is referred to in this Agreement as the
"Warrant Price". [The original issue discount for each [$____] principal
amount of Warrant Securities is [$_________].]
SECTION 2.02. DURATION OF WARRANTS. Each Warrant may be exercised
in whole at any time, as specified herein, on or after [the date thereof]
[__________, 19__ and at or before 5:00 p.m. New York City time on ________,
19__ or such later date as may be selected by the Company, in a written
statement to the Warrant Agent and with notice to the holders of Warrants (such
date of expiration being called the "Expiration Date"). Each Warrant not
exercised at or before 5:00 p.m. New York City time on the Expiration Date
shall become void and all rights of the holder of the Warrant Certificate
evidencing such Warrant under this Agreement shall cease.
SECTION 2.03. EXERCISE OF WARRANTS.
(a) During the period specified in Section 2.02, any
whole number of Warrants may be exercised [, subject to Section 2.03(c),] by
delivery to the Warrant Agent of the Warrant Certificate evidencing such
Warrant, with the form of election to purchase Warrant
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<PAGE> 5
Securities set forth on the reverse side of the Warrant Certificate properly
completed and duly executed, and by paying in full, [in lawful money of the
United States of America,] [in the foreign currency or currency unit in which
the Warrant Securities are denominated] [by bank wire transfer] in immediately
available funds the Warrant Price for each Warrant exercised to the principal
corporate trust office of the Warrant Agent [or at _____]. The date on which
the duly completed and executed Warrant Certificate and payment in full of the
Warrant Price is received by the Warrant Agent shall be deemed to be the date
on which the Warrant is exercised. The Warrant Agent shall deposit all funds
received by it in payment of the Warrant Price in an account of the Company
maintained with it and shall advise the Company by telephone at the end of each
day on which a payment or wire transfer for the exercise of Warrants is
received of the amount so deposited to its account. The Warrant Agent shall
promptly confirm such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as
promptly as practicable, advise the Company and the Trustee of (i) the number
of Warrants exercised, (ii) the instructions of each holder of the Warrant
Certificates evidencing such Warrants with respect to delivery of the Warrant
Securities to which such holder is entitled upon such exercise, (iii) delivery
of Warrant Certificates evidencing the balance, if any, of the Warrants
remaining after such exercise and (iv) such other information as the Company or
the Trustee shall reasonably require.
(c) As soon as practicable after the exercise of any
Warrant, the Company shall issue, pursuant to the Indenture, in authorized
denomination to or upon the order of the holder of the Warrant Certificate
evidencing such Warrant, the Warrant Securities to which such holder is
entitled, [in fully registered form, registered in such name or names] [in
bearer form,]as may be directed by such holder [; PROVIDED, HOWEVER, that the
Company shall deliver Warrant Securities in bearer form only outside the United
States of America(including the states and District of Columbia) and its
possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island, and Northern Mariana Islands) and only upon delivery from
the person entitled to physical delivery of such Warrant Securities of an
executed certification substantially in the form of Annex B hereto]. If fewer
than all of the Warrants evidenced by such Warrant Certificate are exercised,
the Company shall execute (attested and under seal as aforesaid), and an
authorized officer of the Warrant Agent shall manually countersign and deliver,
a new Warrant Certificate evidencing the number of such Warrants remaining
unexercised, unless sufficient time does not exist before the Expiration Date
to exercise such Warrants in accordance with the provisions of this Agreement.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issuance of the Warrant Securities and the Company
shall not be required to issue or deliver any Warrant Security until such tax
or other charge shall have been paid or it shall have been established to the
satisfaction of the Company that no such tax or other charge is due.
4
<PAGE> 6
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.01. NO RIGHTS AS A HOLDER OF WARRANT SECURITIES
CONFERRED BY WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or
Warrant evidenced thereby shall entitle the holder thereof to any of the rights
of a holder of Warrant Securities, including without limitation the right to
receive the payment of principal of or premium, if any, or interest, if any, on
Warrant Securities or to enforce any of the covenants in the Indenture except
to the extent that in connection with any modification of the Indenture
pursuant to the provisions of Section _________ thereof a holder of any
unexpired Warrant shall be deemed to be the holder of the principal amount of
Warrant Securities issuable upon exercise of such Warrant.
SECTION 3.02. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES.
Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it and the Company and,
in the case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide purchaser
or holder in due course, the Company may (or, in the case of mutilation, shall)
execute, and in such event an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate
of the same tenor and evidencing a like number of Warrants. Upon the issuance
of any new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Warrant Agent) in connection therewith. Every substitute
Warrant Certificate executed and delivered pursuant to this Section in lieu of
any lost, stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the lost, stolen or
destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. The provisions of this Section are exclusive and shall preclude (to
the extent lawful) any and all other rights or remedies notwithstanding any law
or statute existing or hereinafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
SECTION 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a
Warrant Certificate, without the consent of the Warrant Agent, the Trustee, the
holder of any Warrant Securities or the holder of any other Warrant
Certificate, may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce or otherwise in respect of, his right to exercise the
Warrants
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<PAGE> 7
evidenced by his Warrant Certificate in the manner provided in his Warrant
Certificate and in this Agreement.
[If Warrant Securities are exchangeable or convertible-- SECTION 3.04.
CONVERSION OR EXCHANGE. The Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized [title of
security], the full number of shares of such [title of security] then issuable
upon exchange or conversion of all Warrant Securities.]
ARTICLE IV.
EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES
SECTION 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [IF
OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS
ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--Upon] [IF OFFERED SECURITIES WITH
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date a
Warrant Certificate may be exchanged or transferred only together with the
Offered Securities to which the Warrant Certificate was initially attached, and
only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. Prior to the Detachable Date, each transfer
of the Offered Security [on the register maintained with respect to the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date, upon] surrender at the principal corporate trust
office of the Warrant Agent [or __________], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants [IF REGISTERED WARRANTS--or the transfer may be
registered in whole or in part]; provided that such other Warrant Certificates
evidence a like number of Warrants as the Warrant Certificates so surrendered.
[IF REGISTERED AND BEARER WARRANTS (SUBJECT TO ANY LIMITATIONS IMPOSED WITH
RESPECT TO SUCH EXCHANGES)--After the Detachable Date, upon] [Upon] surrender
at the principal corporate trust office of the Warrant Agent [or __________],
Warrant Certificates in bearer form may be exchanged for Warrant Certificates
in registered form evidencing a like number of Warrants.] [IF REGISTERED
WARRANTS-- The Warrant Agent shall keep, at its corporate trust office, books
in which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and exchanges and transfers of outstanding
Warrant Certificates upon surrender of the Warrant Certificates to the Warrant
Agent at its principal corporate trust office [or_____] for exchange [or
registration of transfer], properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to the Company and the Warrant Agent.] The Company may
require payment of a service charge for any exchange [or registration of
transfer] of Warrant Certificates, and may require payment of a sum sufficient
to cover any stamp or other tax or other governmental charge that may be
imposed in connection with any such exchange [or registration of transfer].
Whenever any Warrant Certificates are so surrendered for exchange [or
registration of transfer] an authorized officer of the Warrant Agent shall
manually countersign and deliver to the person or persons entitled thereto a
Warrant
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<PAGE> 8
Certificate or Warrant Certificates duly authorized and executed by the
Company, as so requested. The Warrant Agent shall not be required to effect
any exchange [or registration of transfer] which will result in the issuance of
a Warrant Certificate evidencing a fraction of a Warrant or a number of full
Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange [or registration of transfer] of Warrant Certificates shall be the
valid obligations of the Company, evidencing the same obligations, and entitled
to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such exchange [or registration or transfer].
SECTION 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. [IF
OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--
Subject to Section 4.01, each] [IF OFFERED SECURITIES WITH BEARER WARRANTS
WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ISSUED INDEPENDENT OF ANY OFFERED
SECURITIES--Each] Warrant Certificate shall be transferable by delivery and
shall be deemed negotiable and the bearer of each Warrant Certificate may be
treated by the Company, the Warrant Agent and all other persons dealing with
such bearer as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding.] [IF REGISTERED WARRANTS-- Every
holder of a Warrant Certificate, by accepting the same, consents and agrees
with the Company, the Warrant Agent and with every subsequent holder of such
Warrant Certificate that until the transfer of the Warrant Certificate is
registered on the books of the Warrant Agent [or the register of the Offered
Securities prior to the Detachable Date], the Company and the Warrant Agent [or
the registrar of the Offered Securities prior to the Detachable Date], may
treat such registered holder as the absolute owner thereof for any purpose and
as the person entitled to exercise the rights represented by the Warrants
evidenced thereby, any notice to contrary notwithstanding.]
SECTION 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange [, registration of transfer] or exercise
of the Warrants evidenced thereby, if surrendered to the Company, shall be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly canceled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
no Warrant Certificate shall be issued hereunder in exchange or in lieu
thereof. The Warrant Agent shall deliver to the Company from time to time or
otherwise dispose of canceled Warrant Certificates in a manner satisfactory to
the Company.
ARTICLE V.
CONCERNING THE WARRANT AGENT
SECTION 5.01. WARRANT AGENT. The Company hereby appoints the
Warrant Agent as warrant agent of the Company in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein
set forth and the Warrant Agent hereby accepts such appointment. The Warrant
Agent shall have the powers and authority granted to and conferred upon it in
the Warrant Certificates and hereby and such further powers
7
<PAGE> 9
and authority to act on behalf of the Company as the Company may hereafter
grant to or confer upon it in writing. All of the terms and provisions with
respect to such powers and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
SECTION 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agree
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel
fees)incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim of
such liability.
(b) AGENT FOR THE COMPANY. In acting under this
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any fiduciary
obligation or relationship of agency or trust for or with any of the holders of
Warrant Certificates or beneficial owners of Warrants.
(c) DOCUMENTS. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.
(d) CERTAIN TRANSACTIONS. The Warrant Agent, and its
officers, directors and employees, may become the owner of, or acquire any
interest in, Warrants and/or Warrant Securities and/or Offered Securities, with
the same rights that it or they would have if it were not the Warrant Agent
hereunder, and, to the extent permitted by applicable law, it or they may
engage or be interested in any financial or other transaction with the Company
and may act on, or as depositary, trustee or agent for, any committee or body
of holders of Warrant Securities, Offered Securities or other obligations of
the Company as freely as if it were not the Warrant Agent hereunder. Nothing
in this Agreement shall be deemed to prevent the Warrant Agent from acting as
Trustee under the Indenture or as trustee under any other indenture with the
Company.
(e) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall
have no liability with respect to any invalidity of this Agreement or any of
the Warrant Certificates.
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<PAGE> 10
(f) NO LIABILITY FOR INTEREST. The Warrant Agent shall
transfer to the Company interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.
(g) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant
Agent shall not be responsible for any of the recitals or representations
herein or in the Warrant Certificates (except as to the Warrant Agent's
countersignature thereon), all of which are made solely by the Company.
(h) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligation to take any action
hereunder which might involve it in any expense or liability, the payment of
which within a reasonable time is not, in its reasonable opinion, assured to
it. The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant Certificates
countersigned and delivered by it to the Company pursuant to this Agreement or
for the application by the Company of the proceeds of the Warrant Certificates.
The Warrant Agent shall have no duty or responsibility in case of any default
by the Company in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at law or
otherwise, or, except as provided in Section 6.02 hereof, to make any demand
upon the Company.
SECTION 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR.
(a) The Company agrees, for the benefit of the holders
from time to time of the Warrant Certificates, that there shall at all times be
a Warrant Agent hereunder until all the Warrant Certificates are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
PROVIDED that such date shall not be less than three months after the date on
which such notice is given unless the Company otherwise agree. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date upon which such removal shall become effective. Such
resignation or removal shall take effect upon the appointment by the Company,
as hereinafter provided, of a successor Warrant Agent (which shall be a bank or
trust company authorized under the laws of the jurisdiction of its organization
to exercise corporate trust powers) and the acceptance of such appointment by
such successor Warrant Agent. The obligations of the Company under Section
5.02(a) shall continue to the extent set forth therein notwithstanding the
resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign,
or shall be removed, or shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or shall file a
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<PAGE> 11
petition seeking relief under the Federal Bankruptcy Code, as now constituted
or hereafter amended, or under any other applicable Federal or state bankruptcy
law or similar law or make an assignment for the benefit of its creditors or
consent to the appointment of a receiver or custodian of all or any substantial
part of its property, or shall admit in writing its inability to pay or meet
its debts as they mature, or if a receiver or custodian of it or of all or any
substantial part of its property shall be appointed, or if an order of any
court shall be entered for relief against it under the provisions of the
Federal Bankruptcy Code, as now constituted or hereafter amended, or under any
other applicable Federal or state bankruptcy or similar law, or if any public
officer shall have taken charge or control of the Warrant Agent or of its
property or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Warrant Agent, qualified as aforesaid, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent
and acceptance by the successor Warrant Agent of such appointment, the Warrant
Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
to transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent
hereunder may be merged or converted or any corporation with which the Warrant
Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent, provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01. AMENDMENT. This Agreement may be amended by the
parties hereto, without the consent of the holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; PROVIDED
that such action shall not adversely affect the interests of the holders of the
Warrant Certificates.
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<PAGE> 12
SECTION 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT.
If the Warrant Agent shall receive any notice or demand addressed to the
Company by the holder of a Warrant Certificate pursuant to the provisions of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.
SECTION 6.03. ADDRESSES. Any communications from the Company to
the Warrant Agent with respect to this Agreement shall be addressed to the
Warrant Agent at its principal corporate trust office at
______________________, _________________________, Attention:
_________________________, and any communication from the Warrant Agent to the
Company with respect to this Agreement shall be addressed to Texas Industries,
Inc., 1341 West Mockingbird Lane, Dallas, Texas 75247, Attention: General
Counsel, or such other address as shall be specified in writing by the Warrant
Agent or the Company.
SECTION 6.04. NOTICES TO HOLDERS OF WARRANTS. Any notice to
holders of Warrants which by any provisions of this Agreement is required or
permitted to be given shall be given [IF REGISTERED WARRANTS--by first class
mail, postage prepaid, at such holder's address as appears on the books of the
Warrant Agent [or on the register of the Offered Securities prior to the
Detachable Date] [IF BEARER WARRANTS--by publication at least once in a daily
morning newspaper in New York City [, in London] and in ________].
SECTION 6.05. APPLICABLE LAW. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the substantive laws of the State of New York
without regard to any conflict of laws provisions.
SECTION 6.06. DELIVERY OF PROSPECTUS. The Company will furnish to
the Warrant Agent sufficient copies of a prospectus with an accompanying
prospectus supplement relating to the Warrant Securities, and the Warrant Agent
agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to
the holder of the Warrant Certificate evidencing such Warrant prior to or
concurrently with the delivery of the Warrant Securities issued upon such
exercise, a copy of such prospectus and prospectus supplement.
SECTION 6.07. OBTAINING OF GOVERNMENTAL APPROVALS. The Company
will from time to time take all action which may be necessary to obtain and
keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under United States
Federal and state laws and any applicable laws of other jurisdictions
(including without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933) which may be
or become required in connection with the issuance, sale, transfer and delivery
of the Warrant Certificates, the exercise of the Warrants, the issuance, sale,
transfer and delivery of the Warrant Securities issued upon exercise of the
Warrants or upon the expiration of the period during which the Warrants are
exercisable.
SECTION 6.08. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT.
Nothing in this Agreement shall give to any person other than the Company,
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<PAGE> 13
the Warrant Agent and the holders of the Warrant Certificates any right, remedy
or claim under or by reason of this Agreement.
SECTION 6.09. HEADINGS. The descriptive headings of the several
Articles or Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 6.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
SECTION 6.11. INSPECTION OF AGREEMENT. A copy of this Agreement
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent and the Company for inspection by the holder of any
Warrant Certificate. The Warrant Agent or the Company may require such holder
to submit his Warrant Certificate for inspection by it.
SECTION 6.12. PAYMENT OF STAMP AND OTHER DUTIES. The Company will
pay all stamp and other duties, if any, to which, under the laws of the United
States of America, the original issuance of the Warrant Certificates may be
subject.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by one of their respective authorized officers as of the day and year
first above written.
TEXAS INDUSTRIES, INC.
By ______________________________________
Name:
Title:
Title:
[NAME OF WARRANT AGENT]
By ______________________________________
Name:
Title:
12
<PAGE> 14
ANNEX A to Warrant Agreement
[FORM OF WARRANT CERTIFICATE]
[FACE OF WARRANT CERTIFICATE]
[FORM OF LEGEND IF SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE: Prior to ______, 19___ this Warrant Certificate cannot be
transferred or exchanged unless attached to a [Title of Offered Securities].]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT AS PROVIDED HEREIN
WARRANTS TO PURCHASE [DEBT SECURITIES]
Issued by TEXAS INDUSTRIES, INC.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON ____, 19___
[No.]___________________________________________________________ Warrants
This certifies that [the bearer is the] [_____ or registered assigns
is the registered] owner of the above indicated number of Warrants, each
Warrant entitling such [bearer] [registered owner] to purchase, at any time
[after 5:00 p.m. New York City time on _____________, 19__ and] at or before
5:00 p.m. New York City time on _____________, 19__ (or such later date as may
be selected by Texas Industries, Inc., a Delaware corporation (the "Company")
with notice to the holder hereof as provided in the Warrant Agreement (as
hereinafter defined)), [$____] principal amount of [Title of Warrant
Securities] (the "Warrant Securities") of the Company, to be issued under the
Indenture (as hereinafter defined), on the following basis: during the period
from and including _____________, 19___, the exercise price of each Warrant
will be [_____% of the principal amount of the Warrant Securities] [$______]
plus [accrued amortization of the original issue discount] [accrued interest]
from the most recently preceding __________; during the period from
____________________, 19___, to and including ____________________, 19___, the
exercise price of each Warrant will be [___% of the principal amount of the
Warrant Securities] [$______] plus [accrued amortization of the original issue
discount] [accrued interest] from the most recently preceding __________ [, in
each case, the original issue discount will be amortized at a __% annual rate,
computed on an annual basis, using a 360-day year consisting of twelve 30-day
months) (the "Warrant Price"). [The original issue discount for each [$1,000]
principal amount of Warrant Securities is [$__________] The holder may exercise
the Warrants evidenced hereby by delivery to the Warrant Agent (as hereinafter
defined) of this Warrant Certificate, with the form of election to purchase on
the reverse hereof properly completed and duly executed and by paying in full,
[in lawful money of the United States of America] [in the foreign currency or
currency unit in which the Warrant Securities are denominated] by bank wire
transfer in immediately available funds the Warrant Price for each Warrant
exercised to the warrant agent, such delivery and payment to be made at the
principal corporate trust office of [name of Warrant Agent], or its successor
as warrant agent (the "Warrant Agent"), [or_____]
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<PAGE> 15
currently at the address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities (in registered form in
denominations of [$_____] and any integral multiples thereof) (in bearer form
in the denomination of [$_____] [or both]). Upon any exercise of fewer than
all of the Warrants evidenced by this Warrant Certificate, there shall be
issued to the holder hereof a new Warrant Certificate evidencing the number of
Warrants remaining unexercised, unless sufficient time does not exist to
exercise such Warrants in accordance with the provisions of the Warrant
Agreement before the Warrants become void.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ________, 19__ (the "Warrant Agreement") between
the Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of
the Warrant Agreement are on file at the principal corporate trust office of
the Warrant Agent specified on the reverse hereof [and at __________].
The Warrant Securities to be issued and delivered upon the exercise of
the Warrants evidenced by this Warrant Certificate will be issued under and in
accordance with an Indenture dated as of __________, 19__ (the "Indenture"),
between the Company and ___________, as Trustee (such Trustee and any successor
to such Trustee being hereinafter referred to as the "Trustee"), and will be
subject to the terms and provisions contained in the Indenture. Copies of the
Indenture and the form of the Warrant Securities are on file at the principal
corporate trust office of the Trustee in New York City [and at
__________________________________________________________].
[IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Prior to _________, 19__, this Warrant Certificate may be exchanged
or transferred only together with the [Title of Offered Securities] (the
"Offered Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Securities. After such date, this] [IF OFFERED
SECURITIES WITH BEARER WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS
ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--This] Warrant Certificate may be
registered when this Warrant Certificate is surrendered at the principal
corporate trust office of the Warrant Agent [or ______] by the registered owner
or his assigns, in person or by his attorney duly authorized in writing, in the
manner and subject to the limitations provided in the Warrant Agreement.]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Except as provided in the immediately preceding paragraph, after]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--After] countersignature
by the Warrant Agent and prior to the expiration of this Warrant Certificate,
this Warrant Certificate may be exchanged at the principal corporate trust
14
<PAGE> 16
office of the Warrant Agent [or _________] for Warrant Certificates,
representing the same aggregate number of Warrants, [in registered form] [in
bearer form] [in either registered or bearer form].
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including without limitation
the right to receive payments of principal, of premium, if any, or interest, if
any, on the Warrant Securities or to enforce any of the covenants of the
Indenture, except to the extent that in connection with any modification of the
Indenture pursuant to the provisions of Section 11.02 thereof a holder of any
unexpired Warrant shall be deemed to be the holder of the principal amount of
Warrant Securities issuable upon exercise of such Warrant.
This Warrant Certificate shall be governed by, and construed in
accordance with the laws of the State of New York without regard to any
conflict of laws provisions.
The Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
Dated as of _______________, 19__.
TEXAS INDUSTRIES, INC.
By ______________________________________
Name:
Title:
[SEAL]
Attest:
_____________________________________________________________________
[Assistant] Secretary
By ______________________________________
Name:
Title:
[SEAL]
Attest:
_____________________________________________________________________
[Assistant] Secretary
[NAME OF WARRANT AGENT], As Warrant Agent
By _______________________________
15
<PAGE> 17
Name:
Title:
16
<PAGE> 18
(REVERSE OF WARRANT CERTIFICATE)
INSTRUCTIONS FOR EXERCISE OF WARRANT
To exercise the Warrants evidenced hereby, the holder must pay by bank
wire transfer in immediately available funds the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent], at its principal
corporate trust office at [insert address of Warrant Agent], Attention:
______________, [or ______________________________] which wire transfer must
specify the name of the holder and the number of Warrants exercised by such
holder. In addition, the holder must complete the information required below
and present this Warrant Certificate in person or by mail (registered mail is
recommended) to the Warrant Agent at the addresses set forth below. This
Warrant Certificate, completed and duly executed, must be received by the
Warrant Agent together with such wire transfer. [If the undersigned is
requesting delivery of Warrant Securities in bearer form, the person entitled
to physical delivery of such Warrant Securities will be required to deliver a
certificate (copies of which may be obtained from the Warrant Agent [or
_____________]) certifying that such Warrant Securities are not being acquired
by or on behalf of a U.S. person or for resale to a U.S. person unless such
U.S. person is qualified under United States tax laws and regulations.]
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise ________
Warrants, evidenced by this Warrant Certificate, to purchase [$____] principal
amount of the [Title of Warrant Securities] (the "Warrant Securities") of Texas
Industries, Inc. and represents that he has tendered payment for such Warrant
Securities by bank wire transfer in immediately available funds to the order of
Texas Industries, Inc., in care of (insert name and address of Warrant Agent),
in the amount of [$_____] in accordance with the terms hereof. The undersigned
requests that said principal amount of Warrant Securities be in [bearer form in
the authorized denominations] [fully registered form in the authorized
denominations, registered in such names and delivered], all as specified in
accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below or unless
sufficient time does not exist before the remaining Warrants become void.
Dated: ___________________________________
Name ________________________________
(Please Print)
___________________________________Address______________________________
(Insert Social Security or Other Identifying Number of Holder)
_____________________________________
17
<PAGE> 19
Signature ___________________________
18
<PAGE> 20
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at
________________________________________________________________________
________________________________________________________________________
_______________________________
By mail at
________________________________________________________________________
________________________________________________________________________
_______________________________
19
<PAGE> 21
[IF REGISTERED WARRANT]
ASSIGNMENT
(FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES TO TRANSFER
WARRANTS EVIDENCED HEREBY)
FOR VALUE RECEIVED __________ hereby sells assigns and transfers unto
Please insert social security or other identifying number.
_________________________________
___________________________________________________________________
(Please print name and address including zip code)
___________________________________________________________________
The Warrants represented by the within Warrant Certificate and does
hereby irrevocably constitute and appoint _________________________, Attorney,
to transfer said Warrant Certificate on the books of the Warrant Agent with
full power of substitution in the premises.
Dated: ______________________________________
Signature
(Signature must conform in all respects to the name of the holder as
specified on the face of this Warrant Certificate and must bear a signature
guarantee by a bank, trust company or member broker of the New York, Chicago
or Pacific Stock Exchange.)
Signature Guaranteed:
__________________________________
20
<PAGE> 22
ANNEX B to Warrant Agreement
FORM OF CERTIFICATE FOR DELIVERY OF BEARER WARRANT SECURITIES
[DEBT SECURITIES]
Issued by TEXAS INDUSTRIES, INC.
To: Texas Industries, Inc.
This certificate is submitted in connection with the request of the
undersigned that you deliver [$_____] principal amount of [Title of Warrant
Securities] (the "Warrant Securities") in bearer form upon exercise of
Warrants.
The undersigned hereby certifies that as of the date hereof (the date
of delivery to the undersigned of the Warrant Securities), the Warrant
Securities which are to be delivered to the undersigned in bearer form are not
being acquired by or for the account or benefit of a United States person, or
for offer to resell or for resale to a United States person or any person who
is within the United States or, if any beneficial interest in the Warrant
Securities is being acquired by a United States person, such United States
person (i) is a foreign branch of a United States financial institution (as
defined in U.S. Treas. Reg. Section 1.165-12(c)(1)(v)) which has provided to
the person from which it purchased the obligation a certificate stating that it
agrees to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986 and the regulations thereunder (a "qualifying
foreign branch"), (ii) acquired such securities through a qualifying foreign
branch and is holding the obligation through such financial institution or
(iii) is a financial institution holding for purposes of resale during the
restricted period (as defined in U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D)(7)), which financial institution has not acquired the
obligation for the purposes of resale directly or indirectly to a United States
person or to a person within the United States. In addition, the undersigned
hereby certifies that the above- referenced Warrant Securities are not being
acquired by or for the account or benefit of a "U.S. person", as the term is
defined in Regulation S under the United States Securities Act of 1933, as
amended. If the undersigned is a clearing organization, the undersigned
represents that this certificate is based on statements provided to it by its
member organizations. If the undersigned is a dealer, the undersigned agrees
to obtain a similar certificate from each person entitled to delivery of any of
the Warrant Securities in bearer form purchased from it. Notwithstanding the
foregoing, if the undersigned has actual knowledge that the information
contained in such certificate is false, the undersigned will not deliver a
Warrant Security in bearer form to the person who signed such certificate
notwithstanding the delivery of such certificate to the undersigned. The
undersigned will be deemed to have actual knowledge that the beneficial owner
is a United States person for this purpose if the undersigned has a United
States address for the beneficial owner of the Security.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia) and its possessions,
including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Islands, and Northern Mariana Islands; "United States person" means an
individual who is a citizen or resident of the United States, a corporation,
21
<PAGE> 23
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source; and a "clearing organization" means an entity which is in the
business of holding obligations for member organizations and transferring
obligations among such members by credit or debit to the account of a member
without the necessity of physical delivery of the obligation.
The undersigned understands that this certificate may be required in
connection with United States tax laws and regulations. The undersigned
irrevocably authorizes you to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings with respect to the
matters covered by this certificate.
_______________________________________ (Signature)
Dated:
_______________________________________ (Please print name)
Address:
22
<PAGE> 24
TEXAS INDUSTRIES, INC.
AND
[NAME OF WARRANT AGENT], WARRANT AGENT
WARRANT AGREEMENT [COMMON STOCK]
DATED AS OF___________
<PAGE> 25
WARRANT AGREEMENT dated as of_________, 19___ , between TEXAS
INDUSTRIES, INC., a Delaware corporation (the "Company"), and
_________________________________________, as warrant agent (the "Warrant
Agent", which term includes any successor warrant agent hereinafter referred
to).
[WHEREAS the Company proposes to sell] [title of Securities being
offered (the "Offered Securities") with] [WHEREAS the Company proposes to
issue] Warrant certificates evidencing one or more warrants (the "Warrants";
individually a "Warrant") representing the right to purchase shares of the
Common Stock of the Company (the "Warrant Securities"), such warrant
certificates and other warrant certificates issued pursuant to this Agreement
being called the "Warrant Certificates"; and
WHEREAS the Company desires that the Warrant Agent act on behalf of
the Company in connection with the issuance, exchange, exercise and replacement
of the Warrant Certificates, and in this Agreement wishes to set forth, among
other things, the form and provisions of the Warrant Certificates and the terms
and conditions on which they may be issued, exchanged, exercised and replaced.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES
SECTION 1.01. ISSUANCE OF WARRANTS. [Warrants shall be initially
issued in connection with the issuance of the Offered Securities] [but shall be
separately transferable on and after _______, 19___ (the "Detachable Date")]
[and shall not be separately transferable] [and each] [Each] Warrant
Certificate shall evidence one or more Warrants. Each Warrant evidenced by a
Warrant Certificate shall represent the right, subject to the provisions
contained herein and therein, to purchase up to _________ shares of the Warrant
Securities.
SECTION 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES.
Warrant Certificates, whenever issued, shall be in [bearer] [or] [registered]
form [or both] substantially in the form set forth in Annex A hereto, shall be
dated and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange on which the Warrants
may be listed, or to conform to common usage. The Warrant Certificates shall
be signed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Operating Officer, its Chief
Financial Officer, one of its Vice Presidents (whether or not designated by a
number or word or words added before
<PAGE> 26
or after the title Vice President), its Treasurer or an Assistant Treasurer
under its corporate seal and attested by its Secretary or one of its Assistant
Secretaries. Such signatures may be manual or facsimile signatures of such
authorized officers and may be imprinted or otherwise reproduced on the Warrant
Certificates. The seal of the Company may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant evidenced thereby
has been countersigned by the manual signature of the Warrant Agent. Such
signature by the Warrant Agent upon any Warrant Certificate executed by the
Company shall be conclusive evidence that the Warrant Certificate so
countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the
Warrant Agent, such Warrant Certificates may be countersigned and delivered
notwithstanding that the person who signed such Warrant Certificates ceased to
be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by such persons as, at the actual date of the execution
of such Warrant Certificate, shall be the proper officers of the Company,
although at the date of the execution of this Agreement any such person was not
such officer.
[IF BEARER WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean [IF OFFERED SECURITIES WITH WARRANTS
WHICH ARE NOT IMMEDIATELY DETACHABLE--prior to the Detachable Date, the
registered owner of the Offered Security to which such Warrant Certificate was
initially attached (or the bearer if the Offered Securities is in bearer form)
and after such Detachable Date] the bearer of such Warrant Certificate.]
[IF REGISTERED WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose. IF OFFERED SECURITIES WITH WARRANTS WHICH ARE
NOT IMMEDIATELY DETACHABLE--or, prior to the Detachable Date, upon the register
of the Offered Securities.] The Company will, or will cause the registrar of
the Offered Securities to, make available at all times to the Warrant Agent
such information as to holders of the Offered Securities with Warrants as may
be necessary to keep the Warrant Agent's records up-to-date.
SECTION 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant
Certificates evidencing the right to purchase up to __________ shares of
Warrant Securities (except as provided in Section 2.03(c), 3.02 and 4.01) may
be executed by the Company and delivered to the Warrant Agent upon the
execution of this Agreement or from time to time thereafter. The Warrant Agent
shall, upon receipt of Warrant Certificates duly executed on behalf of the
Company and upon order of the Company, countersign Warrant Certificates
evidencing Warrants representing the right to purchase up to __________ shares
of Warrant Securities and shall deliver such Warrant Certificates to or upon
the order of the Company.
2
<PAGE> 27
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or more previously countersigned
Warrant Certificates [IF REGISTERED WARRANTS--or in connection with their
transfer] as hereinafter provided, or as provided in Section 2.03(c).
ARTICLE II.
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. WARRANT PRICE. During the period from and including
___________, 19__, to and including ____________, 19__, the exercise price of
each Warrant will be [$_____] per share of the Warrant Securities. Such
purchase price of Warrant Securities is referred to in this Agreement as the
"Warrant Price".
SECTION 2.02. DURATION OF WARRANTS. Each Warrant may be exercised
in whole at any time, as specified herein, on or after [the date thereof]
[__________, 19__ and at or before 5:00 p.m. New York City time on ________,
19__ or such later date as may be selected by the Company, in a written
statement to the Warrant Agent and with notice to the holders of Warrants (such
date of expiration being called the "Expiration Date"). Each Warrant not
exercised at or before 5:00 p.m. New York City time on the Expiration Date (an
"Expired Unexercised Warrant") shall become void and all rights of the holder
of the Warrant Certificate evidencing such Warrant under this Agreement shall
cease. [IF NYSE LISTED, INSERT--; provided however, Expired Unexercised
Warrants shall have a residual value of one share of Common Stock of the
Company per 100 Expired Unexercised Warrants.]
SECTION 2.03. EXERCISE OF WARRANTS.
(a) During the period specified in Section 2.02, any
whole number of Warrants may be exercised [, subject to Section 2.03(c),] by
delivery to the Warrant Agent of the Warrant Certificate evidencing such
Warrant, with the form of election to purchase Warrant Securities set forth on
the reverse side of the Warrant Certificate properly completed and duly
executed, and by paying in full, [in lawful money of the United States of
America,] [in the foreign currency or currency unit in which the Warrant
Securities are denominated] by bank wire transfer in immediately available
funds the Warrant Price for each Warrant exercised to the principal corporate
trust office of the Warrant Agent [or at _____]. The date on which the duly
completed and executed Warrant Certificate and payment in full of the Warrant
Price is received by the Warrant Agent shall be deemed to be the date on which
the Warrant is exercised. The Warrant Agent shall deposit all funds received
by it in payment of the Warrant Price in an account of the Company maintained
with it and shall advise the Company by telephone at the end of each day on
which a payment or wire transfer for the exercise of Warrants is received of
the amount so deposited to its account. The Warrant Agent shall promptly
confirm such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as
promptly as practicable, advise the Company of (i) the number of Warrants
exercised, (ii) the instructions of each holder
3
<PAGE> 28
of the Warrant Certificates evidencing such Warrants with respect to delivery
of the Warrant Securities to which such holder is entitled upon such exercise,
(iii) delivery of Warrant Certificates evidencing the balance, if any, of the
Warrants remaining after such exercise and (iv) such other information as the
Company shall reasonably require.
(c) As soon as practicable after the exercise of any
Warrant, the Company shall issue, to or upon the order of the holder of the
Warrant Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled, in fully registered form, registered in such name or
names as may be directed by such holder. If fewer than all of the Warrants
evidenced by such Warrant Certificate are exercised, the Company shall execute
(attested and under seal as aforesaid), and an authorized officer of the
Warrant Agent shall manually countersign and deliver, a new Warrant Certificate
evidencing the number of such Warrants remaining unexercised, unless sufficient
time does not exist before the Expiration Date to exercise such Warrants in
accordance with the provisions of this Agreement.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issuance of the Warrant Securities and the Company
shall not be required to issue or deliver any Warrant Security until such tax
or other charge shall have been paid or it shall have been established to the
satisfaction of the Company that no such tax or other charge is due.
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.01. NO RIGHTS AS A HOLDER OF WARRANT SECURITIES CONFERRED
BY WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant
evidenced thereby shall entitle the holder thereof to any of the rights of a
holder of Warrant Securities, including, without limitation, the right to
receive any payment of dividends on Warrant Securities.
SECTION 3.02. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES.
Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it and the Company and,
in the case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide purchaser
or holder in due course, the Company may (or, in the case of mutilation, shall)
execute, and in such event an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate
of the same tenor and evidencing a like number of Warrants. Upon the issuance
of any new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Warrant Agent)
4
<PAGE> 29
in connection therewith. Every substitute Warrant Certificate executed and
delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of the
Company, whether or not the lost, stolen or destroyed Warrant Certificate shall
be at any time enforceable by anyone, and shall be entitled to the benefits of
this Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section are exclusive and shall preclude (to the extent lawful) any and all
other rights or remedies notwithstanding any law or statute existing or
hereinafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
SECTION 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a
Warrant Certificate, without the consent of the Warrant Agent, the holder of
any Warrant Securities or the holder of any other Warrant Certificate, may, in
his own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company or suitable to enforce or
otherwise in respect of, his right to exercise the Warrants evidenced by his
Warrant Certificate in the manner provided in his Warrant Certificate and in
this Agreement.
SECTION 3.04. RESERVATION OF SHARES. The Company shall at all
times reserve and keep available, free from preemptive rights, out of its
authorized Common Stock, for the purpose of effecting the exercise of the
Warrants, the full number of shares of Common Stock then issuable upon the
exercise of all outstanding Warrants.
ARTICLE IV.
EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES
SECTION 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [IF
OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS
ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--Upon] [IF OFFERED SECURITIES WITH
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date a
Warrant Certificate may be exchanged or transferred only together with the
Offered Securities to which the Warrant Certificate was initially attached, and
only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. Prior to the Detachable Date, each transfer
of the Offered Security [on the register maintained with respect to the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date, upon] surrender at the principal corporate trust
office of the Warrant Agent [or __________], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants [IF REGISTERED WARRANTS--or the transfer may be
registered in whole or in part]; provided that such other Warrant Certificates
evidence a like number of Warrants as the Warrant Certificates so surrendered.
[IF REGISTERED AND BEARER WARRANTS (SUBJECT TO ANY LIMITATIONS IMPOSED WITH
RESPECT TO SUCH EXCHANGES)--After the Detachable Date, upon] [Upon] surrender
at the principal corporate trust office of the Warrant Agent [or
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<PAGE> 30
__________], Warrant Certificates in bearer form may be exchanged for Warrant
Certificates in registered form evidencing a like number of Warrants.] [IF
REGISTERED WARRANTS--The Warrant Agent shall keep, at its corporate trust
office, books in which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and exchanges and transfers
of outstanding Warrant Certificates upon surrender of the Warrant Certificates
to the Warrant Agent at its principal corporate trust office [or_____] for
exchange [or registration of transfer], properly endorsed or accompanied by
appropriate instruments of registration of transfer and written instructions
for transfer, all in form satisfactory to the Company and the Warrant Agent.]
The Company may require payment of a service charge for any exchange [or
registration of transfer] of Warrant Certificates, and may require payment of a
sum sufficient to cover any stamp or other tax or other governmental charge
that may be imposed in connection with any such exchange [or registration of
transfer]. Whenever any Warrant Certificates are so surrendered for exchange
[or registration of transfer] an authorized officer of the Warrant Agent shall
manually countersign and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates duly authorized and executed by the
Company, as so requested. The Warrant Agent shall not be required to effect
any exchange [or registration of transfer] which will result in the issuance of
a Warrant Certificate evidencing a fraction of a Warrant or a number of full
Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange [or registration of transfer] of Warrant Certificates shall be the
valid obligations of the Company, evidencing the same obligations, and entitled
to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such exchange [or registration or transfer].
SECTION 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. [IF
OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--
subject to Section 4.01, each] [IF OFFERED SECURITIES WITH BEARER WARRANTS
WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ISSUED INDEPENDENT OF ANY OFFERED
SECURITIES--Each] Warrant Certificate shall be transferable by delivery and
shall be deemed negotiable and the bearer of each Warrant Certificate may be
treated by the Company, the Warrant Agent and all other persons dealing with
such bearer as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding.] [IF REGISTERED WARRANTS--Every
holder of a Warrant Certificate, by accepting the same, consents and agrees
with the Company, the Warrant Agent and with every subsequent holder of such
Warrant Certificate that until the transfer of the Warrant Certificate is
registered on the books of the Warrant Agent [or the register of the Offered
Securities prior to the Detachable Date], the Company, and the Warrant Agent
[or the registrar of the Offered Securities prior to the Detachable Date], may
treat such registered holder as the absolute owner thereof for any purpose and
as the person entitled to exercise the rights represented by the Warrants
evidenced thereby, any notice to contrary notwithstanding.]
SECTION 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange [, registration of transfer] or exercise
of the Warrants evidenced thereby, if surrendered to the Company, shall be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be
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<PAGE> 31
promptly canceled by the Warrant Agent and shall not be reissued and, except as
expressly permitted by this Agreement, no Warrant Certificate shall be issued
hereunder in exchange or in lieu thereof. The Warrant Agent shall deliver to
the Company from time to time or otherwise dispose of canceled Warrant
Certificates in a manner satisfactory to the Company.
ARTICLE V.
CONCERNING THE WARRANT AGENT
SECTION 5.01. WARRANT AGENT. The Company hereby appoints the
Warrant Agent as warrant agent of the Company in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein
set forth and the Warrant Agent hereby accepts such appointment. The Warrant
Agent shall have the powers and authority granted to and conferred upon it in
the Warrant Certificates and hereby and such further powers and authority to
act on behalf of the Company as the Company may hereafter grant to or confer
upon it in writing. All of the terms and provisions with respect to such
powers and authority contained in the Warrant Certificates are subject to and
governed by the terms and provisions hereof.
SECTION 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim of
such liability.
(b) AGENT FOR THE COMPANY. In acting under this
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any fiduciary
obligation or relationship of agency or trust for or with any of the holders of
Warrant Certificates or beneficial owners of Warrants.
(c) DOCUMENTS. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.
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<PAGE> 32
(d) CERTAIN TRANSACTIONS. The Warrant Agent, and its
officers, directors and employees, may become the owner of, or acquire any
interest in, Warrants and/or Warrant Securities and/or Offered Securities, with
the same rights that it or they would have if it were not the Warrant Agent
hereunder, and, to the extent permitted by applicable law, it or they may
engage or be interested in any financial or other transaction with the Company
and may act on, or as depositary, trustee or agent for, any committee or body
of holders of Warrant Securities, Offered Securities or other obligations of
the Company as freely as if it were not the Warrant Agent hereunder.
(e) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall
have no liability with respect to any invalidity of this Agreement or any of
the Warrant Certificates.
(f) NO LIABILITY FOR INTEREST. The Warrant Agent shall
transfer to the Company interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.
(g) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant
Agent shall not be responsible for any of the recitals or representations
herein or in the Warrant Certificates (except as to the Warrant Agent's
countersignature thereon), all of which are made solely by the Company.
(h) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligation to take any action
hereunder which might involve it in any expense or liability, the payment of
which within a reasonable time is not, in its reasonable opinion, assured to
it. The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant Certificates
countersigned and delivered by it to the Company pursuant to this Agreement or
for the application by the Company of the proceeds of the Warrant Certificates.
The Warrant Agent shall have no duty or responsibility in case of any default
by the Company in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at law or
otherwise, or, except as provided in Section 6.02 hereof, to make any demand
upon the Company.
SECTION 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR.
(a) The Company agrees, for the benefit of the holders
from time to time of the Warrant Certificates, that there shall at all times be
a Warrant Agent hereunder until all the Warrant Certificates are no longer
exercisable.
(b) The Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
PROVIDED that such date shall not be less than three months
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<PAGE> 33
after the date on which such notice is given unless the Company otherwise
agrees. The Warrant Agent hereunder may be removed at any time by the filing
with it of an instrument in writing signed by or on behalf of the Company and
specifying such removal and the date upon which such removal shall become
effective. Such resignation or removal shall take effect upon the appointment
by the Company, as hereinafter provided, of a successor Warrant Agent (which
shall be a bank or trust company authorized under the laws of the jurisdiction
of its organization to exercise corporate trust powers) and the acceptance of
such appointment by such successor Warrant Agent. The obligations of the
Company under Section 5.02(a) shall continue to the extent set forth therein
notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign,
or shall be removed, or shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or shall file a petition seeking relief under the
Federal Bankruptcy Code, as now constituted or hereafter amended, or under any
other applicable Federal or state bankruptcy law or similar law or make an
assignment for the benefit of its creditors or consent to the appointment of a
receiver or custodian of all or any substantial part of its property, or shall
admit in writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property
shall be appointed, or if an order of any court shall be entered for relief
against it under the provisions of the Federal Bankruptcy Code, as now
constituted or hereafter amended, or under any other applicable Federal or
state bankruptcy or similar law, of if any public officer shall have taken
charge or control of the Warrant Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
successor Warrant Agent of such appointment, the Warrant Agent shall cease to
be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
to transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent
hereunder may be merged or converted or any corporation with which the Warrant
Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent, provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
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<PAGE> 34
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01. AMENDMENT. This Agreement may be amended by the
parties hereto, without the consent of the holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; PROVIDED
that such action shall not adversely affect the interests of the holders of the
Warrant Certificates.
SECTION 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT.
If the Warrant Agent shall receive any notice or demand addressed to the
Company by the holder of a Warrant Certificate pursuant to the provisions of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.
SECTION 6.03. ADDRESSES. Any communications from the Company to
the Warrant Agent with respect to this Agreement shall be addressed to the
Warrant Agent at its principal corporate trust office at
______________________, _________________________, Attention:
_________________________, and any communication from the Warrant Agent to the
Company with respect to this Agreement shall be addressed to Texas Industries,
Inc., 1341 West Mockingbird Lane, Dallas, Texas 75247 Attention: General
Counsel or such other address as shall be specified in writing by the Warrant
Agent or the Company.
SECTION 6.04. NOTICES TO HOLDERS OF WARRANTS. Any notice to
holders of Warrants which by any provisions of this Agreement is required or
permitted to be given shall be given [IF REGISTERED WARRANTS--by first class
mail, postage prepaid, at such holder's address as appears on the books of the
Warrant Agent [or on the register of the Offered Securities prior to the
Detachable Date] [IF BEARER WARRANTS--by publication at least once in a daily
morning newspaper in New York City [, in London] and in ________].
SECTION 6.05. APPLICABLE LAW. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the substantive laws of the State of New York
without regard to any conflict of laws provisions.
SECTION 6.06. DELIVERY OF PROSPECTUS. The Company will furnish to
the Warrant Agent sufficient copies of a prospectus with an accompanying
prospectus supplement relating to the Warrant Securities, and the Warrant Agent
agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to
the holder of the Warrant Certificate evidencing such Warrant prior to or
concurrently with the delivery of the Warrant Securities issued upon such
exercise, a copy of such prospectus and prospectus supplement.
SECTION 6.07. OBTAINING OF GOVERNMENTAL APPROVALS. The Company
will from time to time take all action which may be necessary to obtain and
keep
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<PAGE> 35
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts filings under United States Federal and
state laws and any applicable laws of other jurisdictions (including without
limitation a registration statement in respect of the Warrants and Warrant
Securities under the Securities Act of 1933) which may be or become required in
connection with the issuance, sale, transfer and delivery of the Warrant
Certificates, the exercise of the Warrants, the issuance, sale, transfer and
delivery of the Warrant Securities issued upon exercise of the Warrants or upon
the expiration of the period during which the Warrants are exercisable.
SECTION 6.08. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT.
Nothing in this Agreement shall give to any person other than the Company, the
Warrant Agent and the holders of the Warrant Certificates any right, remedy or
claim under or by reason of this Agreement.
SECTION 6.09. HEADINGS. The descriptive headings of the several
Articles or Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 6.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
SECTION 6.11. INSPECTION OF AGREEMENT. A copy of this Agreement
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent and the Company for inspection by the holder of any
Warrant Certificate. The Warrant Agent or the Company may require such holder
to submit his Warrant Certificate for inspection by it.
SECTION 6.12. PAYMENT OF STAMP AND OTHER DUTIES. The Company will
pay all stamp and other duties, if any, to which, under the laws of the United
States of America, the original issuance of the Warrant Certificates may be
subject.
11
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by one of their respective authorized officers as of the day and year
first above written.
TEXAS INDUSTRIES, INC.
By _________________________________
Name:
Title:
[NAME OF WARRANT AGENT]
By _________________________________
Name:
Title:
12
<PAGE> 37
ANNEX A to Warrant Agreement
[FORM OF WARRANT CERTIFICATE]
[FACE OF WARRANT CERTIFICATE]
[FORM OF LEGEND IF SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE: PRIOR TO ______, 19___ THIS WARRANT CERTIFICATE CANNOT BE
TRANSFERRED OR EXCHANGED UNLESS ATTACHED TO A [TITLE OF OFFERED SECURITIES].]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT AS PROVIDED HEREIN
WARRANTS TO PURCHASE COMMON STOCK
Issued by
TEXAS INDUSTRIES, INC.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON ____, 19___
[No.] _____________________________ Warrants
This certifies that [the bearer is the] [_____ or registered assigns
is the registered] owner of the above indicated number of Warrants, each
Warrant entitling such [bearer] [registered owner] to purchase, at any time
[after 5:00 p.m. New York City time on _____________, 19__ and] at or before
5:00 p.m. New York City time on _____________, 19__ (or such later date as may
be selected by Texas Industries, Inc., a Delaware corporation (the "Company")
with notice to the holder hereof as provided in the Warrant Agreement (as
hereinafter defined)), _______ shares of the Common Stock (the "Warrant
Securities") of the Company, on the following basis: during the period from
and including _____________, 19___, the exercise price of each Warrant will be
[$______] per share of Common Stock; during the period from
____________________, 19___, to and including ____________________, 19___, the
exercise price of each Warrant will be [$______] (the "Warrant Price"). The
holder may exercise the Warrants evidenced hereby by delivery to the Warrant
Agent (as hereinafter defined) of this Warrant Certificate, with the form of
election to purchase on the reverse hereof properly completed and duly executed
and by paying in full, [in lawful money of the United States of America] [in
the foreign currency or currency unit in which the Warrant Securities are
denominated] by bank wire transfer in immediately available funds the Warrant
Price for each Warrant exercised to the warrant agent, such delivery and
payment to be made at the principal corporate trust office of [name of Warrant
Agent], or its successor as warrant agent (the "Warrant Agent"), [or_____]
currently at the address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and the Warrant Agreement.
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<PAGE> 38
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities. Upon any exercise of fewer than
all of the Warrants evidenced by this Warrant Certificate, there shall be
issued to the holder hereof a new Warrant Certificate evidencing the number of
Warrants remaining unexercised, unless sufficient time does not exist to
exercise such Warrants in accordance with the provisions of the Warrant
Agreement before the Warrants become void.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ________, 19__ (the "Warrant Agreement") between
the Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of
the Warrant Agreement are on file at the principal corporate trust office of
the Warrant Agent specified on the reverse hereof [and at __________].
[IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--prior to _________, 19__, this Warrant Certificate may be exchanged
or transferred only together with the [Title of Offered Securities] (the
"Offered Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Securities. After such date, this] [IF OFFERED
SECURITIES WITH BEARER WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS
ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--This] Warrant Certificate may be
registered when this Warrant Certificate is surrendered at the principal
corporate trust office of the Warrant Agent [or ______] by the registered owner
or his assigns, in person or by his attorney duly authorized in writing, in the
manner and subject to the limitations provided in the Warrant Agreement.]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Except as provided in the immediately preceding paragraph, after]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--After] countersignature
by the Warrant Agent and prior to the expiration of this Warrant Certificate,
this Warrant Certificate may be exchanged at the principal corporate trust
office of the Warrant Agent [or _________] for Warrant Certificates,
representing the same aggregate number of Warrants, [in registered form] [in
bearer form] [in either registered or bearer form].
[IF NYSE LISTED, INSERT--; Warrants not exercised by 5 p.m. on the
date specified above ("Expired Unexercised Warrants") shall have a residual
value of one share of Common Stock of the Company per 100 Expired Unexercised
Warrants.]
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including without limitation
the right to receive any dividend payments on the Warrant Securities.
This Warrant Certificate shall be governed by, and construed in
accordance with the laws of the State of New York without regard to any
conflict of laws provisions.
14
<PAGE> 39
The Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
Dated as of _______________, 19__.
TEXAS INDUSTRIES, INC.
By _________________________________
Name:
Title:
[SEAL]
Attest:
_____________________________________
[Assistant] Secretary
[NAME OF WARRANT AGENT], As Warrant Agent
By _________________________________
Name:
Title:
15
<PAGE> 40
(REVERSE OF WARRANT CERTIFICATE)
INSTRUCTIONS FOR EXERCISE OF WARRANT
To exercise the Warrants evidenced hereby, the holder must pay by bank
wire transfer in immediately available funds the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent], at its principal
corporate trust office at [insert address of Warrant Agent], Attention:
______________, [or ______________________________] which wire transfer must
specify the name of the holder and the number of Warrants exercised by such
holder. In addition, the holder must complete the information required below
and present this Warrant Certificate in person or by mail (registered mail is
recommended) to the Warrant Agent at the addresses set forth below. This
Warrant Certificate, completed and duly executed, must be received by the
Warrant Agent together with such wire transfer. [If the undersigned is
requesting delivery of Warrant Securities in bearer form, the person entitled
to physical delivery of such Warrant Securities will be required to deliver a
certificate (copies of which may be obtained from the Warrant Agent [or
_____________]) certifying that such Warrant Securities are not being acquired
by or on behalf of a U.S. person or for resale to a U.S. person unless such
U.S. person is qualified under United States tax laws and regulations.]
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise ________
Warrants, evidenced by this Warrant Certificate, to purchase ______________
shares of the Common Stock (the "Warrant Securities") of Texas Industries, Inc.
and represents that he has tendered payment for such Warrant Securities by bank
wire transfer in immediately available funds to the order of Texas Industries,
Inc., in care of (insert name and address of Warrant Agent)], in the amount of
[$_____] in accordance with the terms hereof. The undersigned requests that
said number of shares of Warrant Securities be registered form in the
authorized denominations, registered in such names and delivered], all as
specified in accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below or unless
sufficient time does not exist before the remaining Warrants become void.
Dated:
____________________________________
Name
___________________________(Please Print)
_____________________________________
16
<PAGE> 41
Address _________________________
(Insert Social Security or Other Identifying Number of Holder)
_________________________________
Signature _______________________
17
<PAGE> 42
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
By mail at
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
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<PAGE> 43
[IF REGISTERED WARRANT]
ASSIGNMENT
(FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES TO TRANSFER
WARRANTS EVIDENCED HEREBY)
FOR VALUE RECEIVED __________ hereby sells assigns and transfers unto
Please insert social security or other identifying number.
_________________________________
__________________________________________________________________
(Please print name and address including zip code)
________________________________________________________________________
The Warrants represented by the within Warrant Certificate and does
hereby irrevocably constitute and appoint _________________________, Attorney,
to transfer said Warrant Certificate on the books of the Warrant Agent with
full power of substitution in the premises.
Dated:
______________________________________
Signature
(Signature must conform in all respects to the name of the holder as
specified on the face of this Warrant Certificate and must bear a signature
guarantee by a bank, trust company or member broker of the New York, Chicago or
Pacific Stock Exchange.)
Signature Guaranteed:
_________________________________
19
<PAGE> 44
TEXAS INDUSTRIES, INC.
AND
[NAME OF WARRANT AGENT], WARRANT AGENT
___________________
WARRANT AGREEMENT [PREFERRED STOCK]
DATED AS OF ___________
<PAGE> 45
WARRANT AGREEMENT dated as of ____________________________, 19___,
between TEXAS INDUSTRIES, INC., a Delaware corporation (the "Company") and
___________________________________________________, as warrant agent (the
"Warrant Agent"), which term includes any successor warrant agent hereunder.
[WHEREAS, the Company proposes to sell] [title of Securities being
offered (the "Offered Securities") with] [WHEREAS the Company proposes to
issue] Warrant certificates evidencing one or more warrants (the "Warrants";
individually a "Warrant") representing the right to purchase up to __________
shares of the [title] Preferred Stock of the Company (the "Warrant
Securities"), having the terms of which shall be set forth in the Certificate
of Designation relating thereto, such warrant certificates and other warrant
certificates issued pursuant to this Agreement being called the "Warrant
Certificates";] and
WHEREAS the Company desires that the Warrant Agent act on behalf of
the Company in connection with the issuance, exchange, exercise and replacement
of the Warrant Certificates, and in this Agreement wishes to set forth, among
other things, the form and provisions of the Warrant Certificates and the terms
and conditions on which they may be issued, exchanged, exercised and replaced.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES
SECTION 1.01. ISSUANCE OF WARRANTS. [Warrants shall be initially
issued in connection with the issuance of the Offered Securities] [but shall be
separately transferable on and after _______, 19___ (the "Detachable Date")]
[and shall not be separately transferable] [and each] [Each] Warrant
Certificate shall evidence one or more Warrants. Each Warrant evidenced by a
Warrant Certificate shall represent the right, subject to the provisions
contained herein and therein, to purchase up to _________ shares of the Warrant
Securities.
SECTION 1.02. EXECUTION AND DELIVERY OF WARRANT CERTIFICATES.
Warrant Certificates, whenever issued, shall be in [bearer] [or] [registered]
form [or both] substantially in the form set forth in Annex A hereto, shall be
dated and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange on which the Warrants
may be listed, or to conform to common usage. The Warrant Certificates shall
be signed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Operating Officer, its Chief
Financial Officer,
<PAGE> 46
one of its Vice Presidents (whether or not designated by a number or word or
words added before or after the title Vice President), its Treasurer or an
Assistant Treasurer under its corporate seal and attested by its Secretary or
one of its Assistant Secretaries. Such signatures may be manual or facsimile
signatures of such authorized officers and may be imprinted or otherwise
reproduced on the Warrant Certificates. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant evidenced thereby
has been countersigned by the manual signature of the Warrant Agent. Such
signature by the Warrant Agent upon any Warrant Certificate executed by the
Company shall be conclusive evidence that the Warrant Certificate so
countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned and delivered by the
Warrant Agent, such Warrant Certificates may be countersigned and delivered
notwithstanding that the person who signed such Warrant Certificates ceased to
be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by such persons as, at the actual date of the execution
of such Warrant Certificate, shall be the proper officers of the Company,
although at the date of the execution of this Agreement any such person was not
such officer.
[IF BEARER WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean [IF OFFERED DEBT SECURITIES WITH
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--prior to the Detachable Date,
the registered owner of the Offered Security to which such Warrant Certificate
was initially attached (or the bearer if the Offered Securities is in bearer
form) and after such Detachable Date] the bearer of such Warrant Certificate.]
[IF REGISTERED WARRANTS--The term "holder" or "holder of a Warrant
Certificate" as used herein shall mean any person in whose name at the time any
Warrant Certificate shall be registered upon the books to be maintained by the
Warrant Agent for that purpose. IF OFFERED SECURITIES WITH WARRANTS WHICH ARE
NOT IMMEDIATELY DETACHABLE--or, prior to the Detachable Date, upon the register
of the Offered Securities.] The Company will, or will cause the registrar of
the Offered Securities to, make available at all times to the Warrant Agent
such information as to holders of the Offered Securities with Warrants as may
be necessary to keep the Warrant Agent's records up-to-date.
SECTION 1.03. ISSUANCE OF WARRANT CERTIFICATES. Warrant
Certificates evidencing the right to purchase ___________ shares of Warrant
Securities (except as provided in Section 2.03(c), 3.02 and 4.01) may be
executed by the Company and delivered to the Warrant Agent upon the execution
of this Agreement or from time to time thereafter. The Warrant Agent shall,
upon receipt of Warrant Certificates duly executed on behalf of the Company and
upon order of the Company, countersign Warrant Certificates evidencing Warrants
representing the right to purchase up to __________ shares of Warrant
Securities and shall
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<PAGE> 47
deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or more previously countersigned
Warrant Certificates [IF REGISTERED WARRANTS--or in connection with their
transfer] as hereinafter provided, or as provided in Section 2.03(c).
ARTICLE II.
WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. WARRANT PRICE. During the period from and including
___________, 19__, to and including ____________, 19__, the exercise price of
each Warrant will be [$_____]. Such purchase price of Warrant Securities is
referred to in this Agreement as the "Warrant Price".
SECTION 2.02. DURATION OF WARRANTS. Each Warrant may be exercised in
whole at any time, as specified herein, on or after [the date thereof]
[__________, 19__ and at or before 5:00 p.m. New York City time on ________,
19__ or such later date as may be selected by the Company, in a written
statement to the Warrant Agent and with notice to the holders of Warrants (such
date of expiration being called the "Expiration Date"). Each Warrant not
exercised at or before 5:00 p.m. New York City time on the Expiration Date (an
"Expired Unexercised Warrant") shall become void and all rights of the holder
of the Warrant Certificate evidencing such Warrant under this Agreement shall
cease[.] [IF NYSE LISTED, INSERT--; provided however, Expired Unexercised
Warrants shall have a residual value of one share of Common Stock of the
Company per 100 Expired Unexercised Warrants.]
SECTION 2.03. EXERCISE OF WARRANTS.
(a) During the period specified in Section 2.02, any
whole number of Warrants may be exercised [, subject to Section 2.03(c),] by
delivery to the Warrant Agent of the Warrant Certificate evidencing such
Warrant, with the form of election to purchase Warrant Securities set forth on
the reverse side of the Warrant Certificate properly completed and duly
executed, and by paying in full, [in lawful money of the United States of
America,] [in the foreign currency or currency unit in which the Warrant
Securities are denominated] by bank wire transfer in immediately available
funds the Warrant Price for each Warrant exercised to the principal corporate
trust office of the Warrant Agent [or at _____]. The date on which the duly
completed and executed Warrant Certificate and payment in full of the Warrant
Price is received by the Warrant Agent shall be deemed to be the date on which
the Warrant is exercised. The Warrant Agent shall deposit all funds received by
it in payment of the Warrant Price in an account of the Company maintained with
it and shall advise the Company by telephone at the end of each day on which a
payment or wire transfer for the exercise of Warrants is received of the amount
so deposited to its account. The Warrant Agent shall promptly confirm such
telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as
promptly as practicable, advise the Company of (i) the number of Warrants
exercised, (ii) the instructions of each holder
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<PAGE> 48
of the Warrant Certificates evidencing such Warrants with respect to delivery
of the Warrant Securities to which such holder is entitled upon such exercise,
(iii) delivery of Warrant Certificates evidencing the balance, if any, of the
Warrants remaining after such exercise and (iv) such other information as the
Company shall reasonably require.
(c) As soon as practicable after the exercise of any
Warrant, the Company shall issue, to or upon the order of the holder of the
Warrant Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled, in fully registered form, registered in such name or
names as may be directed by such holder. If fewer than all of the Warrants
evidenced by such Warrant Certificate are exercised, the Company shall execute
(attested and under seal as aforesaid), and an authorized officer of the
Warrant Agent shall manually countersign and deliver, a new Warrant Certificate
evidencing the number of such Warrants remaining unexercised, unless sufficient
time does not exist before the Expiration Date to exercise such Warrants in
accordance with the provisions of this Agreement.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issuance of the Warrant Securities and the Company
shall not be required to issue or deliver any Warrant Security until such tax
or other charge shall have been paid or it shall have been established to the
satisfaction of the Company that no such tax or other charge is due.
ARTICLE III.
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.01. NO RIGHTS AS A HOLDER OF WARRANT SECURITIES CONFERRED
BY WARRANTS OR WARRANT CERTIFICATES. No Warrant Certificate or Warrant
evidenced thereby shall entitle the holder thereof to any of the rights of a
holder of Warrant Securities, including without limitation the right to receive
any dividend or payment on Warrant Securities.
SECTION 3.02. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES.
Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity reasonably satisfactory to it and the Company and,
in the case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant
Agent that such Warrant Certificate has been acquired by a bona fide purchaser
or holder in due course, the Company may (or, in the case of mutilation, shall)
execute, and in such event an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate
of the same tenor and evidencing a like number of Warrants. Upon the issuance
of any new Warrant Certificate under this Section, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Warrant Agent)
4
<PAGE> 49
in connection therewith. Every substitute Warrant Certificate executed and
delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall represent an additional contractual obligation of the
Company, whether or not the lost, stolen or destroyed Warrant Certificate shall
be at any time enforceable by anyone, and shall be entitled to the benefits of
this Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder. The provisions of this
Section are exclusive and shall preclude (to the extent lawful) any and all
other rights or remedies notwithstanding any law or statute existing or
hereinafter enacted to the contrary with respect to the replacement or payment
of negotiable instruments or other securities without their surrender.
SECTION 3.03. HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS.
Notwithstanding any of the provisions of this Agreement, any holder of a
Warrant Certificate, without the consent of the Warrant Agent, the holder of
any Warrant Securities or the holder of any other Warrant Certificate, may, in
his own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company suitable to enforce or
otherwise in respect of, his right to exercise the Warrants evidenced by his
Warrant Certificate in the manner provided in his Warrant Certificate and in
this Agreement.
SECTION 3.04. RESERVATION OF SHARES. The Company shall at all
times reserve and keep available, free from preemptive rights, out of its
authorized [title] Preferred Stock, the full number of shares of [title]
Preferred Stock then issuable upon the exercises of all outstanding Warrants,
and the Company shall at all times reserve and keep available, out of its
authorized capital stock, for the purpose of effecting any conversion of the
Warrant Securities, the full number of shares of such capital stock issuable
upon conversion of all Warrant Securities.
ARTICLE IV.
EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES
SECTION 4.01. EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES. [IF
OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS
ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--Upon] [IF OFFERED SECURITIES WITH
WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--Prior to the Detachable Date, a
Warrant Certificate may be exchanged or transferred only together with the
Offered Securities to which the Warrant Certificate was initially attached, and
only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. Prior to the Detachable Date, each transfer
of the Offered Security [on the register maintained with respect to the Offered
Securities] shall operate also to transfer the related Warrant Certificates.
After the Detachable Date, upon] surrender at the principal corporate trust
office of the Warrant Agent [or __________], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants [IF REGISTERED WARRANTS--or the transfer may be
registered in whole or in part]; provided that such other Warrant Certificates
evidence a like number of Warrants as the Warrant Certificates so
5
<PAGE> 50
surrendered. [IF REGISTERED AND BEARER WARRANTS (SUBJECT TO ANY LIMITATIONS
IMPOSED WITH RESPECT TO SUCH EXCHANGES)--After the Detachable Date, upon]
[Upon] surrender at the principal corporate trust office of the Warrant Agent
[or __________], Warrant Certificates in bearer form may be exchanged for
Warrant Certificates in registered form evidencing a like number of Warrants.]
[IF REGISTERED WARRANTS-- The Warrant Agent shall keep, at its corporate trust
office, books in which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and exchanges and transfers
of outstanding Warrant Certificates upon surrender of the Warrant Certificates
to the Warrant Agent at its principal corporate trust office [or _____] for
exchange [or registration of transfer], properly endorsed or accompanied by
appropriate instruments of registration of transfer and written instructions
for transfer, all in form satisfactory to the Company and the Warrant Agent.]
The Company may require payment of a service charge for any exchange [or
registration of transfer] of Warrant Certificates, and may require payment of a
sum sufficient to cover any stamp or other tax or other governmental charge
that may be imposed in connection with any such exchange [or registration of
transfer]. Whenever any Warrant Certificates are so surrendered for exchange
[or registration of transfer] an authorized officer of the Warrant Agent shall
manually countersign and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates duly authorized and executed by the
Company, as so requested. The Warrant Agent shall not be required to effect
any exchange [or registration of transfer] which will result in the issuance of
a Warrant Certificate evidencing a fraction of a Warrant or a number of full
Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange [or registration of transfer] of Warrant Certificates shall be the
valid obligations of the Company, evidencing the same obligations, and entitled
to the same benefits under this Agreement, as the Warrant Certificates
surrendered for such exchange [or registration or transfer].
SECTION 4.02. TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. [IF
OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY DETACHABLE--
Subject to Section 4.01, each] [IF OFFERED SECURITIES WITH BEARER WARRANTS
WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS ISSUED INDEPENDENT OF ANY OFFERED
SECURITIES--Each] Warrant Certificate shall be transferable by delivery and
shall be deemed negotiable and the bearer of each Warrant Certificate may be
treated by the Company, the Warrant Agent and all other persons dealing with
such bearer as the absolute owner thereof for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced thereby,
any notice to the contrary notwithstanding.] [IF REGISTERED WARRANTS--Every
holder of a Warrant Certificate, by accepting the same, consents and agrees
with the Company, the Warrant Agent and with every subsequent holder of such
Warrant Certificate that until the transfer of the Warrant Certificate is
registered on the books of the Warrant Agent [or the register of the Offered
Securities prior to the Detachable Date], the Company and the Warrant Agent [or
the registrar of the Offered Securities prior to the Detachable Date], may
treat such registered holder as the absolute owner thereof for any purpose and
as the person entitled to exercise the rights represented by the Warrants
evidenced thereby, any notice to contrary notwithstanding.]
6
<PAGE> 51
SECTION 4.03. CANCELLATION OF WARRANT CERTIFICATES. Any Warrant
Certificate surrendered for exchange [, registration of transfer] or exercise
of the Warrants evidenced thereby, if surrendered to the Company, shall be
delivered to the Warrant Agent and all Warrant Certificates surrendered or so
delivered to the Warrant Agent shall be promptly canceled by the Warrant Agent
and shall not be reissued and, except as expressly permitted by this Agreement,
no Warrant Certificate shall be issued hereunder in exchange or in lieu
thereof. The Warrant Agent shall deliver to the Company from time to time or
otherwise dispose of canceled Warrant Certificates in a manner satisfactory to
the Company.
ARTICLE V.
CONCERNING THE WARRANT AGENT
SECTION 5.01. WARRANT AGENT. The Company hereby appoints the
Warrant Agent as warrant agent of the Company in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein
set forth and the Warrant Agent hereby accepts such appointment. The Warrant
Agent shall have the powers and authority granted to and conferred upon it in
the Warrant Certificates and hereby and such further powers and authority to
act on behalf of the Company as the Company may hereafter grant to or confer
upon it in writing. All of the terms and provisions with respect to such
powers and authority contained in the Warrant Certificates are subject to and
governed by the terms and provisions hereof.
SECTION 5.02. CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) COMPENSATION AND INDEMNIFICATION. The Company agrees
promptly to pay the Warrant Agent the compensation to be agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Warrant
Agent, arising out of or in connection with its acting as Warrant Agent
hereunder, as well as the costs and expenses of defending against any claim of
such liability.
(b) AGENT FOR THE COMPANY. In acting under this
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any fiduciary
obligation or relationship of agency or trust for or with any of the holders of
Warrant Certificates or beneficial owners of Warrants.
(c) DOCUMENTS. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or
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<PAGE> 52
document reasonably believed by it to be genuine and to have been presented or
signed by the proper parties.
(d) CERTAIN TRANSACTIONS. The Warrant Agent, and its
officers, directors and employees, may become the owner of, or acquire any
interest in, Warrants and/or Warrant Securities and/or Offered Securities, with
the same rights that it or they would have if it were not the Warrant Agent
hereunder, and, to the extent permitted by applicable law, it or they may
engage or be interested in any financial or other transaction with the Company
and may act on, or as depositary, trustee or agent for, any committee or body
of holders of Warrant Securities, Offered Securities or other obligations of
the Company as freely as if it were not the Warrant Agent hereunder.
(e) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall
have no liability with respect to any invalidity of this Agreement or any of
the Warrant Certificates.
(f) NO LIABILITY FOR INTEREST. The Warrant Agent shall
transfer to the Company interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement or of the Warrant
Certificates.
(g) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant
Agent shall not be responsible for any of the recitals or representations
herein or in the Warrant Certificates (except as to the Warrant Agent's
countersignature thereon), all of which are made solely by the Company.
(h) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be under any obligation to take any action
hereunder which might involve it in any expense or liability, the payment of
which within a reasonable time is not, in its reasonable opinion, assured to
it. The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant Certificates
countersigned and delivered by it to the Company pursuant to this Agreement or
for the application by the Company of the proceeds of the Warrant Certificates.
The Warrant Agent shall have no duty or responsibility in case of any default
by the Company in the performance of its covenants or agreements contained
herein or in the Warrant Certificates or in the case of the receipt of any
written demand from a holder of a Warrant Certificate with respect to such
default, including, without limiting the generality of the foregoing, any duty
or responsibility to initiate or attempt to initiate any proceedings at law or
otherwise, or, except as provided in Section 6.02 hereof, to make any demand
upon the Company.
SECTION 5.03. RESIGNATION AND APPOINTMENT OF SUCCESSOR.
(a) The Company agrees, for the benefit of the holders
from time to time of the Warrant Certificates, that there shall at all times be
a Warrant Agent hereunder until all the Warrant Certificates are no longer
exercisable.
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<PAGE> 53
(b) The Warrant Agent may at any time resign as such
agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
PROVIDED that such date shall not be less than three months after the date on
which such notice is given unless the Company otherwise agrees. The Warrant
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the date upon which such removal shall become effective. Such
resignation or removal shall take effect upon the appointment by the Company,
as hereinafter provided, of a successor Warrant Agent (which shall be a bank or
trust company authorized under the laws of the jurisdiction of its organization
to exercise corporate trust powers) and the acceptance of such appointment by
such successor Warrant Agent. The obligations of the Company under Section
5.02(a) shall continue to the extent set forth therein notwithstanding the
resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall resign,
or shall be removed, or shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or shall file a petition seeking relief under the
Federal Bankruptcy Code, as now constituted or hereafter amended, or under any
other applicable Federal or state bankruptcy law or similar law or make an
assignment for the benefit of its creditors or consent to the appointment of a
receiver or custodian of all or any substantial part of its property, or shall
admit in writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property
shall be appointed, or if an order of any court shall be entered for relief
against it under the provisions of the Federal Bankruptcy Code, as now
constituted or hereafter amended, or under any other applicable Federal or
state bankruptcy or similar law, of if any public officer shall have taken
charge or control of the Warrant Agent or of its property or affairs, for the
purpose of rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be appointed by the Company by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
successor Warrant Agent of such appointment, the Warrant Agent shall cease to
be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Warrant Agent hereunder, and such predecessor, upon payment of its charges and
to transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent
hereunder may be merged or converted or any corporation with which the Warrant
Agent may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall be a party, or any
corporation to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent, provided that
it shall be
9
<PAGE> 54
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
ARTICLE VI.
MISCELLANEOUS
SECTION 6.01. AMENDMENT. This Agreement may be amended by the
parties hereto, without the consent of the holder of any Warrant Certificate,
for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; PROVIDED
that such action shall not adversely affect the interests of the holders of the
Warrant Certificates.
SECTION 6.02. NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT.
If the Warrant Agent shall receive any notice or demand addressed to the
Company by the holder of a Warrant Certificate pursuant to the provisions of
the Warrant Certificates, the Warrant Agent shall promptly forward such notice
or demand to the Company.
SECTION 6.03. ADDRESSES. Any communications from the Company to
the Warrant Agent with respect to this Agreement shall be addressed to the
Warrant Agent at its principal corporate trust office at
______________________, _________________________, Attention:
_________________________, and any communication from the Warrant Agent to the
Company with respect to this Agreement shall be addressed to Texas Industries,
Inc., 1341 West Mockingbird Lane, Dallas, Texas 75247, Attention: General
Counsel, or such other address as shall be specified in writing by the Warrant
Agent or the Company.
SECTION 6.04. NOTICES TO HOLDERS OF WARRANTS. Any notice to
holders of Warrants which by any provisions of this Agreement is required or
permitted to be given shall be given [IF REGISTERED WARRANTS--by first class
mail, postage prepaid, at such holder's address as appears on the books of the
Warrant Agent [or on the register of the Offered Securities prior to the
Detachable Date] [IF BEARER WARRANTS--by publication at least once in a daily
morning newspaper in New York City [, in London] and in ________].
SECTION 6.05. APPLICABLE LAW. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the substantive laws of the State of New York
without regard to any conflict of laws provisions.
SECTION 6.06. DELIVERY OF PROSPECTUS. The Company will furnish to
the Warrant Agent sufficient copies of a prospectus with an accompanying
prospectus supplement relating to the Warrant Securities, and the Warrant Agent
agrees that upon the exercise of any Warrant, the Warrant Agent will deliver to
the holder of the Warrant Certificate evidencing such Warrant prior to or
concurrently with the delivery of the Warrant Securities issued upon such
exercise, a copy of such prospectus and prospectus supplement.
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SECTION 6.07. OBTAINING OF GOVERNMENTAL APPROVALS. The Company
will from time to time take all action which may be necessary to obtain and
keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under United States
Federal and state laws and any applicable laws of other jurisdictions
(including without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933) which may be
or become required in connection with the issuance, sale, transfer and delivery
of the Warrant Certificates, the exercise of the Warrants, the issuance, sale,
transfer and delivery of the Warrant Securities issued upon exercise of the
Warrants or upon the expiration of the period during which the Warrants are
exercisable.
SECTION 6.08. PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT.
Nothing in this Agreement shall give to any person other than the Company, the
Warrant Agent and the holders of the Warrant Certificates any right, remedy or
claim under or by reason of this Agreement.
SECTION 6.09. HEADINGS. The descriptive headings of the several
Articles or Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 6.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which as so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
SECTION 6.11. INSPECTION OF AGREEMENT. A copy of this Agreement
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent and the Company for inspection by the holder of any
Warrant Certificate. The Warrant Agent or the Company may require such holder
to submit his Warrant Certificate for inspection by it.
SECTION 6.12. PAYMENT OF STAMP AND OTHER DUTIES. The Company will
pay all stamp and other duties, if any, to which, under the laws of the United
States of America, the original issuance of the Warrant Certificates may be
subject.
11
<PAGE> 56
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by one of their respective authorized officers as of the day and year
first above written.
TEXAS INDUSTRIES, INC.
By ___________________________________
Name:
Title:
[NAME OF WARRANT AGENT]
By ___________________________________
Name:
Title:
12
<PAGE> 57
ANNEX A to Warrant Agreement
[FORM OF WARRANT CERTIFICATE]
[FACE OF WARRANT CERTIFICATE]
[FORM OF LEGEND IF SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE: PRIOR TO ______, 19___ THIS WARRANT CERTIFICATE CANNOT BE
TRANSFERRED OR EXCHANGED UNLESS ATTACHED TO A [TITLE OF OFFERED SECURITIES].]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT AGENT AS PROVIDED HEREIN
WARRANTS TO PURCHASE [TITLE] PREFERRED STOCK
Issued by
TEXAS INDUSTRIES, INC.
VOID AFTER 5:00 P.M. NEW YORK CITY TIME ON ____, 19___
No. ________
This certifies that [the bearer is the] [_____ or registered assigns
is the registered] owner of the above indicated number of Warrants, each
Warrant entitling such [bearer] [registered owner] to purchase, at any
time [after 5:00 p.m. New York City time on _____________, 19__ and] at or
before 5:00 p.m. New York City time on _____________, 19__ (or such later date
as may be selected by Texas Industries, Inc., a Delaware corporation (the
"Company") with notice to the holder hereof as provided in the Warrant
Agreement (as hereinafter defined)), __________ shares of the [title] Preferred
Stock (the "Warrant Securities") of Company, on the following basis: during
the period from and including _____________, 19___, the exercise price of each
Warrant will be [$______] per share; [during the period from
____________________, 19___, to and including ____________________, 19___, the
exercise price of each Warrant will be [$______] per share (the "Warrant
Price"). The holder may exercise the Warrants evidenced hereby by delivery to
the Warrant Agent (as hereinafter defined) of this Warrant Certificate, with
the form of election to purchase on the reverse hereof properly completed and
duly executed and by paying in full, [in lawful money of the United States of
America] [in the foreign currency or currency unit in which the Warrant
Securities are denominated] by bank wire transfer in immediately available
funds the Warrant Price for each Warrant exercised to the warrant agent, such
delivery and payment to be made at the principal corporate trust office of
[name of Warrant Agent], or its successor as warrant agent (the "Warrant
Agent"), [or _____] currently at the address specified on the reverse hereof,
and upon compliance with and subject to the conditions set forth herein and the
Warrant Agreement.
13
<PAGE> 58
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities. Upon any exercise of fewer than
all of the Warrants evidenced by this Warrant Certificate, there shall be
issued to the holder hereof a new Warrant Certificate evidencing the number of
Warrants remaining unexercised, unless sufficient time does not exist to
exercise such Warrants in accordance with the provisions of the Warrant
Agreement before the Warrants become void.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of ________, 19__ (the "Warrant Agreement") between
the Company and the Warrant Agent and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
holder of this Warrant Certificate consents by acceptance hereof. Copies of
the Warrant Agreement are on file at the principal corporate trust office of
the Warrant Agent specified on the reverse hereof [and at __________].
[IF OFFERED SECURITIES WITH BEARER WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Prior to _________, 19__, this Warrant Certificate may be exchanged
or transferred only together with the [Title of Offered Securities] (the
"Offered Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Securities. After such date, this] [IF OFFERED
SECURITIES WITH BEARER WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR WARRANTS
ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--This] Warrant Certificate may be
registered when this Warrant Certificate is surrendered at the principal
corporate trust office of the Warrant Agent [or ______] by the registered owner
or his assigns, in person or by his attorney duly authorized in writing, in the
manner and subject to the limitations provided in the Warrant Agreement.]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE NOT IMMEDIATELY
DETACHABLE--Except as provided in the immediately preceding paragraph, after]
[IF OFFERED SECURITIES WITH WARRANTS WHICH ARE IMMEDIATELY DETACHABLE OR
WARRANTS ISSUED INDEPENDENT OF ANY OFFERED SECURITIES--After] countersignature
by the Warrant Agent and prior to the expiration of this Warrant Certificate,
this Warrant Certificate may be exchanged at the principal corporate trust
office of the Warrant Agent [or _________] for Warrant Certificates,
representing the same aggregate number of Warrants, [in registered form] [in
bearer form] [in either registered or bearer form].
[IF NYSE LISTED, INSERT--; Warrants not exercised by 5 p.m. on the
date specified above ("Expired Unexercised Warrants") shall have a residual
value of one share of Common Stock of the Company per 100 Expired Unexercised
Warrants.]
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including without limitation
the right to receive payments of any dividends on the Warrant Securities.
This Warrant Certificate shall be governed by, and construed in
accordance with the laws of the State of New York without regard to any
conflict of laws provisions.
14
<PAGE> 59
The Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
Dated as of _______________, 19__.
TEXAS INDUSTRIES, INC.
By ___________________________________
Name:
Title:
[SEAL]
Attest:
_____________________________________ [Assistant] Secretary
[NAME OF WARRANT AGENT], As Warrant Agent
By ___________________________________
Name:
Title:
15
<PAGE> 60
(REVERSE OF WARRANT CERTIFICATE)
INSTRUCTIONS FOR EXERCISE OF WARRANT
To exercise the Warrants evidenced hereby, the holder must pay by bank
wire transfer in immediately available funds the Warrant Price in full for
Warrants exercised to [insert name of Warrant Agent], at its principal
corporate trust office at [insert address of Warrant Agent], Attention:
______________, [or ______________________________] which wire transfer must
specify the name of the holder and the number of Warrants exercised by such
holder. In addition, the holder must complete the information required below
and present this Warrant Certificate in person or by mail (registered mail is
recommended) to the Warrant Agent at the addresses set forth below. This
Warrant Certificate, completed and duly executed, must be received by the
Warrant Agent together with such wire transfer. [If the undersigned is
requesting delivery of Warrant Securities in bearer form, the person entitled
to physical delivery of such Warrant Securities will be required to deliver a
certificate (copies of which may be obtained from the Warrant Agent [or
_____________]) certifying that such Warrant Securities are not being acquired
by or on behalf of a U.S. person or for resale to a U.S. person unless such
U.S. person is qualified under United States tax laws and regulations.]
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise ________
Warrants, evidenced by this Warrant Certificate, to purchase _______ shares of
[title] Preferred Stock (the "Warrant Securities") of Texas Industries, Inc.
and represents that he has tendered payment for such Warrant Securities by bank
wire transfer in immediately available funds to the order of Texas Industries,
Inc., in care of (insert name and address of Warrant Agent)], in the amount of
[$_____] in accordance with the terms hereof. The undersigned requests that
said number of shares of Warrant Securities be registered in such names and
delivered, all as specified in accordance with the instructions set forth
below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered to
the undersigned unless otherwise specified in the instructions below or unless
sufficient time does not exist before the remaining Warrants become void.
Dated:
________________________________ Name
_____________________________________ (Please Print)
________________________________ Address
___________________________________ (Insert Social Security or Other
Identifying
16
<PAGE> 61
Number of Holder) ___________________________________________
Signature __________________________________
17
<PAGE> 62
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
By mail at
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
18
<PAGE> 63
[IF REGISTERED WARRANT]
ASSIGNMENT
(FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER DESIRES TO TRANSFER
WARRANTS EVIDENCED HEREBY)
FOR VALUE RECEIVED __________ hereby sells assigns and transfers unto
Please insert social security or other identifying number.
_________________________________
_________________________________ __________________________________
(Please print name and address including zip code)
________________________________________________________________________________
The Warrants represented by the within Warrant Certificate and does
hereby irrevocably constitute and appoint _________________________, Attorney,
to transfer said Warrant Certificate on the books of the Warrant Agent with
full power of substitution in the premises.
Dated:
______________________________________ Signature (Signature must
conform in all respects to the name of the holder as specified on the face of
this Warrant Certificate and must bear a signature guarantee by a bank, trust
company or member broker of the New York, Chicago or Pacific Stock Exchange.)
Signature Guaranteed:
______________________________________
19
<PAGE> 1
EXHIBIT 5
[Letterhead of Morris, Nichols, Arsht, & Tunnell]
May ___, 1998
TXI Capital Trust I
c/o Texas Industries, Inc.
1341 West Mockingbird Lane
Dallas, Texas 75247-6913
Re: TXI Capital Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel to TXI Capital Trust
I, a Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the creation of the Trust and the proposed issuance of
Preferred Securities therein to beneficial owners pursuant to and as described
in the Registration Statement (and the Prospectus forming a part thereof) on
Form S-3 filed with the Securities and Exchange Commission (the "Commission") by
the Trust and Texas Industries, Inc., a Delaware corporation (the "Company"), on
or about the date hereof (the "Registration Statement"). Capitalized terms used
herein and not otherwise herein defined are used with respect to the Trust as
defined in the draft form of Amended and Restated Trust Agreement of the Trust
attached as an exhibit to the Registration Statement (the "Governing
Instrument").
In rendering this opinion, we have examined and relied upon
copies of the following documents in the forms provided to us: the Certificate
of Trust of the Trust as filed in the Office of the Secretary of State of the
State of Delaware (the "State Office") on May 26, 1998 (the "Certificate"); the
Trust Agreement of the Trust dated as of May 26, 1998 (the "Original Governing
Instrument"); the Governing Instrument; the form of Indenture to be entered into
by the Company relating to the Preferred Securities; the form of Guarantee
Agreement to be entered into by the Company relating to the Preferred Securities
(the "Guarantee Agreement"); the form of
<PAGE> 2
TXI Capital Trust I
c/o Texas Industries, Inc.
May ___, 1998
Page 2
Underwriting Agreement to be entered into among the Company, the Trust and SBC
Warburg Dillon Read Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Morgan Stanley & Co. Incorporated (the "Underwriting Agreement"); the
Registration Statement; and a certification of good standing of the Trust
obtained as of a recent date from the State Office. In such examinations, we
have assumed the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as drafts or copies or forms of
documents to be executed and the legal capacity of natural persons to complete
the execution of documents. We have further assumed for purposes of this
opinion: (i) the due formation or organization, valid existence and good
standing of each entity (other than the Trust) that is a party to any of the
documents reviewed by us under the laws of the jurisdiction of its respective
formation or organization; (ii) the due authorization, execution and delivery
by, or on behalf of, each of the parties thereto of the above referenced
documents with respect to the Trust; (iii) that the Company, the Administrative
Trustees, the Property Trustee, the Delaware Trustee and each other party
thereto will duly authorize, execute and deliver the Governing Instrument, the
Underwriting Agreement and all other documents contemplated thereby or by the
Registration Statement to be executed in connection with the issuance by the
Trust of Preferred Securities, prior to the first issuance of Preferred
Securities; (iv) that the Preferred Securities will be offered and sold
pursuant to the Registration Statement and a prospectus supplement that will be
consistent with, and accurately describe, the terms of the Governing Instrument
and the Guarantee Agreement and all other relevant documents; (v) that no event
has occurred subsequent to the filing of the Certificate, or will occur prior
to the issuance by the Trust of Preferred Securities, that would cause a
dissolution or liquidation of the Trust under the Original Governing Instrument
or the Governing Instrument; (vi) that the activities of the Trust have been
and will be conducted in accordance with the Original Governing Instrument or
the Governing Instrument, as applicable, and the Delaware Business Trust Act,
12 Del. C. Sections 3801 et seq. (the "Delaware Act"); (vii) that each Holder
of Preferred Securities has, or prior to the first issuance of Preferred
Securities will have, made payment of the required consideration therefor and
received a Preferred Securities Certificate in consideration thereof in
accordance with the terms and conditions of the Governing Instrument, the
Registration Statement, the prospectus supplement and the Underwriting
Agreement and that the Preferred Securities are otherwise issued and sold in
accordance with the terms, conditions, requirements and procedures set forth in
the Governing Instrument, the Registration Statement, the prospectus supplement
and the Underwriting Agreement; and (viii) that the documents examined by us
are in full force and effect, express the entire understanding of the parties
thereto with respect to the subject matter thereof and have not been amended,
supplemented or otherwise modified, except as herein referenced. No opinion is
expressed with respect to the requirements of, or compliance with, federal or
state securities or blue sky laws. We have not participated in the preparation
of the Registration Statement or any other offering material relating to the
Preferred Securities, and we assume no responsibility for their contents. As
to any fact material to our opinion, other than those assumed, we have relied
without independent investigation on the above referenced documents and
certificates and on the accuracy, as of the date hereof, of the matters therein
contained.
<PAGE> 3
TXI Capital Trust I
c/o Texas Industries, Inc.
May ___, 1998
Page 3
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that:
1. The Trust is a duly created and validly existing
statutory business trust in good standing under the laws of the State of
Delaware.
2. The Preferred Securities, upon issuance, will
constitute validly issued and, subject to the qualifications set forth in
paragraph 3 below, fully paid and non-assessable beneficial interests in the
assets of the Trust.
3. Under the Delaware Act and the terms of the Governing
Instrument, each Preferred Security Holder, in such capacity, will be entitled
to the same limitation of personal liability as that extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware; provided, however, we express no opinion with respect
to the liability of any Preferred Security Holder who is, was or may become a
named Trustee of the Trust. We note that pursuant to the Governing Instrument,
Preferred Security Holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name under the heading
"LEGAL MATTERS" in the Prospectus forming a part thereof. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Commission thereunder. This
opinion speaks only as of the date hereof and is based on our understandings
and assumptions as to present facts, and on our review of the above referenced
documents and the application of Delaware law as the same exist as of the date
hereof, and we undertake no obligation to update or supplement this opinion
after the date hereof for the benefit of any person or entity with respect to
any facts or circumstances that may hereafter come to our attention or any
changes in facts or law that may hereafter occur or take effect. This opinion
is intended solely for the benefit of the addressee hereof in connection with
the matters contemplated hereby and may not be relied on by any other person or
entity or for any other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
<PAGE> 1
EXHIBIT 12
Texas Industries, Inc.
Computation of Ratio of Earnings to Fixed Charges
(In thousands except for ratios)
<TABLE>
<CAPTION>
Nine Months Ended
Fiscal Years Ended May 31, February 28,
-------------------------------------- -----------------------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings before income taxes
from continuing operations.... $ 411 $40,410 $73,717 $127,210 $116,663 $74,680 $102,040
Add: Fixed charges............. 35,781 29,551 24,131 25,434 24,797 18,216 21,199
Less: Interest capitalized
Earnings.................... -- -- -- -- 190 -- 2,055
------- ------- ------- ------- -------- ------- --------
36,172 69,961 97,848 152,644 141,270 92,896 121,184
Fixed Charges:
Interest....................... 32,596 26,231 20,117 19,960 19,075 14,165 16,472
Portion of rental expense
representative of the
interest factor(1)............ 3,185 3,320 4,014 5,474 5,722 4,051 4,727
------- ------- ------- ------- -------- ------- --------
Total Fixed Charges......... $35,781 $29,551 $24,131 $25,434 $ 24,797 $18,216 $ 21,199
Ratio of Earnings to Fixed
Charges....................... 1.01 2.37 4.05 6.00 5.70 5.10 5.72
</TABLE>
(1) For purposes of calculating fixed charges, an interest factor of 1/3 was
applied to total rent expense for the period indicated.
<PAGE> 1
EXHIBIT 15
We are aware of the incorporation by reference in the Registration Statement of
Texas Industries, Inc. for the registration of shares of Convertible Trust
Preferred Securities of our reports dated September 16, 1997, December 15,
1997, and March 20, 1998 relating to the unaudited condensed consolidated
interim financial statements of Texas Industries, Inc. that are included in its
Forms 10-Q for the quarters ended August 31, 1997, November 30, 1997 and
February 28, 1998.
/s/ ERNST & YOUNG LLP
Dallas, Texas
May 21, 1998
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement and related Prospectus of Texas Industries, Inc. for the
registration of shares of Convertible Trust Preferred Securities and to the
inclusion of our report dated July 8, 1997, with respect to the consolidated
financial statements of Texas Industries, Inc. included in its Annual Report
(Form 10-K) for the year ended May 31, 1997, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
Dallas, Texas
May 21, 1998
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
-------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-------------
Texas Industries, Inc.
(Exact name of obligor as specified in its charter)
Delaware 75-0832210
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1341 West Mockingbird Lane
Dallas, Texas 75247-6913
(Address of principal executive offices) (Zip Code)
Debt Securities
Guarantees of Trust Preferred Securities
(Title of Indenture Securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.; Federal Deposit
Insurance Corporation, Washington, D.C.; and The Board of Governors of
the Federal Reserve System, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 26th day of May, 1998.
The First National Bank of Chicago,
Trustee
BY /s/ SANDRA L. CARUBA
-------------------------------
Sandra L. Caruba
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica Inc., filed with the Securities and Exchange Commission on October
2, 1996 (Registration No. 333-14201).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
May 26, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the indenture between Texas Industries,
Inc. and The First National Bank of Chicago, as Trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ SANDRA L. CARUBA
----------------------------------
Sandra L. Caruba
Vice President
4
<PAGE> 5
EXHIBIT 7
<TABLE>
<S> <C> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
C400
Dollar Amounts -------
in Thousands RCFD BIL MIL THOU
-------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1) ......... 0081 4,267,336 1.a.
b. Interest-bearing balances(2) .................................. 0071 6,893,837 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) .... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) .. 1773 5,691,722 2.b.
3. Federal funds sold and securities purchased under agreements to
resell 1350 6,339,940 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) ............................................................ RCFD 2122 25,202,984 4.a.
b. LESS: Allowance for loan and lease losses ..................... RCFD 3123 419,121 4.b.
c. LESS: Allocated transfer risk reserve ......................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) ............................. 2125 24,783,863 4.d.
5. Trading assets (from Schedule RC-D) .............................. 3545 6,703,332 5.
6. Premises and fixed assets (including capitalized leases) ......... 2145 743,426 6.
7. Other real estate owned (from Schedule RC-M) ..................... 2150 7,727 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) ................................... 2130 134,959 8.
9. Customers' liability to this bank on acceptances outstanding ..... 2155 644,340 9.
10. Intangible assets (from Schedule RC-M) ........................... 2143 268,501 10.
11. Other assets (from Schedule RC-F) ................................ 2160 2,004,432 11.
12. Total assets (sum of items 1 through 11) ......................... 2170 58,483,415 12.
</TABLE>
____________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Schedule RC--Continued
<TABLE>
<CAPTION>
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) ......................... RCON 2200 21,756,846 13.a.
(1) Noninterest-bearing(1) .......................... RCON 6631 9,197,227 13.a.1
(2) Interest-bearing ................................ RCON 6636 559,619 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries,
and IBFs (from Schedule RC-E, part II) .............. RCFN 2200 14,811,410 13.b.
(1) Noninterest-bearing ............................. RCFN 6631 332,801 13.b.1
(2) Interest-bearing ................................ RCFN 6636 14,478,609 13.b.2
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic ................... RCFD 2800 4,535,422 14
15. a. Demand notes issued to the U.S. Treasury ............ RCON 2840 43,763 15.a
b. Trading liabilities (from Schedule RC-D) ............ RCFD 3548 6,523,239 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less ....... RCFD 2332 1,360,165 16.a
b. With a remaining maturity of more than one year
through three years ................................. A547 576,492 16.b
c. With a remaining maturity of more than three years .. A548 703,981 16.c
17. Not applicable
18. Bank's liability on acceptances executed and
outstanding ............................................ RCFD 2920 644,341 18
19. Subordinated notes and debentures (2) .................. RCFD 3200 1,700,000 19
20. Other liabilities (from Schedule RC-G) ................. RCFD 2930 1,322,077 20
21. Total liabilities (sum of items 13 through 20) ......... RCFD 2948 53,987,736 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus .......... RCFD 3838 0 23
24. Common stock ........................................... RCFD 3230 200,858 24
25. Surplus (exclude all surplus related to preferred
stock).................................................. RCFD 3839 2,999,001 25
26. a. Undivided profits and capital reserves .............. RCFD 3632 1,273,239 26.a.
b. Net unrealized holding gains (losses) on available-
for-sale securities ................................. RCFD 8434 24,096 26.b.
27. Cumulative foreign currency translation adjustments .... RCFD 3284 (1,515) 27
28. Total equity capital (sum of items 23 through 27) ...... RCFD 3210 4,495,679 28
29. Total liabilities and equity capital (sum of items 21
and 28) ................................................ RCFD 3300 58,483,415 29
</TABLE>
<TABLE>
<S> <C> <C> <C>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the
statement below that best describes the most
comprehensive level of auditing work performed for the Number
bank by independent external auditors as of any date ------
during 1996 ............................................ RCFD 6724 N/A M.1
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state
chartering authority)
</TABLE>
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
<PAGE> 1
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
-------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-------------
TXI Capital Trust I
(Exact name of obligor as specified in its charter)
Delaware
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
1341 West Mockingbird Lane
Dallas, Texas 75247-6913
(Address of principal executive offices) (Zip Code)
Trust Preferred Securities
(Title of Indenture Securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.; Federal Deposit
Insurance Corporation, Washington, D.C.; and The Board of Governors of
the Federal Reserve System, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the trustee now in
effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 26th day of May, 1998.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
BY /s/ SANDRA L. CARUBA
-------------------------------
SANDRA L. CARUBA
VICE PRESIDENT
* EXHIBIT 1, 2, 3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS
BEARING IDENTICAL NUMBERS IN ITEM 16 OF THE FORM T-1 OF THE FIRST NATIONAL BANK
OF CHICAGO, FILED AS EXHIBIT 25.1 TO THE REGISTRATION STATEMENT ON FORM S-3 OF
SUNAMERICA INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER
2, 1996 (REGISTRATION NO. 333-14201).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
May 26, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the indenture between TXI Capital Trust
I and The First National Bank of Chicago, as Trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ SANDRA L. CARUBA
----------------------------------
SANDRA L. CARUBA
VICE PRESIDENT
4
