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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
VANSTAR FINANCING TRUST
DATED AS OF OCTOBER 2, 1996
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TABLE OF CONTENTS
PAGE
ARTICLE I - INTERPRETATION AND DEFINITIONS. . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Definitions.. . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - TRUST INDENTURE ACT. . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.1 Trust Indenture Act; Application. . . . . . . . . . . . . 8
SECTION 2.2 Lists of Holders of Securities. . . . . . . . . . . . . . 8
SECTION 2.3 Reports by the Property Trustee.. . . . . . . . . . . . . 9
SECTION 2.4 Periodic Reports to Property Trustee. . . . . . . . . . . 9
SECTION 2.5 Evidence of Compliance with Conditions Precedent. . . . . 9
SECTION 2.6 Events of Default; Waiver.. . . . . . . . . . . . . . . . 9
SECTION 2.7 Event of Default; Notice. . . . . . . . . . . . . . . . . 11
ARTICLE III - ORGANIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.1 Name. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.2 Office. . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.3 Purpose.. . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.4 Authority.. . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.5 Title to Property of the Trust. . . . . . . . . . . . . . 13
SECTION 3.6 Powers and Duties of the Regular Trustees . . . . . . . . 13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees. . . 16
SECTION 3.8 Powers and Duties of the Property Trustee.. . . . . . . . 17
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.10 Certain Rights of Property Trustee. . . . . . . . . . . . 20
SECTION 3.11 Delaware Trustee. . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.12 Not Responsible for Recitals or Issuance of Securities. . 22
SECTION 3.13 Duration of Trust . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.14 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.15 Filing of Amendments to Certificate of Trust. . . . . . . 24
ARTICLE IV - SPONSOR AND THE DEBENTURE ISSUER . . . . . . . . . . . . . . . . 24
SECTION 4.1 Sponsor's Purchase of Common Securities.. . . . . . . . . 24
SECTION 4.2 Responsibilities of the Debenture Issuer. . . . . . . . . 24
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE V - TRUSTEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.1 Number of Trustees. . . . . . . . . . . . . . . . . . . . 25
SECTION 5.2 Delaware Trustee. . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.3 Property Trustee; Eligibility.. . . . . . . . . . . . . . 26
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally. . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.5 Initial Trustees. . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.6 Appointment, Removal and Resignation of Trustees. . . . . 27
SECTION 5.7 Vacancies among Trustees. . . . . . . . . . . . . . . . . 28
SECTION 5.8 Effect of Vacancies.. . . . . . . . . . . . . . . . . . . 29
SECTION 5.9 Meetings. . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.10 Delegation of Power . . . . . . . . . . . . . . . . . . . 29
SECTION 5.11 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VI - DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.1 Distributions.. . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII - ISSUANCE OF SECURITIES. . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.1 General Provisions Regarding Securities.. . . . . . . . . 30
SECTION 7.2 Execution and Authentication. . . . . . . . . . . . . . . 31
SECTION 7.3 Form and Dating.. . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.4 Registrar, Paying Agent and Conversion Agent. . . . . . . 33
SECTION 7.5 Paying Agent to Hold Money in Trust.. . . . . . . . . . . 34
SECTION 7.6 Replacement Securities. . . . . . . . . . . . . . . . . . 34
SECTION 7.7 Outstanding Preferred Securities. . . . . . . . . . . . . 35
SECTION 7.8 Preferred Securities in Treasury. . . . . . . . . . . . . 35
SECTION 7.9 Temporary Securities; Rule 144A Global Preferred
Securities . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.10 Cancellation. . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE VIII - DISSOLUTION OF TRUST . . . . . . . . . . . . . . . . . . . . . 36
SECTION 8.1 Dissolution of Trust . . . . . . . . . . . . . . . . . . . 36
ARTICLE IX - TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.1 General . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.2 Transfer Procedures and Restrictions. . . . . . . . . . . 38
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TABLE OF CONTENTS
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PAGE
SECTION 9.3 Deemed Security Holders.. . . . . . . . . . . . . . . . . 46
SECTION 9.4 Book Entry Interests. . . . . . . . . . . . . . . . . . . 46
SECTION 9.5 Notices to Clearing Agency. . . . . . . . . . . . . . . . 47
SECTION 9.6 Appointment of Successor Clearing Agency. . . . . . . . . 47
ARTICLE X - LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS. . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.1 Liability . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.3 Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.4 Indemnification . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.5 Outside Businesses. . . . . . . . . . . . . . . . . . . . 51
ARTICLE XI - ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.2 Certain Accounting Matters. . . . . . . . . . . . . . . . 52
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.4 Withholding . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE XII - AMENDMENTS AND MEETINGS . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.1 Amendments. . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
Consent. . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE XIII - REPRESENTATIONS OF PROPERTY TRUSTEE AND
DELAWARE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 13.1 Representations and Warranties of Property Trustee. . . . 56
SECTION 13.2 Representations and Warranties of Delaware Trustee. . . . 57
ARTICLE XIV - REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 14.1 Registration Rights . . . . . . . . . . . . . . . . . . . 58
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE XV - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 15.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 15.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 15.3 Intention of the Parties. . . . . . . . . . . . . . . . . 60
SECTION 15.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 15.5 Successors and Assigns. . . . . . . . . . . . . . . . . . 60
SECTION 15.6 Partial Enforceability. . . . . . . . . . . . . . . . . . 61
SECTION 15.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 61
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
VANSTAR FINANCING TRUST
OCTOBER 2, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of October 2, 1996, by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Vanstar
Corporation, a Delaware corporation, as trust sponsor (the "Sponsor"), and by
the holders, from time to time, of undivided beneficial interests in the
Trust issued pursuant to this Declaration.
WHEREAS, the Trustees and the Sponsor established Vanstar Financing
Trust (the "Trust"), a trust under the Business Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of September 25, 1996 (the
"Original Declaration") and a Certificate of Trust filed with the Secretary
of State of the State of Delaware on September 25, 1996 for the sole purpose
of issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures (as defined herein) of the Debenture Issuer (as defined
herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 DEFINITIONS.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"ADDITIONAL INTEREST" means, if the Trust is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other taxing authority,
such amounts as shall be required so that the net amounts received and retained
by the Trust after paying such taxes, duties, assessments and governmental
charges will not be less than the amounts the Trust would have received had no
such taxes, duties, assessments or governmental charges been imposed.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"AGENT" means any Registrar, Paying Agent, Conversion Agent or co-
registrar.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized to
bind such Person.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Depositary as described in Section 9.4.
"BUSINESS DAY" means any day other than a day on which banking institutions
in New York, New York, San Francisco, California or in Wilmington, Delaware are
authorized or required by law to close.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware Code,
12 DEL. CODE Section 3801 ET SEQ., as it may be amended from time to time, or
any successor legislation.
"CERTIFICATE" means a certificate in global or definitive form representing
a Common Security or a Preferred Security.
"CLEARING AGENCY" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act.
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"CLOSING DATE" means October 2, 1996.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES" has the meaning specified in Section 7.1(a).
"COMMON SECURITIES GUARANTEE" means the guarantee agreement dated as of
October 2, 1996, of the Sponsor in respect of the Common Securities.
"COMPANY" means the Sponsor.
"COMPANY INDEMNIFIED PERSON" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"COMPOUNDED INTEREST" means interest compounded quarterly at the rate
specified for the Debentures, to the extent permitted by applicable law, upon
interest accrued and unpaid (including Additional Interest and Liquidated
Damages) at the end of each Extension Period.
"CONVERSION AGENT" has the meaning specified in Section 7.4.
"COVERED PERSON" means (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) any of the
Trust's Affiliates; and (b) any Holder of Securities.
"DEBENTURE ISSUER" means the Sponsor in its capacity as issuer of the
Debentures under the Indenture.
"DEBENTURE TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"DEBENTURES" means the series of Convertible Subordinated Debentures to be
issued by the Debenture Issuer under the Indenture to be held by the Property
Trustee, a specimen certificate for such series of Debentures being Exhibit B.
"DEFINITIVE PREFERRED SECURITIES" means the Regulation S Definitive
Preferred Security, the Restricted Definitive Preferred Security and any other
Preferred Securities in definitive form issued by the Trust.
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"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEPOSITARY" means The Depository Trust Company, the initial Clearing
Agency.
"DISTRIBUTION" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"EFFECTIVENESS PERIOD" has the meaning specified in Section 14.1.
"EVENT OF DEFAULT" in respect of the Securities means an Event of Default
(as defined in the Indenture) has occurred and is continuing in respect of the
Debentures.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"EXCHANGED GLOBAL PREFERRED SECURITIES" shall have the meaning set forth in
Section 9.2(b).
"EXCHANGED PREFERRED SECURITIES" means any Preferred Security issued in
connection with a sale pursuant to an effective Shelf Registration Statement and
not bearing any Restricted Securities Legend.
"FIDUCIARY INDEMNIFIED PERSON" has the meaning set forth in
Section 10.4(b).
"GLOBAL CERTIFICATE" means a fully registered global certificate
representing undivided interests in the Preferred Securities in which the
interests therein are registered on a book entry basis.
"HOLDER" means a Person in whose name a Certificate representing a Security
is registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"INDEMNIFIED PERSON" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"INDENTURE" means the Indenture dated as of October 2, 1996, between the
Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued.
"INITIAL PURCHASERS" has the meaning set forth in the Purchase Agreement.
"INVESTMENT COMPANY" means an investment company as defined in the
Investment Company Act.
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"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"INVESTMENT COMPANY EVENT" has the meaning set forth in the terms of the
Securities as set forth in Annex I hereto.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"LIQUIDATED DAMAGES" means the additional interest which shall accrue on
the Debentures and, accordingly on the Preferred Securities, if, (i) on or prior
to 75 days following the date of original issuance of the Preferred Securities,
a Shelf Registration Statement has not been filed with the Commission, or
(ii) on or prior to the 135th day following the issuance of Registrable
Securities (as defined in Section 14.1 herein), such Registration Statement is
not declared effective.
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"MINISTERIAL ACTION" has the meaning set forth in the terms of the
Securities as set forth in Annex I hereto.
"OFFERING CIRCULAR" means the confidential offering circular, dated as of
September 26, 1996, relating to the issuance by the Trust of Preferred
Securities, as amended or supplemented from time to time.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
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(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"PARTICIPANTS" has the meaning set forth in Section 7.3(b).
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PAYMENT AMOUNT" shall have the meaning set forth in Section 6.1.
"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.
"PREFERRED SECURITIES" has the meaning specified in Section 7.1(a).
"PREFERRED SECURITIES GUARANTEE" means the guarantee agreement dated as of
October 2, 1996, of the Sponsor in respect of the Preferred Securities.
"PREFERRED SECURITY BENEFICIAL OWNER" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Depositary, or on the books of a Person
maintaining an account with such Depositary (directly as a Participant or as an
indirect Participant, in each case in accordance with the rules of such
Depositary).
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility requirements
set forth in Section 5.3.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in Section 3.8(c)(i).
"PURCHASE AGREEMENT" shall have the meaning set forth in Section 7.3(a).
"QUORUM" means a majority of the Regular Trustees or, if there are only two
Regular Trustees, both of them.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated October 2, 1996, among the Debenture Issuer, the Trust, and the Initial
Purchasers named in the Purchase Agreement.
"REGISTRAR" has the meaning set forth in Section 7.4.
"REGULAR TRUSTEE" means any Trustee other than the Property Trustee, the
Guarantee Trustee and the Delaware Trustee.
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"REGULATION S DEFINITIVE PREFERRED SECURITY" has the meaning set forth in
Section 7.3(c).
"RELATED PARTY" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"RESPONSIBLE OFFICER" means, with respect to the Property Trustee, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer
in the Corporate Trust Department of the Property Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"RESTRICTED DEFINITIVE PREFERRED SECURITY" has the meaning set forth in
Section 7.3(c).
"RESTRICTED PERIOD" means the one-year period following the last issue date
for the Preferred Securities (including Preferred Securities issued to cover
over allotments and Common Securities issued in connection with related capital
contributions). The Sponsor shall inform the Trustee as to the termination of
the restricted period and the Trustee may rely conclusively thereon.
"RESTRICTED PREFERRED SECURITIES" shall include the Regulation S Definitive
Preferred Securities, the Restricted Definitive Preferred Securities and the
Rule 144A Global Preferred Securities.
"RULE 144A GLOBAL PREFERRED SECURITY" has the meaning set forth in
Section 7.3(a).
"RULE 3a-5" means Rule 3a-5 under the Investment Company Act.
"SECURITIES" means the Common Securities and the Preferred Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"SECURITIES CUSTODIAN" means the custodian with respect to the Rule 144A
Global Preferred Security and any other Preferred Security in global form.
"SHELF REGISTRATION STATEMENT" has the meaning specified in Section 14.1.
"SPECIAL EVENT" has the meaning set forth in Annex I hereto.
"SPONSOR" means Vanstar Corporation, a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
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"SUPER MAJORITY" has the meaning set forth in Section 2.6(a)(ii).
"TAX EVENT" has the meaning set forth in Annex I hereto.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as provided in
the terms of the Preferred Securities or by the Trust Indenture Act, Holders of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities, voting separately as a class, who are the record owners of
10% or more of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"TREASURY REGULATIONS" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"TRUSTEE" or "TRUSTEES" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"UNRESTRICTED DEFINITIVE PREFERRED SECURITY" has the meaning set forth in
Section 9.2(c).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration, which are incorporated by
reference in and made part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act.
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(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Debenture Issuer and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, PROVIDED that neither the
Debenture Issuer nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Property Trustee by
the Debenture Issuer and the Regular Trustees on behalf of the Trust, and
(ii) at any other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity), PROVIDED that the Property Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Property Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
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Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, PROVIDED that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to be
waived under the Indenture, the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant required Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising exclusively therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or an Event of Default with respect to the
Preferred Securities or impair any right consequent thereon. Any waiver by the
Holders of the Preferred Securities of an Event of Default with respect to the
Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, PROVIDED that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
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(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be waived
by the vote of the Holders of at least the proportion in liquidation amount
of the Common Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
PROVIDED further, that each Holder of Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with respect
to the Common Securities and its consequences until all Events of Default
with respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the Holders of the Preferred Securities and only the Holders of
the Preferred Securities will have the right to direct the Property Trustee
in accordance with the terms of the Securities. The foregoing provisions of
this Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
Subject to the foregoing provisions of this Section 2.6(b), upon such
waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration.
The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such defaults have been cured before the giving of such notice (the
term "defaults" for the purposes of this Section 2.7(a) being hereby defined
to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment
of principal of (or premium, if any) or interest on any of the Debentures or
in the payment of any sinking fund installment established for the
Debentures, the Property Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or
a trust committee of directors and/or Responsible Officers of the Property
Trustee
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in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 501(l) and 501(2) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the Property
Trustee charged with the administration of the Declaration shall have actual
knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "Vanstar Financing Trust," as such name may be
modified from time to time by the Regular Trustees following written notice
to the Holders of Securities. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o Vanstar
Corporation, 0000 Xxxx Xxx Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxx
00000-0000, Attention: Chief Financial Officer. At any time, the Regular
Trustees may designate another principal office.
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only
those other activities necessary or incidental thereto including, without
limitation, the execution and performance of those documents, instruments and
agreements necessary to effectuate the transactions contemplated hereby. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.
SECTION 3.4 AUTHORITY.
(a) Subject to the limitations provided for in this Declaration and to
the specific duties of the Property Trustee, any Regular Trustee shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by any Regular Trustee in accordance with the powers granted to
each of the Regular Trustees under this Declaration shall constitute the act
of
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and serve to bind the Trust and an action taken by the Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf
of the Trust, no person shall be required to inquire into the authority of
the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth
in this Declaration.
(b) Unless this Declaration requires a specific vote or consent of the
Regular Trustees or if the Regular Trustees in their discretion determine to
require a vote or consent on such matter, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless this Declaration requires a specific vote or consent of the
Regular Trustees or if the Regular Trustees in their discretion determine to
require a vote or consent on such matter, and except as otherwise required by
the Business Trust Act or applicable law, any Regular Trustee is authorized
to execute on behalf of the Trust any documents which the Regular Trustees
have the power and authority to cause the Trust to execute pursuant to
Section 3.6, PROVIDED, that the registration statement referred to in Section
3.6, including any amendments thereto, shall be signed by a Regular Trustee,
or if there are more than two, a majority of the Regular Trustees.
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES.
Any of the Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; PROVIDED, however, that the
Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, PROVIDED, FURTHER, that there
shall be no interests in the Trust other than the Securities, and the
issuance of Securities shall be limited to simultaneous issuance of both
Preferred Securities and Common Securities on the Closing Date and any other
date Preferred Securities and Common Securities are sold pursuant to the
over-allotment option granted to the Initial Purchasers in the Purchase
Agreement;
(b) in connection with the issue and sale of the Preferred Securities, at
the direction of the Debenture Issuer, to:
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(i) prepare, execute, and amend and supplement, if necessary,
an offering circular (the "Offering Circular") in preliminary and final form,
in relation to the offering and sale of Preferred Securities to qualified
institutional buyers in reliance on Rule 144A under the Securities Act, to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) and outside the United States to non-U.S.
persons in offshore transactions in reliance on Regulation S under the
Securities Act and to execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement prepared by the Sponsor,
including any amendments and supplements thereto in relation to the resale of
the Preferred Securities;
(ii) execute and file any documents prepared by the Debenture
Issuer, or take any acts as determined by the Debenture Issuer to be
necessary in order to qualify or register all or part of the Preferred
Securities in any State or foreign jurisdiction in which the Debenture Issuer
has determined to qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the PORTAL Market and, at such time as determined by the Sponsor,
to the New York Stock Exchange, Inc. ("NYSE") or any other national stock
exchange or similar organization for listing or quotation of the Preferred
Securities and the common stock issuable on conversion thereof;
(iv) to execute and deliver letters, documents, or instruments
with The Depository Trust Company relating to the Preferred Securities;
(v) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A, including
any amendments thereto, prepared by the Debenture Issuer relating to the
registration of the Preferred Securities and the common stock issuable on
conversion thereof under Section 12(b) of the Exchange Act; and
(vi) execute and enter into, on behalf of the Trust, the
Purchase Agreement, Registration Rights Agreement and other related
agreements and instruments providing for or entered into in connection with
the sale of the Preferred Securities and perform its obligations under such
agreements and instruments;
(c) to acquire as Trust assets the Debentures with the proceeds of the
sale of the Preferred Securities and the Common Securities; PROVIDED,
however, that the Regular Trustees shall cause legal title to the Debentures
to be held of record in the name of the Property Trustee for the benefit of
the Holders of the Preferred Securities and the Holders of the Common
Securities;
(d) to give the Debenture Issuer and the Property Trustee prompt
written notice of the occurrence of a Special Event; PROVIDED that the
Regular Trustees shall consult with the Debenture Issuer and the Property
Trustee before taking or refraining from taking any Ministerial Action in
relation to a Special Event;
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(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of the
Regular Trustees pursuant to the terms o fthe Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust or seek reimbursement from the Debenture Issuer;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of an election by the Debenture
Issuer to defer payments of interest on the Debentures by extending the
interest payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing and the transactions contemplated
thereby;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust
was created;
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(p) to take any action ( provided that such action does not adversely
affect the interests of Holders), not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as
set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and timely filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the
Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
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(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Securities;
or
(vii) other than as provided in this Declaration or Annex
I hereto, (A) direct the time, method and place of exercising any trust or
power conferred upon the Debenture Trustee with respect to the Debentures,
(B) waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion of
counsel to the effect that such modification will not cause more than an
insubstantial risk that (x) the Trust will be deemed an Investment Company
required to be registered under the Investment Company Act, or (y) for United
States federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.6.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Property Trustee does not act as the Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the Property
Trustee Account and make payments to the Holders of the Preferred Securities
and Holders of the Common Securities from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee Account shall be
held uninvested until disbursed in accordance with this Declaration. The
Property Trustee Account shall be an account that is maintained with a
banking institution the rating on whose long-term unsecured indebtedness is
at
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least equal to the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization," as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as so directed and
as shall be necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the extent the Debentures
are redeemed or mature; and
(iii) upon written notice of a distribution issued by the
Regular Trustees in accordance with the terms of the Securities, engage in
such ministerial activities as so directed as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain Special Events arising from a
change in law or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms
of the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with (i) an Event of Default of which a Responsible
Officer of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Declaration or the Trust
Indenture Act.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer
of the Property Trustee occurs and is continuing, the Property Trustee shall,
for the benefit of Holders of the Securities, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) The Property Trustee (or any of its affiliates so designated by it)
will act as Paying Agent and Registrar in New York (each, a "Paying Agent")
to pay Distributions, redemption payments or liquidation payments on behalf
of the Trust with respect to all securities and any such Paying Agent shall
comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent may
be removed by the Property Trustee at any time and a successor Paying Agent
or additional Paying Agents may be appointed at any time by the Property
Trustee.
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(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this Section
3.8 in a manner that is consistent with the purposes and functions of the
Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6) of which a Responsible
Officer of the Property Trustee has actual knowledge, the Property Trustee
shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this Declaration and
the Property Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Declaration, and
no implied covenants or obligations shall be read into this Declaration
against the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Property Trustee and conforming
to the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Property Trustee, the Property Trustee shall
be under a duty to examine the same to determine whether or not they conform
to the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made or in
taking or omitting to take the pertinent action;
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(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property Trustee
under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded to
the Property Trustee under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree in
writing with the Debenture Issuer. Money held by the Property Trustee need
not be segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Debenture Issuer
with their respective duties under this Declaration, nor shall the Property
Trustee be liable for any default or misconduct of the Regular Trustees or
the Debenture Issuer.
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Property 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 believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
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(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently evidenced by
an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall reasonably deem it desirable that a matter be proved
or established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing
or continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its
choice or other experts and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such expert's
area of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Debenture Issuer or any of its Affiliates, and may include any
of its employees. The Property Trustee shall have the right at any time to
seek instructions concerning the administration of this Declaration from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at the
request or direction of any Holder, unless such Holder shall have provided to
the Property Trustee adequate security and indemnity, reasonably satisfactory
to the Property Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Property Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Property Trustee, PROVIDED that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, security, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
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(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Property Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property
Trustee shall be construed to be a duty.
SECTION 3.11 DELAWARE TRUSTEE.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness.
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The Trustees make no representations as to the value or condition of the
property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
SECTION 3.13 DURATION OF TRUST.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall exist until October 1, 2025, PROVIDED that such date may be
extended to the extent necessary to permit the winding up of the affairs of
the Trust.
SECTION 3.14 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other entity or body,
except as described in Section 3.14(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees, and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Property Trustee, consolidate, amalgamate, merge with or into, or be replaced
by a trust organized as such under the laws of any State of the United
States; PROVIDED that:
(i) if the Trust is not the survivor, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Declaration and the 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 with respect to Distributions, assets and payments upon
liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly agrees that a trustee of
the Successor Entity that possesses the same powers and duties as the
Property Trustee may act as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with another organization on
which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor Securities)
to be downgraded by any nationally recognized statistical rating organization;
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(v) such merger, consolidation, amalgamation or replacement
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 Successor Entity);
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) the Company guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee; and
(viii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust, reasonably acceptable to the Property
Trustee, experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement will not adversely affect the rights, preferences and privileges
of the Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, consolidation, amalgamation
or replacement, neither the Trust nor the Successor Entity will be required
to register as an Investment Company; and
(C) following such merger, consolidation, amalgamation
or replacement, the Trust (or the Successor Entity) will be treated as a
grantor trust for United States federal income tax purposes.
(c) Notwithstanding Section 3.14(b), the Trust shall not, except with
the consent of the Holders of 100% in liquidation amount of the Common
Securities, consolidate, amalgamate, merge with or into, or be replaced by
any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as
other than a grantor trust for United States federal income tax purposes.
SECTION 3.15 FILING OF AMENDMENTS TO CERTIFICATE OF TRUST.
The Certificate of Trust as filed with the Secretary of State of the
State of Delaware on September 25, 1996 is attached hereto as Exhibit E. On
or after the date of execution of this Declaration, the Trustees shall cause
the filing with the Secretary of State of the State of Delaware of such
amendments to the Certificate of Trust as the Trustees deem necessary or
desirable to reflect this Declaration.
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ARTICLE IV
SPONSOR AND THE DEBENTURE ISSUER
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date and on any other date Preferred Securities and
Common Securities are sold pursuant to the over-allotment option granted in
the Purchase Agreement, the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 RESPONSIBILITIES OF THE DEBENTURE ISSUER.
In connection with the issue and sale of the Preferred Securities, the
Debenture Issuer shall have the exclusive right and responsibility to engage
in the following activities:
(a) to prepare the Offering Circular and any amendment thereto and to
prepare for filing by the Trust with the Commission the Shelf Registration
Statement, including any amendments thereto;
(b) to determine the States and foreign jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than actions that
must be taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and filed by
the Trust, as the Debenture Issuer deem necessary or advisable in order to
comply with the applicable laws of any such States and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to PORTAL and to
the NYSE or any other national stock exchange or automated quotation system
for listing or quotation of the Preferred Securities and the Common Stock
issuable on conversion;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities and the common stock issuable on conversion under
Section 12(b) of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Purchase Agreement, Registration
Rights Agreement and other related agreements providing for the sale of the
Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
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The number of Trustees shall be three (3), one of which shall initially be
a Regular Trustee, and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders
of the Common Securities;
PROVIDED, however, that the number of Trustees shall in no event be less than
three (3); PROVIDED FURTHER that (1) one Trustee, the Delaware Trustee, shall
be a Person who, in the case of a natural person, is a resident of the State
of Delaware or that, if not a natural person, is an entity which has its
principal place of business in the State of Delaware; (2) there shall be at
least one Regular Trustee who is an employee or officer of, or is affiliated
with the Sponsor; and (3) one Trustee shall be the Property Trustee for so
long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if
it meets the applicable requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law,
PROVIDED that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) not be an Affiliate of the Debenture Issuer;
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Commission to
act as an institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a
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combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-5 and to the extent Rule 3a-5
requires a trustee having certain qualifications to hold title to the
"eligible assets" of the trust, the Property Trustee shall possess those
qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a) or 5.3(c), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c) and
5.6(d).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Property Trustee and the Holder of the Common Securities (as if it were
the obligor referred to in Section 310(b) of the Trust Indenture Act) shall
in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be set forth in Section 5.5
hereof.
SECTION 5.4 QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who
is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 INITIAL TRUSTEES.
(a) The initial Regular Trustee shall be:
Xxxx X. Xxxxxxx, Xx.
The initial Delaware Trustee shall be:
Wilmington Trust Company
The initial Property Trustee shall be:
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Xxxxxxxxxx Xxxxx Company
SECTION 5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by the vote of the
Holders of a Majority in liquidation amount of the Common Securities.
(b) (i) The Trustee that acts as Property Trustee shall not
be removed in accordance with Section 5.6(a) until a Successor Property
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2
and 5.4 (a "Successor Delaware Trustee") has been appointed and has accepted
such appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered
to the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; PROVIDED, however,
that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the resigning
Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee has
been appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the Sponsor and
the resigning Delaware Trustee.
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(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee, Successor Delaware Trustee,
or, if there is one Regular Trustee, a Regular Trustee, as the case may be,
if the Property Trustee or the Delaware Trustee or such sole Regular Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery pursuant to this Section 5.6 of an
instrument of resignation or removal, the Property Trustee or Delaware
Trustee resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with
a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee
shall not operate to annul the Trust. Whenever a vacancy in the number of
Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 5.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.9 MEETINGS.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Regular Trustees or any
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committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
24 hours before a meeting. Notices shall contain a brief statement of the
time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute
a waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any
activity on the ground that the meeting has not been lawfully called or
convened. If this Declaration requires a specific vote or consent of the
Regular Trustees or if the Regular Trustees in their discretion determine to
require a vote on any matter, such action of the Regular Trustees may be
taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the
unanimous written consent of the Regular Trustees. Subject to any specific
requirement in this Declaration that requires a vote of the Regular Trustees,
nothing in this section shall be deemed to restrict the authority granted to
any Regular Trustee pursuant to Section 3.4 of this Declaration.
SECTION 5.10 DELEGATION OF POWER.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in
Section 3.6(b), including any registration statement or amendment thereto
filed with the Commission, or making any other governmental filing; and
(b) The Regular Trustees shall have power to delegate from time to time
to such of their number or to officers of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law
or contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Property Trustee or the Delaware Trustee,
as the case may be, may be merged or converted or with which either may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, as the case may be, hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, unless otherwise required by the Business Trust
Act.
ARTICLE VI
DISTRIBUTIONS
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SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Preferred Securities and the Common Securities in
accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes payment of interest (including
Compounded Interest (as defined in the Indenture), Additional Interest (as
defined in the Indenture) and Liquidated Damages), premium and/or principal
on the Debentures held by the Property Trustee (the amount of any such
payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall, on behalf of the Trust, issue one class
of convertible preferred securities, representing undivided beneficial
interests in the assets of the Trust (the "Preferred Securities"), having
such terms (the "Terms") as are set forth in Annex I and one class of
convertible common securities, representing undivided beneficial interests in
the assets of the Trust (the "Common Securities"), having such terms as are
set forth in Annex I. The Trust shall issue no securities or other interests
in the assets of the Trust other than the Preferred Securities and the Common
Securities. The Trust shall issue no Securities in bearer form.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
nonassessable.
(d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and
shall be bound by, this Declaration.
(e) The Securities shall have no preemptive rights.
SECTION 7.2 EXECUTION AND AUTHENTICATION.
(a) The Securities shall be signed on behalf of the Trust by a Regular
Trustee. In case any Regular Trustee of the Trust who shall have signed any
of the Securities shall cease to be such Regular Trustee before the
Securities so signed shall be delivered by the Trust, such Securities
nevertheless may be delivered as though the person who signed such Securities
had not
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ceased to be such Regular Trustee; and any Securities may be signed
on behalf of the Trust by such persons who, at the actual date of execution
of such Security, shall be the Regular Trustees of the Trust, although at the
date of the execution and delivery of the Declaration any such person was not
such a Regular Trustee.
(b) One Regular Trustee shall sign the Preferred Securities for the
Trust by manual or facsimile signature. Unless otherwise determined by the
Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Preferred Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Preferred Securities for original
issue in accordance with paragraph 5 of the Securities. The aggregate number
of Preferred Securities outstanding at any time shall not exceed the number
set forth in the Terms in Annex I hereto except as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so.
Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Debenture Issuer or an
Affiliate thereof.
SECTION 7.3 FORM AND DATING.
The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this
Declaration. Certificates may be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof. The Securities may have
letters, numbers, notations or other marks of identification or designation
and such legends or endorsements required by law, stock exchange rule,
agreements to which the Trust is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Annex I and the forms of Securities
set forth in Exhibits A-1 and A-2 are part of the terms of this Declaration
and to the extent applicable, the Property Trustee and the Sponsor, by their
execution and delivery of this Declaration, expressly agree to such terms and
provisions and to be bound thereby.
(a) GLOBAL SECURITIES. The Preferred Securities are being offered and
sold by the Trust pursuant to a Purchase Agreement relating to the Preferred
Securities, dated September 26, 1996
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among the Trust, the Debenture Issuer and the Initial Purchasers named
therein (the "Purchase Agreement").
Securities offered and sold to Qualified Institutional Buyers ("QIBs")
in reliance on Rule 144A under the Securities Act ("Rule 144A") as provided
in the Purchase Agreement, shall be issued in the form of one or more,
permanent global Securities in definitive, fully registered form without
distribution coupons with the appropriate global legends and Restricted
Securities Legend set forth in Exhibit A-1 hereto (each, a "Rule 144A Global
Preferred Security"), which shall be deposited on behalf of the purchasers of
the Preferred Securities represented thereby with the Property Trustee, at
its office or the designated office of one of its affiliates in the City of
New York, as custodian for the Depositary, and registered in the name of a
nominee of the Depositary, duly executed by the Trust and authenticated by
the Property Trustee as hereinafter provided. The number of Preferred
Securities represented by the Rule 144A Global Preferred Security may from
time to time be increased or decreased by adjustments made on the records of
the Property Trustee and the Depositary or its nominee as hereinafter
provided.
(b) BOOK-ENTRY PROVISIONS. This Section 7.3(b) shall apply only to the
Rule 144A Global Preferred Securities and such other Preferred Securities in
global form as may be authorized by the Trust to be deposited with or on
behalf of the Depositary.
The Trust shall execute and the Property Trustee shall, in accordance
with this Section 7.3, authenticate and make available for delivery initially
one or more Rule 144A Global Preferred Securities that (a) shall be
registered in the name of Cede & Co. or another nominee of such Depositary
and (b) shall be delivered by the Property Trustee to such Depositary or
pursuant to such Depositary's written instructions or held by the Property
Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Participants") shall
have no rights under this Declaration with respect to any Rule 144A Global
Preferred Security held on their behalf by the Depositary or by the Property
Trustee as the custodian of the Depositary or under such Rule 144A Global
Preferred Security, other than as pursuant to the terms of any agreement such
Depositary shall have with the Participants, and the Depositary may be
treated by the Trust, the Property Trustee and any agent of the Trust or the
Property Trustee as the absolute owner of such Rule 144A Global Preferred
Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust,
the Property Trustee or any agent of the Trust or the Property Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such Depositary
governing the exercise of the rights of a holder of a beneficial interest in
any Rule 144A Global Preferred Security.
(c) CERTIFICATED SECURITIES. Except as provided in Section 7.9, owners
of beneficial interests in the Rule 144A Global Preferred Security will not
be entitled to receive physical delivery of certificated Preferred
Securities. Preferred Securities offered and sold in reliance on
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Regulation S under the Securities Act ("Regulation S"), as provided in the
Purchase Agreement, shall be issued initially in the form of individual
certificates in definitive, fully registered form without distribution
coupons and shall bear the Restricted Securities Legend set forth in Exhibit
A-1 hereto (the "Regulation S Definitive Preferred Securities"). Purchasers
of Securities who are institutional "accredited investors" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and did not
purchase Preferred Securities in reliance on Regulation S under the
Securities Act will receive Preferred Securities in the form of individual
certificates in definitive, fully registered form without distribution
coupons and with the Restricted Securities Legend set forth in Exhibit A-1
hereto ("Restricted Definitive Preferred Securities"); PROVIDED, HOWEVER,
that upon transfer of such Restricted Definitive Preferred Securities to a
QIB, such Restricted Definitive Preferred Securities will, unless the Rule
144A Global Preferred Security has previously been exchanged, be exchanged
for an interest in a Rule 144A Global Preferred Security pursuant to the
provisions of Section 9.2. Restricted Definitive Preferred Securities will
bear the Restricted Securities Legend set forth on Exhibit A-1 unless removed
in accordance with this Section 7.3 or Section 9.2.
SECTION 7.4 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Trust (directly or through an affiliate) shall maintain in the
Borough of Manhattan, City of New York, State of New York (i) an office or
agency where Preferred Securities may be presented for registration of
transfer or exchange ("Registrar"), (ii) an office or agency where Preferred
Securities may be presented for payment ("Paying Agent") and an office or
agency where Securities may be presented for conversion ("Conversion Agent").
The Registrar shall keep a register of the Preferred Securities and of their
transfer and exchange. The Trust may appoint the Registrar, the Paying Agent
and the Conversion Agent and may appoint one or more co-registrars, one or
more additional paying agents and one or more additional conversion agents in
such other locations as it shall determine. The term "Paying Agent" includes
any additional paying agent and the term "Conversion Agent" includes any
additional conversion agent. The Trust may change any Paying Agent,
Registrar, co-registrar or Conversion Agent without prior notice to any
Holder. The Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Regular Trustees. The Trust shall notify the
Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Registrar, Paying Agent or Conversion Agent, the Property Trustee shall act
as such. The Trust or any of its Affiliates may act as Paying Agent,
Registrar or Conversion Agent. The Trust shall act as Paying Agent,
Registrar, co-registrar and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar, Paying
Agent and Conversion Agent for the Preferred Securities.
SECTION 7.5 PAYING AGENT TO HOLD MONEY IN TRUST.
The Trust shall require each Paying Agent other than the Property Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Property Trustee
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all money held by the Paying Agent for the payment of principal or
distribution on the Securities, and will notify the Property Trustee if there
are insufficient funds. While any such insufficiency continues, the Property
Trustee may require a Paying Agent to pay all money held by it to the
Property Trustee. The Trust at any time may require a Paying Agent to pay
all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property Trustee, the Paying Agent
(if other than the Trust or an Affiliate of the Trust) shall have no further
liability for the money. If the Trust or the Debenture Issuer or an
Affiliate of the Trust or the Debenture Issuer acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent.
SECTION 7.6 REPLACEMENT SECURITIES.
If the holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, the Trust shall issue and the Property Trustee shall
authenticate a replacement Security if the Property Trustee's and the Trust's
requirements, as the case may be, are met. If required by the Property
Trustee or the Trust, an indemnity bond must be sufficient in the judgment of
both to protect the Trustees, the Property Trustee, the Debenture Issuer and
any authenticating agent from any loss which any of them may suffer if a
Security is replaced. The Company may charge for its expenses in replacing a
Security.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by
the Debenture Issuer, the Debenture Issuer in its discretion may, instead of
issuing a new Security, pay or purchase such Security, as the case may be.
Every replacement Security is an additional Security of the Trust
entitled to the same benefits hereunder as the Security being replaced.
SECTION 7.7 OUTSTANDING PREFERRED SECURITIES.
The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation and those described in this
Section as not outstanding.
If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased
Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in full in accordance with the
terms of this Declaration, they cease to be outstanding and interest on them
ceases to accrue.
A Preferred Security does not cease to be outstanding because one of the
Trust, the Debenture Issuer or an Affiliate of the Debenture Issuer holds the
Security.
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SECTION 7.8 PREFERRED SECURITIES IN TREASURY.
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities
owned by the Trust, the Debenture Issuer or an Affiliate of the Debenture
Issuer, as the case may be, shall be disregarded and deemed not to be
outstanding, except that for the purposes of determining whether the Property
Trustee shall be fully protected in relying on any such direction, waiver or
consent, only Securities which the Property Trustee knows are so owned shall
be so disregarded.
SECTION 7.9 TEMPORARY SECURITIES; RULE 144A GLOBAL PREFERRED SECURITIES.
(a) Until definitive Securities are ready for delivery, the Trust may
prepare and, in the case of the Preferred Securities, the Property Trustee
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations
that the Trust considers appropriate for temporary Securities. Without
unreasonable delay, the Trust shall prepare and, in the case of the Preferred
Securities, the Property Trustee shall authenticate definitive Securities in
exchange for temporary Securities.
(b) A Rule 144A Global Preferred Security deposited with the Depositary
or with the Property Trustee as custodian for the Depositary pursuant to
Section 7.3 shall be transferred to the beneficial owners thereof in the form
of certificated Preferred Securities only if such transfer complies with
Section 9.2 and (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for such Rule 144A Global Preferred
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed
by the Debenture Issuer within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing.
(c) Any Rule 144A Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.9 shall be surrendered by the Depositary to the
Property Trustee at its office or the designated office of one of its
affiliates located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without charge, and
the Property Trustee shall authenticate and make available for delivery, upon
such transfer of each portion of such Global Preferred Security, an equal
aggregate liquidation amount of Securities of authorized denominations in the
form of certificated Securities. Any portion of a Rule 144A Global Preferred
Security transferred pursuant to this Section shall be registered in such
names as the Depositary shall direct. Any Preferred Security in the form of
certificated Preferred Securities delivered in exchange for an interest in
the Rule 144A Global Preferred Security shall, except as otherwise provided
by Sections 7.3 and 9.1, bear the Restricted Securities Legend set forth in
Exhibit A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the registered holder
of a Rule 144A Global Preferred Security may grant proxies and otherwise
authorize any person, including Participants and persons that may hold
interests through Participants, to take any action which a holder is entitled
to take under this Declaration or the Securities.
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(e) In the event of the occurrence of either of the events specified in
Section 7.9(b), the Trust will promptly make available to the Property
Trustee a reasonable supply of certificated Securities in definite, fully
registered form without interest coupons.
SECTION 7.10 CANCELLATION.
The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent
shall forward to the Property Trustee any Preferred Securities surrendered to
them for registration of transfer, redemption, conversion, exchange or
payment. The Property Trustee shall promptly cancel all Preferred Securities,
surrendered for registration of transfer, redemption, conversion, exchange,
payment, replacement or cancellation and shall dispose of canceled Preferred
Securities as the Trust directs. The Trust may not issue new Preferred
Securities to replace Preferred Securities that it has paid or that have been
delivered to the Property Trustee for cancellation (other than pursuant to
Section 7.6) or that any Holder has converted.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 DISSOLUTION OF TRUST.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, the filing of a certificate of
cancellation with respect to the Trust after having obtained the consent of
at least a Majority in liquidation amount of the Securities, voting together
as a single class, to file such certificate of cancellation, or the
revocation of the charter of the Sponsor and the expiration of 90 days after
the date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution
of the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof, including any
Additional Interest, Compounded Interest and Liquidated Damages, shall have
been paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance with the
terms of the Securities and all of the Debentures endorsed thereon shall have
been distributed to the Holders of Securities in exchange for all of the
Securities;
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(vi) the expiration of the term of the Trust on October 1,
2025, subject to extension as necessary in accordance with Section 3.13;
(vii) before the issuance of any Securities, with the
consent of all the Regular Trustees and the Sponsor; or
(viii) upon the exchange of all of the Securities into the
Debentures and the conversion of such Debentures into Common Stock of the
Debenture Issuer and delivery of all such shares (and any cash in lieu of
fractional shares) to the exchanging Holders.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), the Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
dissolution of the Trust.
ARTICLE IX
TRANSFER AND EXCHANGE
SECTION 9.1 GENERAL.
(a) Where Preferred Securities are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal number of Preferred Securities represented by different certificates,
the Registrar shall register the transfer or make the exchange if its
requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Trust shall issue and the Property Trustee shall
authenticate Preferred Securities at the Registrar's request.
(b) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration, in
the terms of the Securities and in accordance with applicable securities
laws. Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.
Subject to this Article IX, the Sponsor and any Related Party may only
transfer Common Securities to the Sponsor or a Related Party of the Sponsor;
PROVIDED that, any such transfer is subject to the condition precedent that
the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
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(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
(c) The Regular Trustees shall provide for the registration of
Securities and of transfers of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other governmental charges that may be
imposed in relation to it. Upon surrender for registration of transfer of
any Securities, the Regular Trustees shall cause one or more new Securities
to be issued in the name of the designated transferee or transferees. Every
Security surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Security surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Security shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Security. By acceptance of a
Security, each transferee shall be deemed to have agreed to be bound by this
Declaration.
(d) The Trust shall not be required (i) to issue, register the transfer
of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Preferred Securities
and ending at the close of business on the day of selection, or (ii) to
register the transfer or exchange of any Preferred Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Preferred Security being redeemed in part.
SECTION 9.2 TRANSFER PROCEDURES AND RESTRICTIONS.
(a) GENERAL. Except in connection with the resale thereof pursuant to a
Shelf Registration Statement contemplated by and in accordance with the terms
of the Registration Rights Agreement, if Preferred Securities are issued upon
the transfer, exchange or replacement of Preferred Securities bearing the
Restricted Securities Legend set forth in Exhibit A-1 hereto ("Restricted
Securities"), or if a request is made to remove such Restricted Securities
Legend on Preferred Securities, the Preferred Securities so issued shall bear
the Restricted Securities Legend, or the Restricted Securities Legend shall
not be removed, as the case may be, unless there is delivered to the Trust
and the Property Trustee such satisfactory evidence, which may include an
opinion of counsel, as may be reasonably required by the Company, that
neither the legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of Rule
144A, Rule 144 or Regulation S under the Securities Act or, with respect to
Restricted Securities, that such Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act. Upon provision of such
satisfactory evidence, the Property Trustee, at the written direction of the
Trust, shall authenticate and deliver Preferred Securities that do not bear
the legend.
(b) TRANSFERS AFTER EFFECTIVENESS OF SHELF REGISTRATION STATEMENT.
During the period of effectiveness of a Shelf Registration Statement for any
Preferred Securities (except during periods within such period during which
the Shelf Registration Statement is not available for
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effecting resales of the Preferred Securities), all requirements pertaining
to legends on such Preferred Security will cease to apply, and beneficial
interests in a Preferred Security in global form without legends will be
available to transferees of such Preferred Securities (but not prior to the
applicable transfer), upon exchange of the transferring holder's Restricted
Definitive Preferred Security or directions to transfer such Holder's
beneficial interest in the Rule 144A Global Preferred Security, as the case
may be. No such transfer or exchange of a Restricted Definitive Preferred
Security or of an interest in the Rule 144A Global Preferred Security shall
be effective unless the transferor delivers to the Trust a certificate in the
form of Exhibit D hereto as to compliance by such person with the provisions
of the Registration Rights Agreement applicable thereto. Promptly after the
effectiveness of the Shelf Registration Statement, the Trust shall issue and
the Property Trustee, upon instruction from the Trust, shall authenticate a
Preferred Security in global form without the Restricted Securities Legend
(the "Exchanged Global Preferred Security") to deposit with the Depositary to
evidence transfers pursuant to the Shelf Registration Statement of (i)
beneficial interests from the Rule 144A Global Preferred Security, (ii)
Restricted Definitive Preferred Securities and (iii) Unrestricted Definitive
Preferred Securities.
(c) REGULATION S DEFINITIVE PREFERRED SECURITY TO UNRESTRICTED
DEFINITIVE PREFERRED SECURITY; TERMINATION OF RESTRICTED PERIOD. Following
the termination of the "restricted period" with respect to the issuance of
the Preferred Securities, Regulation S Definitive Preferred Securities may be
exchanged for an interest in a Preferred Security in definitive, fully
registered form without distribution coupons, but without the Restricted
Securities Legend (an "Unrestricted Definitive Preferred Security"), that is
free from any restriction on transfer (other than such as are solely
attributable to any Holder's status). Unrestricted Definitive Preferred
Securities will bear a CUSIP number different from that of the Exchanged
Global Preferred Securities and transfers or exchanges from an Unrestricted
Definitive Preferred Security or Regulation S Definitive Preferred Security
to an Exchanged Preferred Security must be effected pursuant to Section
9.2(b).
(d) TRANSFER AND EXCHANGE OF DEFINITIVE PREFERRED SECURITIES. When
Definitive Preferred Securities are presented to the Registrar or co-registrar
(x) to register the transfer of such Definitive Preferred
Securities; or
(y) to exchange such Definitive Preferred Securities for an equal
number of Definitive Preferred Securities of another number,
the Registrar or co-registrar shall register the transfer or make the
exchange as requested if its reasonable requirements (including any
applicable requirements of law) for such transaction are met; PROVIDED,
HOWEVER, that the Definitive Preferred Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Trust and the
Registrar or co-registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing; and
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(ii) in the case of Definitive Preferred Securities that are
Restricted Definitive Preferred Securities, are being transferred or exchanged
pursuant to an effective registration statement under the Securities Act or,
prior to the time of the effectiveness of such registration statement (or
anytime after the effectiveness of such registration statement when it is not
available for effecting resales of the Preferred Securities), pursuant to clause
(A) or (B) below, and are accompanied by the following additional information
and documents, as applicable:
(A) if such Restricted Preferred Securities are being
delivered to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that effect (in
the form set forth on the reverse of the Preferred Security); or
(B) if such Restricted Preferred Securities are being
transferred pursuant to an exemption from registration in accordance with Rule
144 or Regulation S or any other exemption available under the Securities Act,
including to an institutional "accredited investor," (i) a certification to that
effect (in the form set forth on the reverse of the Preferred Security) and
(ii) if the Trust or Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the Restricted
Securities Legend, including a letter in the form of Exhibit A to the Offering
Circular.
Definitive Preferred Securities that are transferred to QIBs in accordance
with Rule 144A under the Securities Act must take delivery of the Preferred
Securities in the form of a beneficial interest in the Rule 144A Global
Preferred Security in accordance with Section 9.2(e).
(e) RESTRICTIONS ON TRANSFER OF A DEFINITIVE PREFERRED SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL PREFERRED SECURITY. A Definitive Preferred
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with:
(i) if such Definitive Preferred Security is a Restricted
Preferred Security, certification, in the form set forth on the reverse of the
Preferred Security, that such Definitive Preferred Security is being transferred
to a QIB in accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Preferred Security is a
Restricted Preferred Security, written instructions directing the Property
Trustee to make, or to direct the Depositary to make, an adjustment on its books
and records with respect to such Global Preferred Security to reflect an
increase in the number of the Preferred Securities represented by the Global
Preferred Security,
then the Property Trustee shall cancel such Definitive Preferred Security and
cause, or direct the Depositary to cause, the aggregate number of Preferred
Securities represented by the Global Preferred Security to be increased
accordingly. If no Global Preferred Securities are then
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outstanding, the Trust shall issue and the Property Trustee shall
authenticate, upon written order of any Regular Trustee, an appropriate
number of Preferred Securities in global form.
(f) TRANSFER AND EXCHANGE OF GLOBAL PREFERRED SECURITIES. The transfer
and exchange of Global Preferred Securities or beneficial interests therein
shall be effected through the Depositary, in accordance with this Declaration
(including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depositary therefor.
(g) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL PREFERRED SECURITY FOR A
DEFINITIVE PREFERRED SECURITY.
(i) Any person having a beneficial interest in a Global
Preferred Security that is being transferred or exchanged pursuant to clause (A)
or (B) below, and not pursuant to an effective registration statement, may upon
request, and if accompanied by the information specified below, exchange such
beneficial interest for a Definitive Preferred Security representing the same
number of Preferred Securities. Upon receipt by the Property Trustee from the
Depositary or its nominee on behalf of any Person having a beneficial interest
in a Global Preferred Security of written instructions or such other form of
instructions as is customary for the Depositary or the Person designated by the
Depositary as having such a beneficial interest in a Restricted Preferred
Security and the following additional information and documents (all of which
may submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the owner of a beneficial interest
in a Global Preferred Security, a certification from such Person to that effect
(in the form set forth on the reverse of the Preferred Security); or
(B) if such beneficial interest is being transferred
pursuant to an exemption from registration in accordance with Rule 144 or
Regulation S or any other exemption available under the Securities Act,
including to an institutional "accredited investor," (i) a certification to that
effect from the transferee or transferor (in the form set forth on the reverse
of the Preferred Security) and (ii) if the Property Trustee or Registrar so
requests, evidence reasonably satisfactory to them as to the compliance with the
restrictions set forth in the legend set forth in Section 9.2(j), including a
letter in the form of Exhibit A to the Offering Circular,
then the Property Trustee or the Securities Custodian, at the direction of the
Property Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of the Global Preferred Security to be reduced on its
books and records and, following such reduction, the Trust will execute and the
Property Trustee will authenticate and deliver to the transferee a Definitive
Preferred Security.
(ii) Definitive Preferred Securities issued in exchange for a
beneficial interest in a Global Preferred Security pursuant to this
Section 9.2(g) shall be registered in such names and
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in such authorized denominations as the Depositary, pursuant to instructions
from its Participants or indirect participants or otherwise, shall instruct
the Property Trustee. The Property Trustee shall deliver such Preferred
Securities to the persons in whose names such Preferred Securities are so
registered in accordance with the instructions of the Depositary.
Beneficial interests in the Rule 144A Global Security may not be exchanged
for a Definitive Preferred Security except a Regulation S Definitive Preferred
Security and except as provided in Section 9.2(i).
(h) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL PREFERRED SECURITIES.
Notwithstanding any other provisions of this Declaration (other than the
provisions set forth in this Section 9.2(i)), a Global Preferred Security may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
Definitive Preferred Securities that are transferred to QIBs in accordance
with Rule 144A under the Securities Act prior to the effectiveness of a
registration statement under the Securities Act must take delivery of their
interests as the Preferred Securities in the form of a beneficial interest in
the Rule 144A Global Preferred Security in accordance with Section 9.2(e).
(i) AUTHENTICATION OF DEFINITIVE PREFERRED SECURITIES. If at any time:
(i) the Depositary notifies the Trust that the Depositary is
unwilling or unable to continue as Depositary for the Global Preferred
Securities and a successor Depositary for the Global Preferred Securities is not
appointed by the Trust at the direction of the Sponsor within 90 days after
delivery of such notice; or
(ii) the Trust, in its sole discretion, notifies the Property
Trustee in writing that it elects to cause the issuance of Definitive Preferred
Securities under this Declaration,
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Regular Trustee requesting the authentication
and delivery of Definitive Preferred Securities to the Persons designated by the
Trust, will authenticate and deliver Definitive Preferred Securities, in an
aggregate principal amount equal to the principal amount of Global Preferred
Securities, in exchange for such Global Preferred Securities.
(j) LEGEND.
(i) Except as permitted by the following paragraph (ii), each
Preferred Security certificate evidencing the Global Preferred Securities and
the Definitive Preferred Securities (and all Preferred Securities issued in
exchange therefor or substitution thereof) shall bear a legend (the "Restricted
Securities Legend") in substantially the following form:
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THIS SECURITY, ANY CONVERTIBLE DEBENTURE ISSUED IN EXCHANGE FOR THIS
SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION THEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER (OR
SUCH SHORTER PERIOD UNDER RULE 144A UNDER THE SECURITIES ACT OR ANY
SUCCESSOR RULE) THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH VANSTAR CORPORATION (THE "COMPANY") OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE
COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT ITS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR
SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY AND THE TRANSFER
AGENTS RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND
(ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRANSFER AGENT, THIS
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LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
(ii) Upon any sale or transfer of a Restricted Preferred Security
(including any Restricted Preferred Security represented by a Global Preferred
Security) pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 under the Securities Act:
(A) in the case of any Restricted Preferred Security that
is a Definitive Preferred Security, the Registrar shall permit the Holder
thereof to exchange such Restricted Preferred Security for a Definitive
Preferred Security that does not bear the Restricted Securities Legend and
rescind any restriction on the transfer of such Restricted Preferred Security;
and
(B) in the case of any Restricted Preferred Security that
is represented by a Rule 144A Global Preferred Security, the Registrar shall
permit the Holder thereof to exchange its interest in such Restricted Preferred
Security for an interest in a Global Preferred Security that does not bear the
Restricted Securities Legend.
(k) CANCELLATION OR ADJUSTMENT OF GLOBAL PREFERRED SECURITY. At such time
as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by the
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Preferred Security shall be returned to the
Depositary for Cancellation or retained and canceled by the Property Trustee.
At any time prior to such cancellation, if any beneficial interest in a Global
Preferred Security is exchanged for Definitive Preferred Securities, Preferred
Securities represented by such Global Preferred Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the Securities Custodian for such Global Preferred Security) with
respect to such Global Preferred Security, by the Property Trustee or the
Securities Custodian, to reflect such reduction.
(l) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF PREFERRED
SECURITIES.
(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Property Trustee shall authenticate Definitive
Preferred Securities and Global Preferred Securities at the Registrar's or a co-
registrar's request.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Trust or the
Sponsor may require) in respect of any tax or other governmental charge that may
be imposed in relation to it.
(iii) The Registrar or a co-registrar shall not be required
to register the transfer of or exchange of (a) any Definitive Preferred Security
selected for Redemption in whole or in part pursuant to Article III, except the
unredeemed portion of any Definitive Preferred Security being redeemed in part,
or (b) any Preferred Security for a period beginning 15 Business Days
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before the mailing of a notice of an offer to repurchase or redeem Preferred
Securities or 15 Business Days before a quarterly distribution date.
(iv) Prior to the due presentation for registrations of transfer
of any Preferred Security, the Trust, the Property Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in whose name a
Preferred Security is registered as the absolute owner of such Preferred
Security for the purpose of receiving Distributions on such Preferred Security
and for all other purposes whatsoever, and none of the Trust, the Property
Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
(v) All Preferred Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under this Declaration as
the Preferred Securities surrendered upon such transfer or exchange.
(m) NO OBLIGATION OF THE PROPERTY TRUSTEE.
(i) The Property Trustee shall have no responsibility or
obligation to any Preferred Security Beneficial Owner, a Participant in the
Depositary or other Person with respect to the accuracy of the records of the
Depositary or its nominee or of any Participant thereof, with respect to any
ownership interest in the Preferred Securities or with respect to the delivery
to any Participant, beneficial owner or other Person (other than the Depositary)
of any notice (including any notice of redemption) or the payment of any amount,
under or with respect to such Preferred Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
under the Preferred Securities shall be given or made only to or upon the order
of the registered Holders (which shall be the Depositary or its nominee in the
case of a Global Preferred Security). The rights of beneficial owners in any
Global Preferred Security shall be exercised only through the Depositary subject
to the applicable rules and procedures of the Depositary. The Property Trustee
may conclusively rely and shall be fully protected in relying upon information
furnished by the Depositary or any agent thereof with respect to its
Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no obligation
or duty to monitor, determine or inquire as to compliance with any restrictions
on transfer imposed under this Declaration or under applicable law with respect
to any transfer of any interest in any Preferred Security (including any
transfers between or among Participants or beneficial owners in any Global
Preferred Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Declaration, and to examine
the same to determine substantial compliance as to form with the express
requirements hereof.
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SECTION 9.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
Global Preferred Securities shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of the Depositary,
and no Preferred Security Beneficial Owner will receive a definitive Preferred
Security Certificate representing such Preferred Security Beneficial Owner's
interests in such Global Preferred Securities, except as provided in
Section 9.2. Unless and until definitive, fully registered Preferred Securities
Certificates have been issued to the Preferred Security Beneficial Owners
pursuant to Section 9.2:
(a) the provisions of this Section 9.4 shall be in full force and effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Depositary for all purposes of this Declaration (including the payment of
Distributions on the relevant Global Preferred Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Preferred Securities and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and
(d) the rights of the Preferred Security Beneficial owners shall be
exercised only through the Depositary and shall be limited to those established
by law and agreements between such Preferred Security Beneficial owners and the
Depositary and/or the Participants and receive and transmit payments of
Distributions on the Global Certificates to such Participants. The Depositary
will make book entry transfers among the Participants.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Preferred Security Holders
is required under this Declaration, the Regular Trustees shall, in the case of
any Global Preferred Security, give all such notices and communications
specified herein to be given to the Preferred Security Holders to the
Depositary, and shall have no notice obligations to the Preferred Security
Beneficial Owners.
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SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If the Depository elects to discontinue its services as securities
depositary with respect to the Preferred Securities, the Regular Trustees may,
in their sole discretion, appoint a successor Clearing Agency with respect to
such Preferred Securities.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS
OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration or as required under
applicable law, the Securities Guarantees and the terms of the Securities, the
Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the Holders of
the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee, negligence) or willful misconduct with respect to
such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person to the fullest extent permitted.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to the Trust
or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or obligation
to give any consideration to any interest of or factors affecting the Trust or
any other Person; or
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(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
SECTION 10.4 INDEMNIFICATION.
(a) (i) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust
and except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such Court of Chancery
or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of liability)
in defense of any action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a), or in defense of any claim, issue or matter
therein, he shall be indemnified, to the full extent permitted by law, against
expenses (including attorneys, fees) actually and reasonably incurred by him in
connection therewith.
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(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a determination
that indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set forth
in paragraphs (i) and (ii). Such determination shall be made (1) by the
Regular Trustees by a majority vote of a quorum consisting of such Regular
Trustees who were not parties to such action, suit or proceeding, (2) if such
a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal counsel in a
written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys, fees) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in advance
of the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled to
be indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture
Issuer if a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular Trustees,
(ii) if such a quorum is not obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs, by independent legal counsel in
a written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or
Preferred Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Preferred Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at any
time while this Section 10.4(a) is in effect. Any repeal or modification of
this Section 10.4(a) shall not adversely affect any rights or obligations
then existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such,
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whether or not the Debenture Issuer would have the power to indemnify him
against such liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving entity,
any constituent entity (including any constituent of a constituent) absorbed
in a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was serving
at the request of such constituent entity as a director, trustee, officer,
employee or agent of another entity, shall stand in the same position under
the provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent entity if
its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a person who
has ceased to be a Company Indemnified Person and shall inure to the benefit
of the heirs, executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability
or expense including taxes (other than taxes based on the income of such
Fiduciary Indemnified Person) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration or
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in
this Section 10.4(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Debenture Issuer, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Debenture Issuer,
the Delaware Trustee or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Debenture Issuer, the Delaware Trustee and the
Property Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary)
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or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property
Trustee may engage or be interested in any financial or other transaction
with the Debenture Issuer or any Affiliate of the Debenture Issuer, or may
act as depositary for, trustee or agent for, or act on any committee or body
of holders of, securities or other obligations of the Debenture Issuer or its
Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
SECTION 11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year by a firm of independent certified public accountants selected by the
Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each Fiscal Year
of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and delivered to
each of the Holders of Securities, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
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SECTION 11.3 BANKING.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; PROVIDED, HOWEVER, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall
be designated by the Regular Trustees; PROVIDED, HOWEVER, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
SECTION 11.4 WITHHOLDING.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
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(b) no amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate from each
of the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the Property
Trustee, the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust and may include an employee thereof) that such amendment
is permitted by, and conforms to, the terms of this Declaration (including
the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of
the Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company that is required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders of
a majority in liquidation amount of the Common Securities;
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(f) the rights of the holders of the Common Securities under Article V to
increase or decrease the number of, and appoint and remove Trustees shall not be
amended without the consent of the Holders of a Majority in liquidation amount
of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of
the Sponsor; and
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the rights, preferences or privileges of the
Holders.
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any national stock exchange, the Nasdaq National
Market or any inter-dealer quotation system on which the Preferred Securities
are listed or admitted for trading. The Regular Trustees shall call a meeting
of the Holders of such class if directed to do so by the Holders of at least 10%
in liquidation amount of such class of Securities then outstanding. Such
direction shall be given by delivering to the Regular Trustees one or more calls
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Securities exercising the right
to call a meeting and only those Securities represented by the Certificates so
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days and not
more than 60 days before the date of such meeting. Whenever a vote, consent
or approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange, over the counter market or
inter-dealer quotation system on which the Preferred Securities are listed or
admitted for trading,
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such vote, consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of Securities owning not
less than the minimum amount of Securities in liquidation amount that would
be necessary to authorize or take such action at a meeting at which all
Holders of Securities having a right to vote thereon were present and voting.
Prompt notice of the taking of action without a meeting shall be given to
the Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Holders for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or voting
or participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies by Holders, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders of the Securities were stockholders of a Delaware
corporation.
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act, or the listing rules of any
national stock exchange, the Nasdaq National Market, over-the-counter market
or inter-dealer quotation system on which the Preferred Securities are then
listed or trading provide otherwise, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of Securities,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.
The Property Trustee represents and warrants to the Trust and to the
Sponsor at the date of this Declaration, and each Successor Property Trustee
represents and warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee's acceptance of its appointment as Property Trustee
that:
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(a) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with trust power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of, this Declaration.
(b) The execution, delivery and performance by the Property Trustee of the
Declaration has been duly authorized by all necessary corporate action on the
part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors, rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or By-laws of the Property Trustee.
(d) At the Closing Date, the Property Trustee will be the record holder of
the Debentures and the Property Trustee has not knowingly created any liens or
encumbrances on such Debentures.
(e) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Property Trustee of the Declaration.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Delaware Trustee represents and warrants to the Trust and to the
Sponsor at the date of this Declaration and at the time of Closing, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a duly organized, validly existing and in good
standing under the laws of the State of Delaware, with trust power and authority
to execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(b) The execution, delivery and performance by the Delaware Trustee of the
Declaration has been duly authorized by all necessary corporate action on the
part of the Delaware Trustee. The Declaration has been duly executed and
delivered by the Delaware Trustee, and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors, rights generally and to
general
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principles of equity and the discretion of the court (regardless of whether
the enforcement of such remedies is considered in a proceeding in equity or
at law).
(c) The execution, delivery and performance of the Declaration by the
Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or By-laws of the Delaware Trustee.
(d) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
(e) The Delaware Trustee is an entity which has its principal place of
business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration.
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 REGISTRATION RIGHTS.
The Holders of the Preferred Securities, the Debentures and the Preferred
Securities Guarantee and the shares of Common Stock of the Company issuable upon
conversion of the Debentures (collectively, the "Registrable Securities") are
entitled to the benefits of the Registration Rights Agreement. Pursuant to the
Registration Rights Agreement, the Debenture Issuer has agreed for the benefit
of the Holders of Registrable Securities that (i) it will, at its cost, within
75 days after the date of issuance of the Registrable Securities, file a shelf
registration statement (the "Shelf Registration Statement") with the Commission
with respect to resales of the Registrable Securities, (ii) it will use its
reasonable efforts to cause such Shelf Registration Statement to be declared
effective by the Commission within 135 days after the date of issuance of the
Registrable Securities and (iii) the Debenture Issuer will use its reasonable
efforts to maintain such Shelf Registration Statement continuously effective
under the Securities Act until the third anniversary of the effectiveness of the
Shelf Registration Statement or such earlier date as is provided in the
Registration Rights Agreement (the "Effectiveness Period").
Reference is made to the Registration Rights Agreement for a description
of, among other things, the circumstances under which a "Registration Default"
may be declared if such Shelf Registration Statement is not filed or declared
effective within the specified periods of time, and additional interest
"Liquidated Damages" may accrue and be payable on the Securities as a result of
such a Registration Default.
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ARTICLE XV
MISCELLANEOUS
SECTION 15.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, sent by
facsimile or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
c/o Vanstar Corporation
0000 Xxxx Xxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
(b) if given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Administration
Facsimile: 000-000-0000
(c) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Administration
Facsimile: 000-000-0000
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
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Vanstar Corporation
0000 Xxxx Xxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 15.2 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall be governed
by and interpreted in accordance with the laws of the State of Delaware and all
rights and remedies shall be governed by such laws without regard to principles
of conflict of laws.
SECTION 15.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Declaration shall be interpreted to further this intention of the parties.
SECTION 15.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 15.5 SUCCESSORS AND ASSIGNS
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
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SECTION 15.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 15.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the parties to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
VANSTAR FINANCING TRUST
By: /s/ XXXX X. XXXXXXX, XX.
-------------------------------------
Xxxx X. Xxxxxxx, Xx.
as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WILMINGTON TRUST COMPANY,
as Property Trustee
By: /s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
VANSTAR CORPORATION,
as Sponsor
By: /s/ H. XXXXXXXXXXX XXXXXXXXX
-------------------------------------
Name: H. Xxxxxxxxxxx Xxxxxxxxx
Title: Senior Vice President, General
Counsel and Secretary
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ANNEX I
TERMS OF
6 3/4% TRUST CONVERTIBLE PREFERRED SECURITIES
6 3/4% TRUST CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of October 2, 1996 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration or, if not defined in such Declaration, as defined in
the Offering Circular referred to below):
1. DESIGNATION AND NUMBER.
(a) "Preferred Securities." 3,500,000 Trust Convertible Preferred
Securities of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of One Hundred Seventy Five Million Dollars ($175,000,000),
plus up to an additional 525,000 Preferred Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Twenty-
Six Million Two Hundred Fifty Thousand Dollars ($26,250,000) solely to cover
over-allotments, as provided for in the Purchase Agreement (the "Additional
Preferred Securities"), and a liquidation amount with respect to the assets of
the Trust of $50 per preferred security, are hereby designated for the purposes
of identification only as "6 3/4 Trust Convertible Preferred Securities
(liquidation amount $50 per Trust Convertible Preferred Security)" (the
"Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange, inter-dealer quotation system or other organization on
which the Preferred Securities are listed or accepted for trading.
(b) "Common Securities." 108,247 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Five
Million Four Hundred Twelve Thousand Three Hundred Fifty Dollars ($5,412,350)
plus up to an additional 16,237 Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of Eight Hundred
Eleven Thousand Eight Hundred Fifty Dollars ($811,850) to meet the capital
requirements of the Trust in the event of an issuance of Additional Preferred
Securities, and a liquidation amount with respect to the assets of the Trust of
$50 per Common Security, are hereby designated for the purposes of
identification only as "6 3/4% Trust Convertible Common Securities (liquidation
amount $50 per Trust Convertible Common Security)" (the "Common Securities").
The Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
2. DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 6 3/4% (the "Coupon Rate") of the stated liquidation amount of $50 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distribution" as used herein
includes any such interest including any Additional Interest, Compounded
Interest and Liquidated Damages payable unless otherwise stated. A Distribution
is payable only to the extent that payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Property Trustee
has funds available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed.
(b) Distributions on the Securities will be cumulative, will accrue from
the date of initial issuance and will be payable quarterly in arrears, on the
following dates, which dates correspond to the interest payment dates on the
Debentures: January 1, April 1, July 1 and October 1, commencing on January 1,
1997, when, as and if available for payment by the Property Trustee, except as
otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
from time to time on the Debentures for successive periods not exceeding 20
consecutive quarters (each an "Extension Period"), during which Extension Period
no interest shall be due and payable on the Debentures; PROVIDED, that no
Extension Period shall last beyond the date of maturity of the Debentures. As a
consequence of such extension, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debenture Issuer may further extend such
Extension Period; PROVIDED, that such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters
and that such Extension Period may not extend beyond the maturity date of the
Debentures. Payments of accrued Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. The relevant record dates shall be the day 15 days prior to
the relevant payment dates, except as otherwise described in this Annex I to
the Declaration. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Preferred
Securities being held in book-entry form through The Depository Trust Company
(the "Depositary") will be made as described under the heading "Description
of the Preferred Securities--Book-Entry Only Issuance--The Depository Trust
Company" in the Offering Circular. The relevant record dates for the
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Common Securities shall be the same record dates as for the Preferred
Securities. Distributions payable on any Securities that are not punctually
paid on any Distribution payment date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be
payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable
to the Person in whose name such Securities are registered on the special
record date or other specified date determined in accordance with the
Indenture. If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and without
any distribution or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock of the Debenture Issuer
pursuant to the terms of the Securities as forth in this Annex I to the
Declaration, no payment, allowance or adjustment shall be made with respect
to accumulated and unpaid Distributions on such Securities, or be required to
be made; PROVIDED that Holders of Securities at the close of business on any
record date for the payment of Distributions will be entitled to receive the
Distributions payable on such Securities on the corresponding payment date
notwithstanding the conversion of such Securities into Common Stock of the
Debenture Issuer following such record date.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Trust (each a "Liquidation"), the then Holders of the
Securities on the date of the Liquidation will be entitled to receive out of
the assets of the Trust available for distribution to Holders of Securities
after satisfaction of liabilities of creditors, distributions in an amount
equal to the aggregate of the stated liquidation amount of $50 per Security
plus accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in connection with such
Liquidation, Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities,
shall be distributed on a Pro Rata basis to the Holders of the Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis in
accordance with paragraph 10 below.
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4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Debentures in whole or in part, whether
at maturity or upon redemption (either at the option of the Debenture Issuer
or pursuant to a Special Event (as defined below)), the proceeds from such
repayment or payment shall be simultaneously applied to redeem Securities
having an aggregate liquidation amount equal to the aggregate principal
amount of the Debentures so repaid or redeemed at a redemption price equal to
the redemption price of such repaid or redeemed Debentures, together with
accrued and unpaid Distributions thereon through the date of the redemption,
payable in cash (the "Redemption Price"). Holders will be given not less than
30 nor more than 60 days' notice of such redemption. Upon the repayment of
the Debentures at maturity or upon any acceleration, earlier redemption or
otherwise, the proceeds from such repayment will be applied to redeem the
Securities, in whole, upon not less than 30 nor more than 60 days' notice.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed Pro Rata
and the Preferred Securities to be redeemed will be as described in paragraph
4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each
as defined below and each a "Special Event") shall occur and be continuing
the Regular Trustees shall, unless the Debentures are redeemed in the limited
circumstances in relation to a Tax Event described in this Section 4(c),
dissolve the Trust and, after satisfaction of creditors of the Trust, if any,
cause Debentures held by the Property Trustee, having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid Distributions
on, and having the same record date for payment as the Securities, to be
distributed to the Holders of the Securities in liquidation of such Holders'
interest in the Trust on a Pro Rata basis, within 90 days following the
occurrence of such Special Event (the "90 Day Period"); PROVIDED, HOWEVER,
that in the case of a Tax Event, such dissolution and distribution shall be
conditioned on the Regular Trustees' receipt of an opinion of a nationally
recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the Holders of the Preferred
Securities will not recognize any income, gain or loss for United States
federal income tax purposes as a result of such dissolution and distribution
of Debentures, and PROVIDED, FURTHER, that if at the time there is available
to the Trust the opportunity to eliminate, within the 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
in the sole judgment of the Sponsor, has or will cause no adverse effect on
the Trust, the Sponsor or the Holders of the Securities and will involve no
material cost ("Ministerial Action"), the Trust will pursue such Ministerial
Action in lieu of dissolution.
If in the event of a Tax Event, (i) after receipt of a Tax Event Opinion
(as defined hereinafter) by the Trust, the Regular Trustees have received an
opinion (a "Redemption Tax Opinion") of a nationally recognized independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Debenture Issuer would
I-4
be precluded from deducting the interest on the Debentures for United States
federal income tax purposes even if the Debentures were distributed to the
Holders of Securities in liquidation of such Holders' interest in the Trust
as described in this paragraph 4(c), or (ii) after receipt of a Tax Event
Opinion, the Regular Trustees shall have been informed by such tax counsel
that a No Recognition Opinion cannot be delivered to the Trust, the Debenture
Issuer shall have the right, upon not less than 30 nor more than 60 days'
notice, to redeem the Debentures in whole (but not in part) for cash within
90 days following the occurrence of such Tax Event, and promptly following
such redemption, the Securities shall be redeemed, on a Pro Rata basis at a
redemption price equal to the redemption price of such redeemed Debentures,
together with accrued and unpaid Distributions thereon through the date of
redemption, payable in cash; PROVIDED, HOWEVER, that if at the time there is
available to the Debenture Issuer or the Trust the opportunity to eliminate,
within such 90 Day Period, the Tax Event by taking some Ministerial Action
which has no adverse effect on the Trust, the Holders of Securities or the
Debenture Issuer, the Trust or the Debenture Issuer will pursue such
Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in
such matters (a "Dissolution Tax Opinion") to the effect that, 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 States or any
political subdivision or taxing authority thereof or therein, (b) any
amendment to, or change in, an interpretation or application of any such laws
or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case after the date of the Offering Circular
(collectively, a "Change in Tax Law"), there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to interest accrued
or received on the Debentures, (ii) the Trust is, or will be within 90 days
of the date thereof, subject to more than a de minimis amount of other taxes,
duties or other governmental charges, or (iii) interest payable by the
Debenture Issuer to the Trust on the Debentures is not, or within 90 days of
the date thereof will not be, deductible by the Debenture Issuer for United
States federal income tax purposes. Notwithstanding anything in the previous
sentence to the contrary, a Tax Event shall not include any Change in Tax Law
that requires the Debenture Issuer for United States federal income tax
purposes to defer taking a deduction for any original issue discount ("OID")
that accrues with respect to the Debentures until the interest payment
related to such OID is paid by the Debenture Issuer in money; PROVIDED, that
such Change in Tax Law does not create more than an insubstantial risk that
the Debenture Issuer will be prevented from taking a deduction for OID
accruing with respect to the Debentures at a date that is no later than the
date the interest payment related to such OID is actually paid by the
Debenture Issuer in money.
I-5
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment
Company Event Opinion") that, as a result of an occurrence of a change in law
or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after the date of the Offering Circular.
On the date fixed for any distribution of Debentures, upon dissolution of
the Trust: (i) the Securities will no longer be deemed to be outstanding and
(ii) certificates representing Securities will be deemed to represent beneficial
interests in Debentures having an aggregate principal amount equal to the stated
liquidation amount, and bearing accrued and unpaid interest equal to accrued and
unpaid Distributions, on such Securities until such certificates are presented
to the Debenture Issuer or its agent for transfer or reissuance.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(e) If the Debentures are distributed to the Holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of Securities, or notice of
distribution of Debentures in exchange for the Securities (a
"Redemption/Distribution Notice"), will be given by the Trust by mail to
each Holder of Securities to be redeemed or exchanged not fewer than 30 nor
more than 60 days before the date fixed for redemption or exchange thereof
which, in the case of a redemption, will be the date fixed for redemption
of the Debentures. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to
this paragraph 4(f)(i), a Redemption/ Distribution Notice shall be deemed
to be given on the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of Securities at the address of
each such Holder appearing in the books and records of the Trust. No
defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities
are to be redeemed, the Securities to be redeemed shall be redeemed Pro
Rata from each Holder of Preferred Securities, it being understood that, in
respect of Preferred Securities registered
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in the name of and held of record by the Depositary or its nominee (or any
successor Clearing Agency or its nominee), the distribution of the proceeds
of such redemption will be made to each Clearing Agency Participant (or
Person on whose behalf such nominee holds such securities) in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this paragraph 4 (which notice
will be irrevocable), then (A) with respect to Preferred Securities
held in book-entry form, by 12:00 noon, New York City time, on the
redemption date, provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Trust will
deposit irrevocably with the Depositary or its nominee (or successor
Clearing Agency or its nominee) funds sufficient to pay the applicable
Redemption Price with respect to such Preferred Securities and will
give the Depositary irrevocable instructions and authority to pay the
applicable Redemption Price to the Holders of such Preferred Securities
represented by the Global Certificates, and (B) with respect to
Preferred Securities issued in certificated form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Trust will irrevocably deposit with the
Paying Agent funds sufficient to pay the amount payable on redemption
to the Holders of such Securities upon surrender of their certificates.
If a Redemption/Distribution Notice shall have been given and funds
deposited as required, then on the date of such deposit, all rights of
Holders of such Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the Redemption
Price, but without interest on such Redemption Price. Neither the
Regular Trustees nor the Trust shall be required to register or cause
to be registered the transfer of any Securities that have been so
called for redemption. If any date fixed for redemption of Securities
is not a Business Day, then payment of the amount payable on such date
will be made on the next succeeding day that is a Business Day (without
any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date fixed for
redemption. If payment of the redemption price in respect of any
Securities is improperly withheld or refused and not paid either by the
Trust or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to
accrue at the then applicable rate, from the original redemption date
to the date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating
the amount payable upon redemption (other than for purposes of
calculating any premium).
(iv) In the event of any redemption in part, the Trust shall
not be required to (i) issue, register the transfer of or exchange of any
Preferred Security during a period beginning at the opening of business
15 days before any selection for redemption of
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Preferred Securities and ending at the close of business on the
earliest date in which the relevant notice of redemption is deemed to
have been given to all holders of Preferred Securities to be so
redeemed or (ii) register the transfer of or exchange of any Preferred
Securities so selected for redemption, in whole or in part, except for
the unredeemed portion of any Preferred Securities being redeemed in
part.
(v) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in the case of Preferred
Securities held in book-entry form, the Depositary and, in the case of
Securities held in certificated form, the Holders of such certificates
and (B) in respect of the Common Securities, the Holder thereof.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), the Sponsor
or any of its subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender, in the open market
or by private agreement.
5. CONVERSION RIGHTS.
The Holders of Securities shall have the right at any time prior to the
Business Day immediately preceding the date of repayment of such Securities,
whether at maturity or upon redemption (either at the option of the Company or
pursuant to a Special Event), at their option, to cause the Conversion Agent to
convert Securities, on behalf of the converting Holders, into shares of Common
Stock of the Company in the manner described herein on and subject to the
following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Common Stock of the Company
pursuant to the Holder's direction to the Conversion Agent to exchange such
Securities for a portion of the Debentures theretofore held by the Trust on the
basis of one Security per $50 principal amount of Debentures, and immediately
convert such amount of Debentures into fully paid and nonassessable shares of
Common Stock of the Company at an initial conversion rate of 1.739 shares of
Common Stock of the Company per $50 principal amount of Debentures (which is
equivalent to a conversion price of $28.75 per share of Common Stock of the
Company, subject to certain adjustments set forth in the terms of the Debentures
(as so adjusted, "Conversion Price")). In addition, subject to the provisions
of Section 1309 of the Indenture, in case the Company shall, by dividend or
otherwise, declare or make a distribution on its Common Stock referred to in
Section 1303(c) or 1303(d) of the Indenture, the Holder of the Securities, upon
the conversion thereof, shall also be entitled to receive for each share of
Common Stock of the Company into which the Securities are converted, the portion
of the shares of such Common Stock, rights, warrants, evidences of indebtedness,
shares of capital stock, cash and assets so distributed applicable to one share
of Common Stock.
(b) In order to convert Securities into Common Stock of the Company the
Holder shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert
I-8
Securities on behalf of such Holder (the "Conversion Request"), together, if
the Securities are in certificated form, with such certificates. The
Conversion Request shall (i) set forth the number of Securities to be
converted and the name or names, if other than the Holder, in which the
shares of Common Stock of the Company should be issued and (ii) direct the
Conversion Agent (a) to exchange such Securities for a portion of the
Debentures held by the Trust (at the rate of exchange specified in the
preceding paragraph) and (b) to immediately convert such Debentures on behalf
of such Holder, into Common Stock of the Company (at the conversion rate
specified in the preceding paragraph). The Conversion Agent shall notify the
Trust of the Holder's election to exchange Securities for a portion of the
Debentures held by the Trust and the Trust shall, upon receipt of such
notice, deliver to the Conversion Agent the appropriate principal amount of
Debentures for exchange in accordance with this Section. The Conversion
Agent shall thereupon notify the Company of the Holder's election to convert
such Debentures into shares of Common Stock of the Company. Holders of
Securities at the close of business on a Distribution record date will be
entitled to receive the Distribution payable on such securities on the
corresponding Distribution payment date notwithstanding the conversion of
such Securities following such record date but prior to such distribution
payment date. Except as provided above, neither the Trust nor the Debenture
Issuer will make, or be required to make, any payment, allowance or
adjustment upon any conversion on account of any accumulated and unpaid
Distributions accrued on the Securities (including any Additional Interest,
Compounded Interest and Liquidation Damages accrued thereon) surrendered for
conversion, or on account of any accumulated and unpaid dividends on the
shares of Common Stock of the Company issued upon such conversion. The
Company shall make no payment or allowance for distributions on the shares of
Common Stock of the Company issued upon such conversion, except to the extent
that such shares of Common Stock of the Company are held of record on the
record date for any such distributions and except as provided in Section 1309
of the Indenture. Securities shall be deemed to have been converted
immediately prior to the close of business on the day on which a Notice of
Conversion relating to such Securities is received by the Trust in accordance
with the foregoing provision (the "Conversion Date"). The Person or Persons
entitled to receive the Common Stock of the Company issuable upon conversion
of the Debentures shall be treated for all purposes as the record holder or
holders of such Common Stock of the Company at such time. As promptly as
practicable on or after the Conversion Date, the Company shall issue and
deliver at the office of the Conversion Agent a certificate or certificates
for the number of full shares of Common Stock of the Company issuable upon
such conversion, together with the cash payment, if any, in lieu of any
fraction of any share to the Person or Persons entitled to receive the same,
unless otherwise directed by the Holder in the notice of conversion, and the
Conversion Agent shall distribute such certificate or certificates to such
Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
Wilmington Trust Company as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the
I-9
Debentures into Common Stock of the Company and thereupon to deliver such
shares of Common Stock of the Company in accordance with the provisions of
this Section and to deliver to the Trust a new Debenture or Debentures for
any resulting unconverted principal amount.
(d) No fractional shares of Common Stock of the Company will be issued as
a result of conversion, but in lieu thereof, such fractional interest will be
paid in cash (based on the last reported sale price of the Common Stock of the
Company on the date such Securities are surrendered for conversion) by the
Debenture Issuer to the Trust, which in turn will make such payment to the
Holder or Holders of Securities so converted.
(e) The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock of the Company, solely for issuance upon
the conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Common Stock of the Company as shall from time
to time be issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Company shall be entitled to deliver upon
conversion of Debentures, shares of Common Stock of the Company reacquired and
held in the treasury of the Company (in lieu of the issuance of authorized and
unissued shares of Common Stock of the Company), so long as any such treasury
shares are free and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock of the Company issued upon conversion
of the Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of Common Stock of the
Company 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 Debenture Issuer 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 of the Company (and all requirements to list
the Common Stock of the Company issuable upon conversion of Debentures that are
at the time applicable), in order to enable the Company to lawfully issue Common
Stock of the Company to the Trust upon conversion of the Debentures and the
Trust to lawfully deliver the Common Stock of the Company to each Holder upon
conversion of the Securities.
(f) The Debenture Issuer will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock of the Company on
conversion of Debentures and the delivery of the shares of Common Stock of the
Company by the Trust upon conversion of the Securities. The Debenture Issuer
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock of
the Company in a name other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Trust the amount of any such tax,
or has established to the satisfaction of the Trust that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or set forth
in this Annex I to the
I-10
Declaration or to the Declaration itself or otherwise require the Property
Trustee or the Trust to pay any amounts on account of such withholdings.
(h) The Trust covenants not to convert the Debenture held by it into
Common Stock of the Company except pursuant to a Conversion Request in
compliance with the terms of this paragraph 5.
6. VOTING RIGHTS - PREFERRED SECURITIES.
(a) Except as provided under paragraphs 6(b) and 9, in the Business Trust
Act and as otherwise required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the Holders
of a majority in liquidation amount of the Preferred Securities, voting
separately as a class, may direct the time, method, and place of conducting any
proceeding for any remedy available to the Property Trustee, or direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as holder of
the Debentures, to (i) exercise the remedies available to it under the Indenture
as a holder of the Debentures, (ii) waive any past default and its consequences
that is waivable under 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 or action under the Indenture would require the
consent or act of the Holders of greater than a majority of the Holders in
principal amount of Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the written
direction of the Holders of at least the proportion in liquidation amount of the
Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Property Trustee
shall be under no obligation to revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Property Trustee or the Debenture Trustee as set forth above,
the Property Trustee shall be under no obligation to take any action in
accordance with the directions of the Holders of the Preferred Securities under
this paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action and each Holder will be treated as owning an
undivided beneficial interest in the Debentures. If the Property Trustee fails
to enforce its rights under the Debentures after a Holder of Preferred
Securities has made a written request, such Holder of Preferred Securities, to
the extent permitted by applicable law, may directly institute a legal
proceeding against the Debenture Issuer to enforce the Property Trustee's rights
under the Debentures without first instituting any legal proceeding against the
Property Trustee or any other Person. Notwithstanding the foregoing, if a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such
I-11
interest or principal is otherwise payable (or in the case of redemption on
the redemption date), then a holder of Preferred Securities may, to the
extent permitted by applicable law, directly institute a proceeding for
enforcement of payment to such holder (a "Direct Action") of the principal of
or interest on the Debenture having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in the Debentures. Except as provided in the
preceding sentence, the holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the
Debentures. In connection with such Direct Action, the Debenture Issuer will
be subrogated to the rights of such holder of Preferred Securities under the
Declaration to the extent of any payment made by the Debenture Issuer to such
holder of Preferred Securities in such Direct Action, and such holder shall
be deemed to have assigned its rights with regard to such payment to the
Debenture Issuer.
(c) 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 Securities in the Trust
or pursuant to written consent. The Regular 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 the following information (i) the date of
such meeting or the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
(d) No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities. Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned by the Sponsor or any Affiliate of
the Sponsor controlled by the Sponsor shall not be entitled to vote or consent
and shall, for purposes of such vote or consent, be treated as if such Preferred
Securities were not outstanding.
7. VOTING RIGHTS--COMMON SECURITIES.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the Business
Trust Act and as otherwise required by law and the Declaration, the Holders of
the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 3.9 of the Declaration and only after the Event of
Default with respect to the Preferred Securities has been cured, waived or
otherwise eliminated, and subject to
I-12
the requirements of the second to last sentence of this paragraph, the
Holders of a Majority in liquidation amount of the Securities, voting
separately as a class, may direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method or place of conducting
any proceeding for any remedy available to the Debenture Trustee, or
exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waiving any past default and its consequences that is
waivable under Section 513 of the Indenture, (iii) exercising any right to
rescind or annul a declaration that the principal of all the Debentures shall
be due and payable, or (iv) consenting to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required; PROVIDED that, where a consent or action under the Indenture would
require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding. Pursuant to
this paragraph 7(c), the Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place
of conducting any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall be under no obligation
to take any action in accordance with the directions of the Holders of the
Common Securities under this paragraph unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that for the
purposes of United States federal income tax the Trust will not be classified
as other than a grantor trust on account of such action and each Holder will
be treated as owning an undivided beneficial interest in the Debentures. If
the Property Trustee fails to enforce its rights under the Debentures after a
Holder of Common Securities has made a written request, such Holder of Common
Securities may, to the extent permitted by applicable law, institute a legal
proceeding directly against the Debenture Issuer or any other Person to
enforce the Property Trustee's rights under the Debentures, without first
instituting any legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
I-13
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
8. REGISTRATION RIGHTS.
The Holders of the Preferred Securities, the Debentures, the Preferred
Securities Guarantee and the shares of Common Stock of the Company issuable upon
conversion of the Debentures (collectively, the "Registrable Securities") are
entitled to the benefits of a Registration Rights Agreement dated October 2,
1996. Pursuant to the Registration Rights Agreement, the Debenture Issuer and
the Trust have agreed for the benefit of the Holders of Registrable Securities
that (i) they will, at their cost, within 75 days after the date of issuance of
the Registrable Securities, file a shelf registration statement (the "Shelf
Registration Statement") with the Commission with respect to resales of the
Registrable Securities, (ii) they will use their reasonable efforts to cause
such Shelf Registration Statement to be declared effective by the Commission
within 135 days after the date of issuance of the Registrable Securities and
(iii) they will use their reasonable efforts to maintain such Shelf Registration
Statement continuously effective under the Securities Act until the third
anniversary of the effectiveness of the Shelf Registration Statement or such
earlier date as is provided in the Registration Rights Agreement (the
"Effectiveness Period").
Reference is made to the Registration Rights Agreement for a description
of, among other things, the circumstances under which a "Registration Default"
may be declared if such Shelf Registration Statement is not filed or declared
effective within the specified periods of time, and additional interest
"Liquidated Damages" may accrue and be payable on the Securities as a result of
such a Registration Default, which terms are hereby incorporated herein.
9. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up
or termination of the Trust, other than as described in Section 8.1 of the
Declaration, then the Holders of Securities as a class, will be entitled to vote
on such amendment or proposal (but not on any other amendment or proposal) and
such amendment or proposal shall not be effective except with the approval of
the Holders of at least a Majority in liquidation amount of the Securities
affected thereby, voting together as a single class; PROVIDED, HOWEVER, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Preferred Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the
I-14
Indenture or the Debentures, the Property Trustee shall request the written
direction of the Holders of the Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount
of the Securities voting together as a single class; PROVIDED, HOWEVER, that
where a consent under the Indenture would require the consent of the Holders
of a Super Majority of the Debentures, the Property Trustee may only give
such consent at the written direction of the Holders of at least the same
proportion in aggregate stated liquidation preference of the Securities;
PROVIDED, FURTHER, that the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Securities under this
paragraph 8(b) unless the Property Trustee has obtained an opinion of a
nationally recognized independent tax counsel to the effect that for the
purposes of United states federal income tax the Trust will not be classified
as other than a grantor trust on account of such action.
(c) In the event of any Fundamental Change (as defined in the
Indenture), the Declaration shall be amended as contemplated by, and in
accordance with the requirements of, Section 1304 of the Indenture. The
Regular Trustees, the Property Trustee and the Delaware Trustee shall be
authorized to execute and deliver any such amendment. Such amendment shall
not require the vote or consent of the Holders of any of the Securities.
10. PRO RATA.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder of
Securities according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
11. RANKING.
The Preferred Securities rank PARI PASSU and payment thereon shall be made
Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing under the Indenture in respect of the Debentures held
by the Property Trustee, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities.
12. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
I-15
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
13. NO PREEMPTIVE RIGHTS.
The Holders of the Securities shall have no preemptive rights.
14. MISCELLANEOUS.
The terms of this Annex I constitute a part of the Declaration.
The Debenture Issuer will provide a copy of the Declaration, Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
I-16
EXHIBIT A-1
FORM OF PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include if Preferred Security is in global form and the Depository Trust
Company is the U. S. Depositary--UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form--TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
THIS SECURITY, ANY CONVERTIBLE DEBENTURE ISSUED IN EXCHANGE FOR THIS
SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION THEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS THREE YEARS AFTER (OR SUCH SHORTER PERIOD UNDER
RULE 144A UNDER THE SECURITIES ACT OR ANY SUCCESSOR RULE) THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH VANSTAR CORPORATION (THE
"COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE")
ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
A1-1
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRANSFER AGENT'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
Certificate Number Number of Preferred Securities
[CUSIP NO [ ]]
[ISIN NO. [ ]]
Preferred Securities
of
Vanstar Financing Trust
6 3/4% Trust Convertible Preferred Securities
(liquidation amount $50 per Trust Convertible Preferred Security)
A1-2
Vanstar Financing Trust, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that _________________
______________ (the "Holder") is the registered owner of ______________(______)
) preferred securities of the Trust representing undivided beneficial interests
in the assets of the Trust designated the 6 3/4% Trust Convertible Preferred
Securities (liquidation amount $50 per Trust Convertible Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of October 2, 1996, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Preferred Securities as set forth in Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits
of the Preferred Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Preferred Securities
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
Reference is hereby made to select provisions of the Preferred Securities
set forth on the reverse hereof, which select provisions shall for all purposes
have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.
A1-3
Unless the Property Trustee's Certificate of Authentication hereon has
been properly executed, these Preferred Securities shall not be entitled to
any benefit under the Declaration or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate on
__________ __, 1996.
VANSTAR FINANCING TRUST
By:
---------------------------------------
Name:
Title: Regular Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-mentioned
Declaration.
Dated: ___________________, _____
WILMINGTON TRUST COMPANY
as Property Trustee
By:
---------------------------------------
Authorized Signatory
A1-4
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate
per annum of 6 3/4% (the "Coupon Rate") of the stated liquidation amount of $50
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distribution" as used herein includes any such interest including Additional
Interest, Compounded Interest and Liquidated Damages payable unless otherwise
stated, and any premium and/or principal on the Debentures. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on January 1, April 1, July 1 and
October 1 of each year, commencing on January 1, 1997, to Holders of record
fifteen (15) days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for
successive periods not exceeding 20 consecutive quarters (each an "Extension
Period") during which Extension Period no interest shall be due and payable on
the Debentures; PROVIDED, that no Extension Period shall extend beyond the date
of maturity of the Debentures. As a consequence of such extension,
Distributions will also be deferred. Despite such extension, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; PROVIDED, that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
The Preferred Securities shall be convertible into shares of Common Stock
of Vanstar Corporation, through (i) the exchange of Preferred Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Common Stock of Vanstar Corporation, in the manner and according to the
terms set forth in the Declaration.
A1-5
CONVERSION REQUEST
To: Wilmington Trust Company
as Property Trustee of
Vanstar Financing Trust
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 VANSTAR CORPORATION (the "Vanstar Common
Stock") in accordance with the terms of the Amended and Restated Declaration of
Trust (the "Declaration"), dated as of October 2, 1996, by Xxxx X. Xxxxxxx, Xx.,
as Regular Trustee, Wilmington Trust Company, as Delaware Trustee, Wilmington
Trust Company, as Property Trustee, Vanstar Corporation, as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in the Trust to
be issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Preferred Securities, the undersigned hereby
directs the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Preferred Securities for a portion of the Debentures (as that term
is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures, on behalf of the
undersigned, into Vanstar Common Stock (at the conversion rate specified in the
terms of the Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
A1-6
Any holder, upon the exercise of its conversion rights in accordance with
the terms of the Declaration and the Preferred Securities, agrees to be bound by
the terms of the Registration Rights Agreement relating to the Vanstar Common
Stock issuable upon conversion of the Preferred Securities.
Date:__________________, ____
in whole ___ in part ___
Number of Preferred Securities to be
converted:
------------------------------------------
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Vanstar Common Stock are to be issued,
along with the address or addresses of such
person or persons:
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number:
------------------------------------------
------------------------------------------
------------------------------------------
Signature Guarantee:*
-------------------
------------------------
* Signature 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,
A1-7
ASSIGNMENT FORM
To assign this Preferred Security, fill in the form below:
(I) or (we) assign and transfer this Preferred Security to
-------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
-------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
agent to transfer this Preferred Security on the books of the Company. The
agent may substitute another to act for him.
Your Signature:
--------------------------------
(Sign exactly as your name appears on the other
side of this Security)
Date:
------------------------------------------
Signature Guarantee:
---------------------------
[Include the following if the Preferred Security bears a Restricted Securities
Legend --
In connection with any transfer of any of the Preferred Securities evidenced by
this certificate, the undersigned confirms that such Preferred Securities are
being:
CHECK ONE BOX BELOW
(1) / / exchanged for the undersigned's own account without transfer; or
(2) / / transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
------------------------
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
** Signature must be guaranteed by a commercial bank, trust company or
member firm of the NYSE.
A1-8
(3) / / transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(4) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(5) / / transferred pursuant to an effective Shelf Registration
Statement.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Preferred Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; PROVIDED, HOWEVER, that if box (3) or
(4) is checked, the Trustee may require, prior to registering any such transfer
of the Preferred Securities such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such as
the exemption provided by Rule 144 under such Act.
-------------------------------------
Signature
Signature Guarantee:*
---------------------------------- -------------------------------------]
Signature must be guaranteed Signature
-----------------------------------------------------------------------------
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Preferred Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:------------------------ ------------------------------------------
NOTICE: To be executed by an executive
officer.]
---------------------
*Signature must be guaranteed by a commercial bank, trust company or
member firm of the NYSE.
A1-9
EXHIBIT A-2
FORM OF COMMON SECURITY
[FORM OF FACE OF SECURITY]
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE
REGISTRATION STATEMENT.
OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO
A RELATED PARTY (AS DEFINED IN THE DECLARATION) OF VANSTAR CORPORATION.
Certificate Number Number of Common Securities
Common Securities
of
Vanstar Financing Trust
6 3/4% Trust Convertible Common Securities
(liquidation amount $50 per Trust Convertible Common Security)
Vanstar Financing Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
___________________________________________________________________________
(the "Holder") is the registered owner of ________________ (_______) common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 6 3/4% Trust Convertible Common Securities
(liquidation amount $50 per Trust Convertible Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Trust dated as of October 2, 1996, as the same
may be amended from time to time (the "Declaration"), including the designation
of the terms of the Common Securities as set forth in Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the
A2-1
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Common Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Sponsor at its principal
place of business.
Reference is hereby made to select provisions of the Common Securities
set forth on the reverse hereof, which select provisions shall for all
purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States federal
income tax purposes the Debentures as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Debentures.
A2-2
IN WITNESS WHEREOF, the Trust has executed this certificate on
____________,_____.
VANSTAR FINANCING TRUST
By:
----------------------------------------
Name:
Title: Regular Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned
Declaration.
Dated: __________, _____
WILMINGTON TRUST COMPANY
as Property Trustee
By:
---------------------------------------
Authorized Signatory
A2-3
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 6 3/4% (the "Coupon Rate") of the stated liquidation amount of
$50 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distribution" as used herein includes any such interest including any
Additional Interest, Compounded Interest and Liquidated Damages payable
unless otherwise stated, and any premium and/or principal payable on the
Debentures. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee and to the
extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months,
and for any period shorter than a full quarterly Distribution period for
which Distributions are computed, Distributions will be computed on the basis
of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on January 1, April 1, July 1 and
October 1 of each year, commencing on January 1, 1997, to Holders of record
fifteen (15) days prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for
successive periods not exceeding 20 consecutive quarters (each an "Extension
Period") during which Extension Period no interest shall be due and payable
on the Debentures; PROVIDED, that no Extension Period shall last beyond the
date of maturity of the Debentures. As a consequence of such extension,
Distributions will also be deferred. Despite such extension, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period;
PROVIDED, that such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarters. Payments
of accrued Distributions will be payable to Holders as they appear on the
books and records of the Trust on the first record date after the end of the
Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
The Common Securities shall be convertible into shares of Common Stock
of Vanstar Corporation, through (i) the exchange of Common Securities for a
portion of the Debentures and (ii) the immediate conversion of such
Debentures into Common Stock of Vanstar Corporation, in the manner and
according to the terms set forth in the Declaration.
A2-4
CONVERSION REQUEST
To: Wilmington Trust Company
as Property Trustee of
Vanstar Financing Trust
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of VANSTAR CORPORATION (the "Vanstar Common
Stock") in accordance with the terms of the Amended and Restated Declaration
of Trust (the "Declaration"), dated as of October 2, 1996, by Xxxx X.
Xxxxxxx, Xx., as Regular Trustee, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Property Trustee, Vanstar Corporation,
as Sponsor, and by the Holders, from time to time, of individual beneficial
interests in the Trust to be issued pursuant to the Declaration. Pursuant to
the aforementioned exercise of the option to convert these Common Securities,
the undersigned hereby directs the Conversion Agent (as that term is defined
in the Declaration) to (i) exchange such Common Securities for a portion of
the Debentures (as that term is defined in the Declaration) held by the Trust
(at the rate of exchange specified in the terms of the Common Securities set
forth as Annex I to the Declaration) and (ii) immediately convert such
Debentures on behalf of the undersigned, into Vanstar Common Stock (at the
conversion rate specified in the terms of the Common Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the
A2-5
assignment below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto.
Date: ___________________, ___
in whole ___ in part ___
Number of Common Securities to be
converted:
------------------------------------------
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Vanstar Common Stock are to be issued,
along with the address or addresses of such
person or persons:
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number:
------------------------------------------
------------------------------------------
------------------------------------------
Signature Guarantee:*
--------------------
-------------------
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the 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.)
A2-6
ASSIGNMENT FORM
To assign this Common Security, fill in the form below:
(I) or (we) assign and transfer this Common Security to
-----------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint______________________________________________________
agent to transfer this Common Security on the books of the Company. The agent
may substitute another to act for him.
Your Signature:________________________________
(Sign exactly as your name appears on the other
side of this Security)
Date:__________________________________________
Signature Guarantee:*__________________________
[Include the following if the Common Security bears a Restricted Securities
Legend --
In connection with any transfer of any of the Common Securities evidenced by
this certificate, the undersigned confirms that such Common Securities are
being:
CHECK ONE BOX BELOW
(1) / / exchanged for the undersigned's own account without transfer; or
(2) / / transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
------------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the NYSE.
(3) / / transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(4) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(5) / / transferred pursuant to an effective Shelf Registration
Statement.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Common Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; PROVIDED, HOWEVER, that if
box (3) or (4) is checked, the Trustee may require, prior to registering any
such transfer of the Common Securities such legal opinions, certifications
and other information as the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act.
------------------------------------------
Signature
Signature Guarantee:*
------------------------------ ------------------------------------------]
Signature must be guaranteed Signature
-----------------------------------------------------------------------------
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Common Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
------------------------- ------------------------------------------
NOTICE: To be executed by an executive
officer.]
-------------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the NYSE.
-2-
EXHIBIT B
SPECIMEN OF DEBENTURE
[FORM OF FACE OF SECURITY]
THIS SECURITY AND ANY COMMON STOCK ISSUED ON CONVERSION HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY, PRIOR TO THE DATE WHICH IS THREE YEARS AFTER (OR SUCH SHORTER
PERIOD UNDER RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR RULE) THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH VANSTAR
CORPORATION (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRANSFER AGENTS RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (i) PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
-1-
VANSTAR CORPORATION
6 3/4% Convertible Subordinated
Debenture due 2016
No.________ $_________________
CUSIP No.
VANSTAR CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company", which terms include
any successor corporation under the Indenture hereinafter referred to) for value
received, hereby promises to pay to __________________________________________,
or registered assigns, the principal sum [indicated on Schedule A
hereof]* [of ____________________________ Dollars]
($ ) on October 1, 2016.
Interest Payment Dates: January 1, April 1, July 1 and October 1,
commencing January 1, 1997
Regular Record Dates: the close of business on the Business Day
immediately preceding each Interest Payment Date,
except as otherwise provided in clause 4 set forth
on the reverse side of this Security
Reference is hereby made to the further provisions of this Security 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 Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-------------------
* Applicable to Global Securities only.
** Applicable to certificated Securities only.
-2-
IN WITNESS WHEREOF, the Company has caused this instrument to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated:
VANSTAR CORPORATION
By:
--------------------------------------------
Title:
-----------------------------------------
[Seal]
Attest:
-----------------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: WILMINGTON TRUST COMPANY,
as Trustee
By:
--------------------------------------------
Authorized Signatory
-3-
[FORM OF REVERSE OF SECURITY]
VANSTAR CORPORATION
6 3/4% Convertible Subordinated
Debenture due 2016*
(i) INTEREST. Vanstar Corporation, a Delaware corporation (the
"Company"), is the issuer of this 6 3/4% Convertible Subordinated Debenture
due 2016 (the "Security") limited in aggregate principal amount to
$180,412,350 (or $207,474,200 if the over-allotment option is exercised),
issued under the Indenture hereinafter referred to. The Company promises to
pay interest on the Securities in cash from October 2, 1996 or from the most
recent interest payment date to which interest has been paid or duly provided
for, quarterly (subject to deferral for up to 20 consecutive quarters as
described in Section 3 hereof) in arrears on January 1, April 1, July 1, and
October 1 of each year (each such date, an "Interest Payment Date"),
commencing January 1, 1997, at the rate of 6 3/4% per annum (subject to
increase as provided in Section 12 hereto) PLUS Additional Interest, Compound
Interest and Liquidated Damages if any, until the principal hereof shall have
become due and payable.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed will be computed
on the basis of the actual number of days elapsed. In the event that any
date on which interest is payable on the Securities is not a Business Day,
then payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (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.
(ii) ADDITIONAL INTEREST. The Company shall pay to Vanstar Financing
Trust (and its permitted successors or assigns under the Declaration) (the
"Trust") such amounts as shall be required so that the net amounts received and
retained by the Trust after paying any taxes, duties, assessments or other
governmental charges of whatever nature (other than withholding taxes) imposed
on the Trust by the United States or any other taxing authority ("Additional
Interest") will be not less than the amounts the Trust would have received had
no such taxes, duties, assessment or governmental charges been imposed.
---------------------------
* All terms used in this Security which are defined in the Indenture or
in the Declaration attached as Annex A thereto shall have the meanings assigned
to them in the Indenture or the Declaration, as the case may be.
-4-
(iii) OPTION TO EXTEND INTEREST PAYMENT PERIOD. The Company
shall have the right at any time during the term of the Securities to defer
interest payments from time to time by extending the interest payment period
for successive periods (each, an "Extension Period") not exceeding 20
consecutive quarters for each such period; PROVIDED, no Extension Period may
extend beyond the maturity date of the Securities. At the end of each
Extension Period, the Company shall be responsible for the payment of, and
the Company shall pay all interest then accrued and unpaid (including
Additional Interest and Liquidated Damages) together with interest thereon
compounded quarterly at the rate specified for the Securities to the extent
permitted by applicable law ("Compounded Interest"); PROVIDED, that during
any Extension Period, the Company shall not, and shall not allow any of its
Subsidiaries (other than, with respect to clause (i) below only, its wholly
owned Subsidiaries) to, (i) declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation
payment with respect to, any of its capital stock (except for (1) dividends
or distributions in shares of Common Stock on Common Stock or on the
Preferred Stock, (2) purchases or acquisitions of shares of Common Stock made
in connection with any employee benefit plan of the Company or its
subsidiaries in the ordinary course of business or pursuant to employment
agreements with officers or employees of the Company or its subsidiaries
entered into in the ordinary course of business, provided that such
repurchases by the Company made from officers or employees of the Company or
its subsidiaries pursuant to employment agreements shall be made at a price
not to exceed market value on the date of any such repurchase and shall not
exceed $1 million in the aggregate for all such employees and officers, (3)
conversions or exchanges of shares of Common Stock of any one class into
shares of Common Stock of another class or (4) purchases of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of any of the Company's securities being converted or
exchanged), (ii) make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem, any debt securities issued by the Company
that rank junior to or PARI PASSU with the Securities and (iii) make any
guarantee payments with respect to the foregoing. Prior to the termination of
any such Extension Period, the Company may further extend such Extension
Period; PROVIDED, that such Extension Period together with all previous and
further extensions thereof may not exceed 20 consecutive quarters and may not
extend beyond the maturity of the Securities. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the above requirements. No
interest during an Extension Period, except at the end thereof, shall be due
and payable.
If the Property Trustee is the sole holder of the Securities at the
time the Company selects an Extension Period, the Company shall give notice
to the Regular Trustees, the Property Trustee and the Trustee of its
selection of such Extension Period at least one Business Day prior to the
earlier of (i) the date the distributions on the Preferred Securities are
payable or (ii) if the Preferred Securities are listed on the New York Stock
Exchange, Inc. ("NYSE") or other stock exchange or quotation system, the date
the Trust is required to give notice to the NYSE or other applicable
self-regulatory organization or to holders of the Preferred Securities on the
record date or the date such distributions are payable, but in any event not
less than ten Business Days prior to such record date.
-5-
If the Property Trustee is not the sole holder of the Securities at
the time the Company selects an Extension Period, the Company shall give the
Holders and the Trustee notice of its selection of an Extension Period at
least ten Business Days prior to the earlier of (i) the next succeeding
Interest Payment Date or (ii) if the Preferred Securities are listed on the
NYSE or other stock exchange or quotation system, the date the Company is
required to give notice to NYSE or other applicable self-regulatory
organization or to holders of the Securities on the record or payment date of
such related interest payment, but in any event not less than two Business
Days prior to such record date.
The quarter in which any notice is given pursuant to the second and
third paragraphs of this Section 3 shall be counted as one of the 20 quarters
permitted in the maximum Extension Period permitted under the first paragraph
of this Section 3.
(iv) METHOD OF PAYMENT. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
regular record date for such interest installment, which shall be the close
of business on the Business Day immediately preceding each Interest Payment
Date; provided, however, that, for so long as the Securities are held by the
Trust or the Property Trustee of the Trust, if any Preferred Securities (or
if the Trust is liquidated in connection with Special Event, any Securities)
are held in certificated form, the Record Date for each Interest Payment Date
shall be 15 days prior to such Interest Payment Date (in each case, a
"Regular Record Date"). Any such interest 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
Security (or one or more Predecessor Securities) 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 of which shall be given to
Holders of Securities not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
Payment of the principal of and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in
New York, New York, 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 by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
(v) PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT. The
Trustee will act as Paying Agent, Security Registrar and Conversion Agent.
The Company may change any Paying Agent, Security Registrar, co-registrar or,
with the consent of the Trust, Conversion Agent without prior notice. The
Company or any of its Affiliates may act in any such capacity.
-6-
(vi) INDENTURE. The Company issued the Securities under an
indenture, dated as of October 2, 1996 (the "Indenture"), between the Company
and Wilmington Trust Company, as Trustee (herein called 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, and of the
terms upon which the Securities are, and are to be, authenticated and
delivered. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by the Trust Indenture Act of 1939 (15
U.S. Code Sections 77aaa-77bbbb) ("TIA") as in effect on the date of the
Indenture. The Securities are subject to, and qualified by, all such terms,
certain of which are summarized hereon, and Holders are referred to the
Indenture and the TIA for a statement of such terms. The Securities are
unsecured general obligations of the Company limited to $180,412,350 in
aggregate principal amount (or $207,474,200 if the overallotment option is
exercised). No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
(vii) OPTIONAL REDEMPTION. The Securities are redeemable, in
whole or in part, at the Company's, option at any time and from time to time
on or after October 5, 1999, upon not less than 30 nor more than 60 days'
notice, at the following optional redemption prices (expressed as a
percentage of the principal amount of the Securities) if redeemed during the
12-month period beginning October 1 of the year shown below (October 5, in
the case of 1999):
Percentage of
Year Principal Year Amount
---- ---------------------
2000. . . . . . . . . . . . . . . . . . 104.050%
2001. . . . . . . . . . . . . . . . . . 103.375
2002. . . . . . . . . . . . . . . . . . 102.700
2003. . . . . . . . . . . . . . . . . . 102.025
2004. . . . . . . . . . . . . . . . . . 101.350
2005. . . . . . . . . . . . . . . . . . 100.675
2006 and thereafter. . . . . . . . . . 100.000
plus, in each case, accrued and unpaid interest, including Additional
Interest, Compounded Interest and Liquidated Damages, if any, to the
Redemption Date. On or after the Redemption Date, interest will cease to
accrue on the Securities, or portion thereof, called for redemption.
(viii) OPTIONAL REDEMPTION UPON TAX EVENT. The Securities are
subject to redemption in whole (but not in part), at any time within 90 days
thereafter, if a Tax Event (as defined in the Declaration) shall occur and be
continuing, at the applicable redemption price set forth above (or, for the
period commencing on the date of issuance of the Securities through October
4, 1997 and the twelve month periods commencing October 5, 1997 and October
5, 1998, the product of 106.750%, 106.075% and 105.400%, respectively, times
$50), in each case
-7-
plus accrued but unpaid interest, including Additional Interest, Compounded
Interest and Liquidated Damages, if any, to the Redemption Date. Any
redemption pursuant to this Section 8 will be made upon not less than 30 nor
more than 60 days' notice.
(ix) NOTICE OF REDEMPTION. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the Redemption Date to each
Holder of the Securities to be redeemed at his address of record. The
Securities in denominations larger than $50 may be redeemed in part but only
in integral multiples of $50. In the event of a redemption of less than all
of the Securities, the Securities will be chosen for redemption by the
Trustee in accordance with the Indenture. On and after the Redemption Date,
interest ceases to accrue on the Securities or portions of them called for
redemption. If this Security is redeemed subsequent to a Regular Record Date
with respect to any Interest Payment Date specified above and on or prior to
such Interest Payment Date, then any accrued interest will be paid to the
person in whose name this Security is registered at the close of business on
such record date.
(x) REDEMPTION. The Securities will mature on October 1,
2016, and may be redeemed, in whole or in part, at any time after October 5,
1999 as set forth above or at any time in certain circumstances upon the
occurrence of a Tax Event as set forth above. Upon the repayment of the
Securities, whether at maturity or upon redemption, the proceeds from such
repayment or payment shall simultaneously be applied to redeem Trust
Securities having an aggregate liquidation amount equal to the Securities so
repaid or redeemed at the applicable redemption price together with accrued
and unpaid distributions through the date of redemption; PROVIDED, that
holders of the Trust Securities shall be given not less than 30 nor more than
60 days notice of such redemption. Upon the repayment of the Securities at
maturity or upon any acceleration, earlier redemption or otherwise, the
proceeds from such repayment will be applied to redeem the Preferred
Securities, in whole, upon not less than 30 nor more than 60 days' notice.
There are no sinking fund payments with respect to the Securities.
(xi) CONVERSION. The Holder of any Security has the right,
exercisable at any time prior to the close of business (New York time) on the
Business Day immediately preceding the date of repayment of such Security
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 the number of
shares of Common Stock obtained by dividing $50 per Security by the
applicable conversion price (initially $28.75 per share of Common Stock for
each Security) (equivalent to a conversion rate of 1.739 shares per share of
Common Stock of the Company per Security), subject to adjustment under
certain circumstances as set forth in the Indenture.
To convert a Security, a Holder must (1) complete and sign a
conversion notice substantially in the form attached hereto, (2) surrender
the Security to a Conversion Agent, (3) furnish appropriate endorsements or
transfer documents if required by the Security Registrar or Conversion Agent
and (4) pay any transfer or similar tax, if required. Upon conversion, no
adjustment or payment will be made for interest or dividends, but if any
Holder surrenders a Security for conversion after the close of business on
the Regular Record Date for the payment of
-8-
an installment of interest and prior to the opening of business on the next
Interest Payment Date, then, notwithstanding such conversion, the interest
payable on such Interest Payment Date will be paid to the registered Holder
of such Security on such Regular Record Date. In such event, such Security,
when surrendered for conversion, need not be accompanied by payment of an
amount equal to the interest payable on such Interest Payment Date on the
portion so converted. The number of shares issuable upon conversion of a
Security is determined by dividing the principal amount of the Security
converted by the conversion price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will
be made for any fractional interest. The Outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Common Stock.
(xii) REGISTRATION RIGHTS. The holders of the Preferred
Securities, the Securities, the Guarantee and the shares of Common Stock of
the Company issuable upon conversion of the Securities (collectively, the
"REGISTRABLE SECURITIES") are entitled to the benefits of a Registration
Rights Agreement, dated as of October 2, 1996, among the Company, the Trust
and the Initial Purchasers (the "Registration Rights Agreement"). Pursuant
to the Registration Rights Agreement, the Company has agreed for the benefit
of the holders of Registrable Securities that (i) it will, at its cost,
within 75 days after the date of issuance of the Registrable Securities, file
a shelf registration statement (the "Shelf Registration Statement") with the
Commission with respect to resales of the Registrable Securities, (ii) it
will use its reasonable efforts to cause, such Shelf Registration Statement
to be declared effective by the Commission within 135 days after the date of
issuance of the Registrable Securities and (iii) the Company will use its
reasonable efforts to maintain such Shelf Registration Statement continuously
effective under the Securities Act until the third anniversary of the
effectiveness of the Shelf Registration Statement or such earlier date as is
provided in the Registration Rights Agreement. Reference is made to the
Registration Rights Agreement for a description of, among other things, the
circumstances under which a "Registration Default" may be declared if such
Shelf Registration Statement is not filed or is not declared effective within
a specified period of time, and additional interest "Liquidated Damages" may
accrue and by payable on the Securities as a result of such a Registration
Default.
(xiii) REGISTRATION, TRANSFER, EXCHANGE AND DENOMINATIONS. As
provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in New York, New York or Wilmington, Delaware, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities are issuable only in registered form without coupons
in denominations of $50 and integral multiples thereof. 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
-9-
to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary. In the event of redemption or conversion of this Security in part
only, a new Security or Securities for the unredeemed or unconverted portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
(xiv) PERSONS DEEMED OWNERS. Except as provided in Section 4
hereof, the registered Holder of a Security may be treated as its owner for
all purposes.
(xv) UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent
shall pay the money back to the Company at its written request. After that,
holders of Securities entitled to the money must look to the Company for
payment unless an abandoned property law designates another Person and all
liability of the Trustee and such Paying Agent with respect to such money
shall cease.
(xvi) DEFAULTS AND REMEDIES. The Securities shall have the
Events of Default as set forth in Section 501 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company, or the holders of at least
25% in aggregate principal amount of the then Outstanding Securities by
notice to the Company and the Trustee, may declare all the Securities to be
due and payable immediately.
The holders of a majority in principal amount of the Securities
then Outstanding by written notice to the Trustee may rescind an acceleration
and its consequences if the rescission is prior to a judgment or decree for
the payment of the money due has been obtained by the Trustee as provided in
the Indenture and if all existing Events of Default have been cured or waived
except nonpayment of principal and/or interest that has become due solely
because of the acceleration. Holders may not enforce the Indenture or the
Securities except as provided in the Indenture. Subject to certain
limitations, holders of a majority in principal amount of the then
Outstanding Securities issued under the Indenture may direct the Trustee in
its exercise of any trust or power. The Company must furnish annually
compliance certificates to the Trustee. The above description of Events of
Default and remedies is qualified by reference to, and subject in its
entirety by, the more complete description thereof contained in the
Indenture.
(xvii) AMENDMENTS, SUPPLEMENTS AND WAIVERS. The Indenture
permits, with certain exceptions as therein provided, the amendment thereof
and the modification of the rights and obligations of the Company and the
rights of the Holders of the Securities under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, 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
-10-
of this Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security 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 Security.
(xviii) TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate with the
same rights it would have, as if it were not Trustee, subject to certain
limitations provided for in the Indenture and in the TIA. Any Agent may do
the same with like rights.
(xix) NO RECOURSE AGAINST OTHERS. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
(xx) GOVERNING LAW. THE INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
(xxi) AUTHENTICATION. The Securities shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Trustee or an authenticating agent.
The Company will furnish to any Holder of the Securities upon
written request and without charge a copy of the Indenture. Request may be
made to:
Vanstar Corporation
0000 Xxxx Xxx Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention of: Chief Financial Officer
Facsimile: (000) 000-0000
-11-
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
-----------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ___________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Your Signature:
---------------------------
(Sign exactly as your name appears on the
other side of this Security)
Date:
-------------------------------------
Signature Guarantee:*
---------------------
[Include the following if the Security bears a Restricted Securities Legend --
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW
(1) / / exchanged for the undersigned's own account without transfer;
or
(2) / / transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
-------------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the NYSE.
(3) / / transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(5) / / transferred pursuant to an effective Shelf Registration
Statement.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; PROVIDED, HOWEVER, that if box (3)
or (4) is checked, the Trustee may require, prior to registering any such
transfer of the Securities such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such
as the exemption provided by Rule 144 under such Act.
------------------------------------------
Signature
Signature Guarantee:*
----------------------------- ------------------------------------------]
Signature must be guaranteed Signature
-----------------------------------------------------------------------------
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:-------------------------- ---------------------------------------
NOTICE: To be executed by an executive
officer.]
-------------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the NYSE.
-2-
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE A
The initial principal amount of this Global Security shall be $__________.
The following increases or decreases in the principal amount of this Global
Security have been made:
Amount of increase in
Principal Amount of
this Global Security Principal Amount of Signature of
including upon Amount of decrease in this Global Security authorized officer of
exercise of over- Principal Amount of following such Trustee or Securities
Date Made allotment option this Global Security decrease or increase Custodian
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-3-
ELECTION TO CONVERT
To: Vanstar Corporation
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion below designated, into Common
Stock of Vanstar Corporation in accordance with the terms of the Indenture
referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If
shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Any holder, upon the exercise of its conversion rights in accordance
with the terms of the Indenture and the Security, agrees to be bound by the
terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the Securities.
Date:
---------------------
in whole ___ Portions of Security to be in part
in part ___ converted ($50 or integral multiples
thereof):
$
----------------------------------------------
----------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
----------------------------------------------
----------------------------------------------
----------------------------------------------
Signature Guarantee:*
-------------------------
-------------------
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
EXHIBIT D
FORM OF TRANSFEROR CERTIFICATE FOR TRANSFER DURING THE EFFECTIVENESS OF A
SHELF REGISTRATION STATEMENT (UNLESS THE USE THEREOF HAS BEEN SUSPENDED)
WILMINGTON TRUST COMPANY, AS PROPERTY TRUSTEE
XXXXXX SQUARE NORTH
0000 XXXXX XXXXXX XXXXXX
XXXXXXXXXX, XXXXXXXX 00000-0000
ATTN: CORPORATE TRUST ADMINISTRATION
RE: VANSTAR FINANCING TRUST
Reference is hereby made to the Amended and Restated Declaration of Trust
dated as of __________ __, 1996 (the "Declaration"), by _______________,
_______________ and ________________, as Regular Trustees, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee and
Vanstar Corporation, as Sponsor. Capitalized terms used but not defined herein
shall have the meanings given them in the Declaration.
This letter relates to Preferred Securities which are held in the form of
the [Rule 144A Global Preferred Security with the Depositary (CUSIP
No. )] [a Restricted Definitive Preferred Security (CUSIP
No. )] in the name of name of transferor] (the "Transferor") to effect
the transfer of such Preferred Securities in exchange for an equivalent
beneficial interest in the Exchanged Global Preferred Security.
In connection with such request, and in respect of such Preferred
Securities, the Transferor does hereby certify that (i) such Preferred
Securities are being transferred in accordance with and pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the "Act"),
and in accordance with any applicable securities laws of any state of the United
States and (ii) the Transferor has complied with its obligations to provide
information to the Issuer, as required by the Registration Rights Agreement, and
with its obligations, if any, under the Act with regard to the delivery of a
prospectus.
[NAME OF TRANSFEROR]
By:
---------------------------------
Name:
Title:
Dated:
----------------------------
cc: Chief Financial Officer,
Vanstar Corporation
EXHIBIT E
FORM OF CERTIFICATE OF TRUST
CERTIFICATE OF TRUST OF VANSTAR FINANCING TRUST
THIS Certificate of Trust of Vanstar Financing Trust (the "Trust"), dated
September 25, 1996, is being duly executed and filed by Wilmington Trust
Company, a Delaware banking corporation, as trustee, to form a business trust
under the Delaware Business Trust Act (12 DEL. C. Section 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is Vanstar
Financing Trust.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000-0000, Attention: Corporate
Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY, as trustee
By: /s/ XXXXXXXX X. XXXXX
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Financial Services Officer
