Exhibit 4.3
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HOST MARRIOTT CORPORATION
to
IBJ XXXXXXXX BANK & TRUST COMPANY
as Trustee
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INDENTURE
Dated as of December 2, 1996
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6 3/4% CONVERTIBLE SUBORDINATED DEBENTURE
DUE DECEMBER 2, 2026
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Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 317
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1990, are a part of and govern the Indenture whether
or not physically contained therein) and the Indenture, dated as of December 2,
1996.
Trust Indenture Indenture Section
Act Section
(S) 310(a)(1), (2) and (5)...................................................6.9
(a)(3).....................................................Not Applicable
(a)(4).....................................................Not Applicable
(b)...................................................................6.8
.....................................................................6.10
(c)........................................................Not Applicable
(S) 311(a)..................................................................6.13
(b)..................................................................6.13
(b)(2).............................................................7.3(a)
...................................................................7.3(a)
(S) 312(a)...................................................................7.1
...................................................................7.2(a)
(b)................................................................7.2(b)
(c)................................................................7.2(c)
(S) 313(a)........................................................7.3(a), 7.3(b)
(b)................................................................7.3(a)
(c)................................................................7.3(a)
(d)................................................................7.3(c)
(S) 314(a)(1), (2),(3) and (4)...............................................7.4
(b)........................................................Not Applicable
(c)(1)................................................................1.2
(c)(2)................................................................1.2
(c)(3).....................................................Not Applicable
(d)........................................................Not Applicable
(e)...................................................................1.2
(f)........................................................Not Applicable
(S) 315(a)................................................................6.1(a)
(b)...................................................................6.2
(c)................................................................6.1(b)
(d)................................................................6.1(c)
(d)(1)..........................................................6.1(a)(1)
(d)(2)..........................................................6.1(c)(2)
(d)(3)..........................................................6.1(c)(3)
(e)..................................................................5.14
(S) 316(a)..................................................................5.12
(a)(1)(B)............................................................5.13
(a)(2).....................................................Not Applicable
(b)...................................................................5.8
(c)................................................................1.4(f)
(S) 317(a)(1)................................................................5.3
(a)(2)................................................................5.4
(b)..................................................................10.3
(S) 318(a)...................................................................1.7
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Convertible Subordinated Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions................................................... 1
SECTION 1.2. Compliance Certificate and Opinions........................... 15
SECTION 1.3. Forms of Documents Delivered to Trustee....................... 16
SECTION 1.4. Acts of Holders............................................... 17
SECTION 1.5. Notices, Etc. to Trustee and Company.......................... 19
SECTION 1.6. Notice to Holders; Waiver..................................... 19
SECTION 1.7. Conflict with Trust Indenture Act............................. 20
SECTION 1.8. Effect of Headings and Table of Contents...................... 20
SECTION 1.9. Successors and Assigns........................................ 20
SECTION 1.10. Separability Clause........................................... 20
SECTION 1.11. Benefits of Indenture......................................... 20
SECTION 1.12. Governing Law................................................. 20
SECTION 1.13. Non-Business Days............................................. 20
ARTICLE 2
DEBENTURE FORM
SECTION 2.1. Forms Generally............................................... 21
SECTION 2.2. Form of Face of Debenture..................................... 21
SECTION 2.3. Form of Reverse of Debenture.................................. 22
SECTION 2.4. Additional Provisions Required in Global Debenture............ 35
SECTION 2.5. Form of Trustee's Certificate of Authentication............... 35
SECTION 2.6. Initial Issuance to Property Trustee.......................... 36
ARTICLE 3
THE DEBENTURES
SECTION 3.1. Amount of Debentures.......................................... 36
SECTION 3.2. Denominations................................................. 37
SECTION 3.3. Execution, Authentication, Delivery and Dating................ 37
SECTION 3.4. Temporary Debentures.......................................... 37
SECTION 3.5. Registration, Transfer and Exchange........................... 38
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SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Debentures.............. 40
SECTION 3.7. Payment of Interest; Interest Rights Preserved................ 41
SECTION 3.8. Persons Deemed Owners......................................... 43
SECTION 3.9. Cancellation.................................................. 43
SECTION 3.10. Computation of Interest....................................... 43
SECTION 3.11. Deferrals of Interest Payment Dates........................... 43
SECTION 3.12. Right of Set-off.............................................. 45
SECTION 3.13. Agreed Tax Treatment.......................................... 45
SECTION 3.14. CUSIP Numbers................................................. 45
SECTION 3.15. Global Security............................................... 45
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture....................... 47
SECTION 4.2. Application of Trust Money.................................... 49
ARTICLE 5
REMEDIES
SECTION 5.1. Events of Default............................................. 49
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment............ 51
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee.................................................... 52
SECTION 5.4. Trustee May File Proofs of Claim.............................. 53
SECTION 5.5. Trustee May Enforce Claim Without Possession of Debentures.... 54
SECTION 5.6. Application of Money Collected................................ 55
SECTION 5.7. Limitation on Suits........................................... 55
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest.................................................. 56
SECTION 5.9. Restoration of Rights and Remedies............................ 57
SECTION 5.10. Rights and Remedies Cumulative................................ 57
SECTION 5.11. Delay or Omission Not Waiver.................................. 57
SECTION 5.12. Control by Holders............................................ 58
SECTION 5.13. Waiver of Past Defaults....................................... 59
SECTION 5.14. Undertaking for Costs......................................... 59
SECTION 5.15. Waiver of Usury, Stay, or
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Extension Laws................................................ 60
ARTICLE 6
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities........................... 60
SECTION 6.2. Notice of Defaults............................................ 62
SECTION 6.3. Certain Rights of Trustee..................................... 62
SECTION 6.4. Not Responsible for Recitals or Issuance of Debentures........ 64
SECTION 6.5. May Hold Debentures........................................... 64
SECTION 6.6. Money Held in Trust........................................... 64
SECTION 6.7. Compensation and Reimbursement................................ 64
SECTION 6.8. Disqualification; Conflicting Interests....................... 65
SECTION 6.9. Corporate Trustee Required; Eligibility....................... 65
SECTION 6.10. Resignation and Removal; Appointment of Successor............. 66
SECTION 6.11. Acceptance of Appointment by Successor........................ 68
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business... 68
SECTION 6.13. Preferential Collection of Claims Against Company............. 69
SECTION 6.14. Appointment of Authenticating Agent........................... 69
ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Names and Addresses of Holders............. 71
SECTION 7.2. Preservation of Information: Communications to Holders........ 71
SECTION 7.3. Reports by Trustee............................................ 72
SECTION 7.4. Reports by Company............................................ 72
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.......... 73
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SECTION 8.2. Successor Corporation Substituted............................. 74
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders........... 75
SECTION 9.2. Supplemental Indentures with Consent of Holders.............. 76
SECTION 9.3. Execution of Supplemental Indentures......................... 78
SECTION 9.4. Effect of Supplemental Indentures............................ 78
SECTION 9.5. Conformity with Trust Indentures Act......................... 78
SECTION 9.6. Reference in Debentures to Supplemental Indentures........... 78
ARTICLE 10
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest................... 79
SECTION 10.2. Maintenance of Office or Agency.............................. 79
SECTION 10.3. Money for Debenture Payments to Be Held in Trust............. 79
SECTION 10.4. Payment of Taxes and Other Claims............................ 81
SECTION 10.5. Statement as to Compliance................................... 81
SECTION 10.6. Waiver of Certain Covenants.................................. 82
SECTION 10.7. Additional Sums.............................................. 82
SECTION 10.8. Additional Covenants......................................... 83
SECTION 10.9. Registration Rights.......................................... 84
SECTION 10.10. Payment of Expenses of the Trust............................. 84
ARTICLE 11
REDEMPTION OR EXCHANGE OF DEBENTURES
SECTION 11.1. Election to Redeem; Notice to Trustee........................ 85
SECTION 11.2. Selection of Debentures to Be Redeemed....................... 85
SECTION 11.3. Notice of Redemption......................................... 86
SECTION 11.4. Deposit of Redemption Price.................................. 87
SECTION 11.5. Debentures Payable on Redemption Date........................ 87
SECTION 11.6. Debentures Redeemed in Part.................................. 88
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SECTION 11.7. Mandatory Redemption......................................... 89
SECTION 11.8. Optional Redemption.......................................... 89
SECTION 11.9. Exchange of Trust Securities for Debentures.................. 90
ARTICLE 12
SUBORDINATION OF DEBENTURES
SECTION 12.1. Debentures Subordinate to Senior Debt........................ 91
SECTION 12.2. Payment Over of Proceeds Upon Dissolution, Etc............... 91
SECTION 12.3. Prior Payment to Senior Debt upon Acceleration of
Debentures................................................... 93
SECTION 12.4. No Payment When Senior Debt in Default....................... 93
SECTION 12.5. Payment Permitted If No Default.............................. 94
SECTION 12.6. Subrogation to Rights of Holders of Senior Debt.............. 94
SECTION 12.7. Provisions Solely to Define Relative Rights.................. 95
SECTION 12.8. Trustee to Effectuate Subordination.......................... 96
SECTION 12.9. No Waiver of Subordination Provisions........................ 96
SECTION 12.10. Notice to Trustee............................................ 96
SECTION 12.11. Reliance on Judicial Order or Certificate of Liquidating
Agent........................................................ 96
SECTION 12.12. Trustee Not Fiduciary for Holders of Senior Debt............. 97
SECTION 12.13. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights......................................... 97
SECTION 12.14. Article Applicable to Paying Agents.......................... 97
SECTION 12.15. Certain Conversions or Exchanges Deemed Payment.............. 97
ARTICLE 13
CONVERSION OF DEBENTURES
SECTION 13.1. Conversion Rights............................................. 98
SECTION 13.2. Conversion Procedures......................................... 98
SECTION 13.3. Expiration of Conversion Rights...............................102
SECTION 13.4. Conversion Price Adjustments..................................104
SECTION 13.5. Fundamental Change............................................109
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SECTION 13.6. Notice of Adjustments of Conversion Price.....................111
SECTION 13.7. Prior Notice of Certain Events................................112
SECTION 13.8. Dividend or Interest Reinvestment Plans.......................113
SECTION 13.9. Certain Additional Rights.....................................114
SECTION 13.10. Restrictions on Common Stock Issuable Upon Conversion.........115
SECTION 13.11. Trustee Not Responsible for Determining Conversion Price
or Adjustments................................................115
vi
CONVERTIBLE SUBORDINATED INDENTURE, dated as of December 2, 1996
between HOST MARRIOTT CORPORATION, a Delaware corporation (hereinafter called
the "Company") having its principal office at 00000 Xxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, and IBJ XXXXXXXX BANK & TRUST COMPANY, a New York banking
corporation ("IBJ Xxxxxxxx"), as Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its 6 3/4% Convertible Subordinated
Debentures (hereinafter called the "Debentures") of substantially the tenor
hereinafter provided which evidence loans made to the Company of the proceeds
from the issuance by Host Marriott Financial Trust, a Delaware business trust
(the "Trust"), of preferred trust interests in the Trust (the "Preferred
Securities") and common interests in the Trust (the "Common Securities"), and to
provide the terms and conditions upon which the Debentures are to be
authenticated, issued and delivered.
All things necessary to make the Debentures, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Debentures, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions. For all purpose of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles which are generally
accepted at the date or time of such computation; and
(d) the words "herein" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Debentures that is in arrears for more than one interest
payment period or not paid during any Extension Period, which in either case
shall accrue at the stated rate per annum specified or determined as specified
in such Debenture and compounded quarterly.
"Additional Sums" has the meaning specified in Section 10.7.
"Additional Taxes" means the sum of any additional taxes, duties and
other governmental charges to which the Trust has become subject from time to
time as a result of a Tax Event.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Company shall not be deemed to include the Trust to
2
which Debentures have been issued. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Price" means (i) in the case of a Non-Stock Fundamental
Change in which the holders of the Common Stock receive only cash, the amount of
cash received by the holder of one share of Common Stock and (ii) in the event
of any other Non-Stock Fundamental Change or any Common Stock Fundamental
Change, the average of the Closing Prices for the Common Stock during the ten
trading days prior to and including the record date for the determination of the
holders of Common Stock entitled to receive such securities, cash, or other
property in connection with such Non-Stock Fundamental Change or Common Stock
Fundamental Change or, if there is no such record date, the date upon which the
holders of the Common Stock shall have the right to receive such securities,
cash, or other property, in each case as adjusted in good faith by the Company
to appropriately reflect any of the events referred to in Section 13.4.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Debentures.
"Board of Directors" means either the board of directors of the Company
or any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of the resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed or a day on which the
3
Corporate Trust Office of the Trustee, or the principal office of the Property
Trustee under the Trust Agreement, is closed for business.
"Closing Price" means on any day the reported last sale price on such
day or, in case no sale takes place on such day, the average of the reported
closing bid and asked prices in each case on the NYSE Consolidated Transactions
Tape or, if the stock is not listed or admitted to trading on such Exchange, on
the principal national securities exchange on which such stock is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as
furnished by any NYSE member firm, selected by the Trustee for that purpose.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock" means common stock, par value $1.00, of the Company.
"Common Stock Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of
Directors) of the consideration received by holders of Common Stock consists of
common stock that for each of the ten consecutive trading days prior to the
record date for the determination of the holders of Common Stock entitled to
receive such common stock or, if there is no such record date, the date on which
the holders of the Common Stock shall have the right to receive such Common
Stock, has been admitted for listing or admitted for listing subject to notice
of issuance on a national securities exchange or quoted on the Nasdaq National
Market; provided, however, that a Fundamental Change shall not be a Common Stock
Fundamental Change unless either (i) the Company continues to exist after the
occurrence of such Fundamental
4
Change and the outstanding Preferred Securities continue to exist as outstanding
Preferred Securities or (ii) not later than the occurrence of such Fundamental
Change, the outstanding Preferred Securities are converted into or exchanged for
shares of convertible preferred stock of an entity succeeding to the business of
the Company or a subsidiary thereof, which convertible preferred stock has
powers, preferences, and relative, participating, optional, or other rights, and
qualifications, limitations, and restrictions, substantially similar to those of
the Preferred Securities.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" and "Company Order" means, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board,
its Vice Chairman, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Controller, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Conversion Agent" has the meaning specified in Section 13.2.
"Conversion Date" has the meaning specified in Section 13.2.
"Conversion Expiration Date" means, subject to Section 13.3(c), the
date selected by the Company not less than 30 days nor more than 60 days after
the date on which the Company issues a press release announcing its intention to
terminate the conversion rights for the Holders.
"Conversion Price" has the meaning specified in Section 13.1.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at the date hereof is located at Xxx Xxxxx Xxxxxx, 00xx
0
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and Agency
Department.
"Current Market Price" means for any day the last reported sale price,
regular way, on such day of Common Stock, or, if no sale takes place on such
day, the average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the NYSE Composite Transactions Tape,
or, if the Common Stock is not listed or admitted to trading on the NYSE on such
day, on the principal national securities exchange on which the Common Stock is
listed or admitted to trading, if the Common Stock is listed on a national
securities exchange, or the Nasdaq National Market, or, if the Common Stock is
not quoted or admitted to trading on such quotation system, on the principal
quotation system on which the Common Stock may be listed or admitted to trading
or quoted, or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of the Common Stock in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or, if not so available in such manner, as
furnished by any NYSE member firm selected from time to time by the Board of
Directors for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Directors.
"Debentures" or "Debenture" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary
6
course of business); (v) every capital lease obligation of such Person, and
(vi) every obligation of the type referred to in clauses (i) through (v) of
another Person and all dividends of another Person the payment of which, in
either case, such Person has guaranteed or is responsible for or liable,
directly or indirectly, as obligor or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to the Debentures issuable or issued
in whole or in part in the form of one or more Global Debentures, the Person
designated as Depositary by the Company (or any successor thereto).
"Dollar" means the currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.
"Events of Default" has the meaning specified in Article 5.
"Expiration Time" has the meaning specified in Section 13.4(e).
"Extension Period" has the meaning specified in Section 3.11.
"Fundamental Change" means the occurrence of any Transaction or event
in connection with a plan pursuant to which all or substantially all of the
Common Stock shall be exchanged for, converted into, acquired for, or constitute
solely the right to receive securities, cash, or other property (whether by
means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization, or otherwise), provided, that,
in the case of a plan involving more than one such Transaction or event, for
purposes of adjustment of the conversion price, such Fundamental Change shall be
deemed to have occurred when substantially all of the Common Stock shall be
exchanged for, converted into, or acquired for or constitute solely the right to
receive securities, cash, or other property, but the adjustment shall be based
upon consideration that a holder of Common Stock received in such Transaction or
event as a result of which more than 50% of the Common
7
Stock shall have been exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash, or other property.
"Global Debenture" means a Debenture in the form prescribed in
Section 2.4 evidencing all or part of the Debentures, issued to the Depositary
or its nominee, and registered in the name of such Depositary or its nominee.
"Guarantee" means the guarantee by the Company of distributions on the
Preferred Securities of the Trust to the extent provided in the Guarantee
Agreement, substantially in the form attached hereto as Annex C, as amended from
time to time.
"Holder" means a Person in whose name a Debenture is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means as to the Debentures the Stated Maturity
of an installment of interest on such Debentures.
"Interest Rate" means the rate of interest specified or determined as
specified in each Debenture as being the rate of interest payable on such
Debenture.
"Investment Company Event" means, in respect of the Trust, the receipt
by the Property Trustee on behalf of the Trust of an Opinion of Counsel,
rendered by a law firm having a recognized national tax and securities practice,
to the effect that, as a result of the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), that there is more than an insubstantial risk that
the Trust is or will be considered an "investment company" that is required to
be registered under the 1940 Act, which Change in 1940 Act Law becomes effective
on or after the date of original issuance of the Preferred Securities of the
Trust.
8
"Junior Subordinated Payment" has the meaning specified in
Section 12.2.
"Liquidated Damages" has the meaning specified in the form of reverse
of Debenture set forth in Section 2.3.
"Maturity" when used with respect to the Debentures, means the date on
which the principal of the Debentures become due and payable as herein provided,
whether at the Stated Maturity or by declaration of acceleration, call or
redemption or otherwise.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Non Book-Entry Preferred Securities" has the meaning specified in
Section 3.15.
"Non-Stock Fundamental Change" means any Fundamental Change other than
a Common Stock Fundamental Change.
"Notice of Conversion" means the notice given by a holder of Preferred
Securities to the Conversion Agent directing the Conversion Agent to exchange
such Preferred Securities for Debentures and to convert such Debentures into
Common Stock on behalf of such holder.
"Notice of Default" has the meaning specified in Section 5.1(c).
"NYSE" means the New York Stock Exchange.
"Officers' Certificate" means a certificate signed by (i) the Chairman,
Chief Executive Officer, President or a Vice President, and by (ii) the
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, the Trust, or the Trustee, but who may be an employee
thereof, and who shall be reasonably acceptable to the Trustee.
9
"Outstanding" means, as of the date of determination, all Debentures
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Debentures for whose payment money in the necessary
amount has been theretofore irrevocably deposited with the Trustee or
any Paying Agent in trust for the Holders of such Debentures; and
(iii) Debentures in substitution for or in lieu of which other
Debentures have been authenticated and delivered or which have been
paid pursuant to Section 3.6, or which have been converted into Common
Stock pursuant to Section 13.1, unless proof satisfactory to the
Trustee is presented that any Debentures are held by Holders in whose
hands such Debentures are valid, binding and legal obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Debentures have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Debentures which the Trustee actually knows to be so
owned shall be so disregarded. Debentures so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Debentures and that the pledgee is not the Company or any other obligor upon the
Debentures or any Affiliate of the Company or such other obligor. Upon request
of the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Debentures, if any, known by the Company
to be owned or held by or for the account of the Company, or any other obligor
on the Debentures or any Affiliate of the Company or such obligor, and, subject
to the
10
provisions of Section 6.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Debentures not listed therein are Outstanding for the
purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of or interest on any Debentures on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.6 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"Preferred Securities" has the meaning specified in the first recital
of this Indenture.
"Proceeding" has the meaning specified in Section 12.2.
"Property Trustee" means, in respect of the Trust, the commercial bank
or trust company identified as the "Property Trustee" in the Trust Agreement,
solely in its capacity as Property Trustee of the Trust under the Trust
Agreement and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as therein provided.
"Purchase Agreement" means the Purchase Agreement dated November 25,
1996 by and among Host Marriott Financial Trust, Host Marriott Corporation and
the Purchasers.
"Purchased Shares" has the meaning specified in Section 13.4(e).
"Purchasers" with respect to the Preferred Securities, means Xxxxxxx,
Xxxxx & Co., Xxxxxxxxx, Lufkin &
11
Xxxxxxxx Securities Corporation, BT Securities Corporation and Xxxxxxxxxx
Securities.
"Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the record date for the determination of the holders
of Common Stock entitled to receive such common stock or if there is no such
record date, the date on which the holders of Common Stock shall have the right
to receive such common stock, as adjusted in good faith by the Company to
appropriately reflect any of the events referred to in Section 13.4.
"Redemption Date", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price" has the meaning specified in Section 11.3.
"Reference Date" has the meaning specified in Section 13.4(c).
"Reference Market Price" initially means $10.083 (which is an amount
equal to 66 2/3% of the reported last sale price for the Common Stock on the
NYSE Consolidated Transactions Tape on November 25, 1996), and in the event of
any adjustment of the Conversion Price other than as a result of a Non-Stock
Fundamental Change, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the Conversion Price after giving
effect to any such adjustment shall always be the same as the ratio of the
initial Reference Market Price to the initial Conversion Price of the
Debentures.
"Regular Record Date" means for the interest payable on any Interest
Payment Date the Business Day next preceding such Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters, or any other officer to whom such matters may be
referred.
12
"Restricted Preferred Securities" means all Preferred Securities
required to bear any restricted securities legend pursuant to the Trust
Agreement.
"Restricted Securities" means all the Debentures required pursuant to
Section 2.6 to bear a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning specified in Section
2.6.
"Rights" has the meaning specified in Section 13.2(g).
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Company, whether incurred on or prior to the date of this Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Debentures or to other
Debt which is pari passu with, or subordinated to, the Debentures, provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Company which when incurred and, without respect to any election under Section
1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the
Company, (b) any Debt of the Company to any of its Subsidiaries, (c) Debt to any
employee of the Company, (d) any liability for taxes, (e) Debt or other monetary
obligations to trade creditors created or assumed by the Company or any of its
Subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services and (f) the Debentures.
"Shareholders Rights Plan" means the Rights Agreement dated as of
February 3, 1989 by and between Marriott Corporation and the Bank of New York as
Rights Agent, as amended from time to time.
13
"Special Event" means a Tax Event or an Investment Company Event.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to the Debentures or any
installment of principal thereof or interest thereon means the date specified in
the Debentures as the fixed date on which the principal of the Debentures or
such installment of interest is due and payable.
"Subsidiary" means any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the outstanding shares of voting stock.
For purposes of this definition, "voting stock" means stock which has voting
power for the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.
"Tax Event" means the receipt by the Property Trustee on behalf of the
Trust of an Opinion of Counsel, rendered by a law firm having a recognized
national tax and securities practice, to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
issuance of the Preferred Securities of the Trust, 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 income
received or accrued on the Debentures, (ii) interest payable by the Company on
the Debentures is not, or within 90 days of the date thereof, will not be,
deductible, in whole or in part, for United States Federal income tax purposes
or (iii) the Trust is, or will be within 90 days of the date
14
thereof, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Transaction" has the meaning specified in Section 13.5(a).
"Trust" has the meaning specified in the first recital of this
Indenture.
"Trust Agreement" means the Trust Agreement substantially in the form
attached hereto as Annex A, as amended by the form of Amended and Restated Trust
Agreement substantially in the form attached hereto as Annex B, as amended from
time to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder if
at any time there is more than one such Person.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S.C.(S)(S) 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture.
"Trust Securities" means the Common Securities and Preferred
Securities.
"Vice President" when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
SECTION 1.2. Compliance Certificate and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent (including covenants,
compliance with which constitutes a condition precedent), if any, provided for
in this Indenture relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent (including covenants compliance with which constitute a
condition precedent), if any, have been complied with,
15
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.5) shall include:
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Forms of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representa-
16
tions by, counsel, unless such officer knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to matters upon which his certificate or opinion is based are erroneous.
Any such certificate or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given to or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
is or are delivered to the Trustee, and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1) conclusive in favor of
the Trustee and the Company and any agent of the Trustee or the Company, if made
in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing
17
acknowledged to him the execution thereof. Where such execution is by a Person
acting in other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority.
(c) The fact and date of the execution by any Person of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Debentures shall be proved by the
Securities Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Debenture shall bind every
future Holder of the same Debenture and the Holder of every Debenture issued
upon the transfer thereof or in exchange therefor or in lieu thereof in respect
of anything done or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Debenture.
(f) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to take any
action under this Indenture by vote or consent. Except as otherwise provided
herein, such record date shall be the later of 30 days prior to the first
solicitation of such consent or vote or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 7.1 prior to such
solicitation. If a record date is fixed, those persons who were Holders at such
record date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any vote or consent
previously given, whether or not such persons continue to be Holders after such
record date.
(g) Without limiting the foregoing, a Holder entitled
hereunder to give or take any such action with regard to any particular
Debenture may do so with regard to all or any part of the principal amount of
such Debenture or by one or more duly appointed agents each of
18
which may do so pursuant to such appointment with regard to all or any different
part of such principal amount.
SECTION 1.5. Notices, Etc. to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose (except as otherwise provided in Section
5.1 hereof) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 1.6. Notice to Holders; Waiver. Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed, first
class postage prepaid, to each Holder affected by such event, at the address of
such Holder as it appears in the Securities Register on the date such notice is
mailed, which shall be not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition xxxxx-
xxxx to the validity of any action taken in reliance upon such waiver.
19
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.7. Conflict with Trust Indenture Act. If any provision of
this Indenture limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the former provision shall be deemed to apply.
SECTION 1.8. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.9. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this
Indenture or in the Debentures shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties thereto, any Paying Agent and their successors and assigns and the
Holders of the Debentures, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 1.12. Governing Law. This Indenture and the Debentures shall
be governed by and construed in accordance with the laws of the State of New
York without regard to its principles of conflicts of laws.
SECTION 1.13. Non-Business Days. In any case where any Interest
Payment Date, Redemption Date, or Stated
20
Maturity of any Debenture shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or the Debentures) payment of interest or
principal payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date or Redemption
Date or Stated Maturity.
ARTICLE 2
DEBENTURE FORM
SECTION 2.1. Forms Generally. The Debentures and the Trustee's
certificate of authentication shall be in substantially the forms sets forth in
this Article and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with applicable tax laws or the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Debentures,
as evidenced by their execution of the Debentures.
The definitive Debentures shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods, if required by any
securities exchange on which the Debentures may be listed, on a steel engraved
border or steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Debentures may be
listed, all as determined by the officers executing such Debentures, as
evidenced by their execution of such Debentures.
SECTION 2.2. Form of Face of Debenture.
6 3/4% Convertible Subordinated Debenture due December 2, 2026
No. 1 $
21
Host Marriott Corporation, a corporation organized and existing under
the laws of Delaware (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to__________________________________, or
registered assigns, the principal sum of _______________________________________
on December 2, 2026 and to pay interest on said principal sum from December 2,
1996 or from the most recent interest payment date (each such date, an "Interest
Payment Date") on which interest has been paid or duly provided for, quarterly
plus Additional Interest, if any until the principal hereof is paid or duly
provided for or made available for payment subject to deferral as set forth
herein in arrears on March 1, June 1, September 1 and December 1 of each year,
commencing March 1, 1997 at the rate of 6 3/4% per annum, until the principal
hereof shall have become due and payable.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Debenture shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
By:
------------------------------
SECTION 2.3. Form of Reverse of Debenture. This Debenture is one of a
duly authorized issue of Debentures of the Company (herein called the
"Debentures") limited to the aggregate principal amount of $567,050,000, issued
and to be issued under an Indenture, dated as of December 2, 1996 (herein called
the "Indenture"), between the Company and IBJ Xxxxxxxx Bank & Trust Company, as
Trustee (herein called the "Trustee", which term includes any
22
successor trustee under the Indenture), to which the Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Trustee, the Company and the Holders of the Debentures, and of the terms
upon which the Debentures are, and are to be, authenticated and delivered. All
terms used in this Debenture that are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30 day months. For periods less than a full
month, interest shall be computed on the actual number of elapsed days over 360
days. In the event that any date on which interest is payable on this Debenture
is not a Business Day, then a payment of the interest on such date will be made
on the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay) with the same force and effect as if
made on the date the payment was originally payable. A "Business Day" shall mean
any day other than a Saturday or a Sunday or a day on which banking institutions
in the City of New York are authorized or required by law or executive order to
remain closed or a day on which the Corporate Trust Office of the Trustee, or
the principal office of the Property Trustee under the Trust Agreement is closed
for business. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Debenture (or one or more Predecessor
Debentures, as defined in the Indenture) is registered at the close of business
on the Regular Record Date, for such interest installment which shall be the
date which is the Business Day next preceding such Interest Payment Date. Any
such interest installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Debenture (or one or more
Predecessor Debentures) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Debentures not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the
23
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture.
The Company shall have the right at any time during the term of this
Debenture, from time to time, to extend the interest payment period of such
Debenture for up to 20 consecutive quarters with respect to each deferral period
(each such deferral period an "Extension Period"), during which periods the
Company shall have the right not to make payments of interest on any Interest
Payment Date, and at the end of which the Company shall pay all interest then
accrued and unpaid (together with Additional Interest and Liquidated Damages, if
any, thereon to the extent permitted by applicable law); provided that during
any such Extension Period, the Company will not, and will not permit any
Subsidiary to (a) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any shares of
the Company's capital stock or (b) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness for money borrowed) of the Company that
rank pari passu with or junior to the Debentures (other than (i) any dividend,
redemption, liquidation, interest, principal or guarantee payment by the Company
where the payment is made by way of securities (including capital stock) that
rank pari passu with or junior to the securities on which such dividend,
redemption, interest, principal or guarantee payment is being made, (ii)
redemptions or purchases of any rights pursuant to the Company's Shareholders
Rights Plan, or any successor to such Shareholders Rights Plan, and the
declaration of a dividend of such rights or the issuance of preferred stock
under such plans in the future, (iii) payments under the Guarantee, (iv)
purchases of Common Stock related to the issuance of Common Stock under any of
the Company's benefit plans for its directors, officers or employees, (v) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one series or class of the Company's capital stock for another
series or class of the Company's capital stock and (vi) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged). Prior to
24
the termination of any such Extension Period, the Company may further extend the
interest payment period, provided that no Extension Period shall exceed 20
consecutive quarters or extend beyond the Stated Maturity of this Debenture.
Upon the termination of any such Extension Period and upon the payment of all
accrued and unpaid interest and any Additional Interest then due, the Company
may elect to begin a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period except at the end
thereof. The Company shall give the Trustee, the Property Trustee and the
Administrative Trustees notice of its selection of an Extension Period at least
one Business Day prior to the earlier of (i) the record date for the date the
distributions on the Preferred Securities (or if no Preferred Securities are
outstanding, for the date interest on the Debentures) would have been payable
except for the election to begin such Extension Period or (ii) the date the
Property Trustee of the Host Marriott Financial Trust is (or if no Preferred
Securities are outstanding, the Debenture Trustee is) required to give notice to
NYSE or other applicable self-regulatory organizations or to holders of such
Preferred Securities (or, if no Preferred Securities are outstanding, to the
holders of such Debentures) of the record date.
Payment of the principal of (and premium, if any) and interest on this
Debenture will be made [Insert, if a global security is issued - to the
Depositary Trust Company or its nominee] [Insert if securities in definitive
form are issued - at the office or agency of the Paying Agent maintained for
that purpose in the United States], in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts provided, however, that at the option of the Company
payment of interest may be made (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Securities Register or (ii)
by wire transfer in immediately available funds at such place and to such
account as may be designated by the Person entitled thereto as specified in the
Securities Register.
The indebtedness evidenced by this Debenture is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt (as defined in the Indenture), and
25
this Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such actions as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof, waives
all notice of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Debt, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
At any time on or after December 2, 1999, the Company may, at its
option, subject to the terms and conditions of Article 11 of the Indenture,
redeem this Debenture in whole at any time or in part from time to time, at the
Redemption Prices set forth in Section 11.8 of the Indenture.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If a Special Event shall occur and be continuing, this Debenture shall
be exchangeable for Preferred Securities in accordance with Section 11.9 of the
Indenture or, in certain circumstances, redeemable by the Company in accordance
with Section 11.8 of the Indenture.
Subject to the terms and conditions set forth in Article 13 of the
Indenture, this Debenture is convertible, at the option of the Holder, hereof
into shares of Common Stock.
If an Event of Default shall occur and be continuing, the principal of
the Debentures may be declared due and payable in the manner, with the effect
and subject to the conditions provided in the Indenture.
The Indenture contains provisions for satisfaction, discharge and
defeasance of the entire indebtedness of this Debenture upon compliance by the
Company with certain conditions set forth in the Indenture.
26
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in principal amount of the Debentures. The Indenture also
contains provisions permitting Holders of specified percentages in principal
amount of the Debentures at the time Outstanding, on behalf of the Holders of
all Debentures, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver shall be conclusive and binding upon
the Holder of this Debenture and upon all future Holders of this Debenture and
of any Debenture issued upon the registration of transfer hereof or in exchange
therefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Debenture.
As provided in and subject to the provisions of the Indenture, if an
Event of Default occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided that, if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures fail to declare the principal of all the Debentures to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such principal amount (or specified amount) of and the accrued
interest (including any Additional Interest) on all the Debentures shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Debentures shall remain subordinated
to the extent provided in Article 12 of the Indenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium,
27
if any) and interest on this Debenture at the times, place and rate, and in the
coin or currency, herein prescribed.
The holders of the Preferred Securities, the Debentures, the Guarantee
and the shares of Common Stock of the Company issuable upon conversion of the
Securities (collectively, the "Registrable Securities") are entitled to the
benefits of a Registration Rights Agreement, dated as of December 2, 1996, among
Host Marriott Financial Trust, the Company and the 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 120 days after the date of issuance of the Registrable
Securities, file a shelf registration statement (the "Shelf Registration
Statement") with the Commission with respect to the resales of the Registrable
Securities, (ii) it will use its best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission within 180 days after the
date of issuance of the Registrable Securities and (iii) the Depositor (as
defined in the Trust Agreement) will use its best efforts to maintain such Shelf
Registration Statement continuously effective under the Securities Act until the
third anniversary of the date of issuance of the Registrable Securities or such
earlier date as is provided in the Registration Rights Agreement (the
"Effectiveness Period".) The Company will be permitted to suspend the use of the
prospectus (which is a part of the Shelf Registration Statement) in connection
with sales of Registrable Securities by holders during certain periods of time
under certain circumstances relating to pending corporate developments relating
to the Company and public filings with the Commission and similar events.
If (i) on or prior to 120 days following the date of original issuance
of the Registrable Securities, a Shelf Registration Statement has not been filed
with the Commission, or (ii) on or prior to the 180th day following the issuing
of the Registrable Securities, such Shelf Registration Statement is not declared
effective (each such event a "Registration Default"), additional interest
("Liquidated Damages") will accrue on the Debentures and, accordingly,
additional distributions will accrue on the Preferred Securities, from and
including the day following such Registration Default until such time as such
28
Shelf Registration Statement is filed or such Shelf Registration Statement is
declared effective, as the case may be. Liquidated Damages will be paid
quarterly in arrears (subject to the Company's ability to defer payment of
Liquidated Damages during any Extension Period), with the first quarterly
payment due on the first Interest Payment Date following the date on which such
Liquidated Damages begin to accrue, and will accrue at a rate per annum equal to
an additional 0.25% of the principal amount, to and including the 90th day
following such Registration Default and 0.50% thereof from and after the 91st
day following such Registration Default. In the event that during the
Effectiveness Period the Shelf Registration Statement ceases to be effective, or
the Company suspends the use of the prospectus which is a part thereof, for more
than 90 days, whether or not consecutive, during any 12-month period then the
interest rate borne by the Debentures and the distribution rate borne by the
Preferred Securities will each increase by an additional 0.50% per annum from
the 91st day of the applicable 12-month period such Shelf Registration Statement
ceases to be effective or the Company suspends the use of the prospectus which
is a part thereof, as the case may be, until the earlier of such time as (i) the
Shelf Registration Statement again becomes effective, (ii) the use of the
related prospectuses ceases to be suspended or (iii) the Effectiveness Period
expires.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Securities
Register, upon surrender of this Debenture for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
29
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Debentures are issuable only in registered form without coupons in
denominations of $50 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States Federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES THEREOF.
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
(I) or (we) assign and transfer this Security to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
30
and irrevocably appoint ______________________________________agent to transfer
this Debenture on the books of the Company. The agent may substitute another to
act for him.
Your Signature:
--------------------------------------------------------
(Sign exactly as your name appears on the other
side of this Security)
Date:
----------------------------------
Signature Guarantee:*
------------------------------------------------
[Include the following if the Debenture bears a Restricted Securities Legend --
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Debentures are being:
CHECK ONE BOX BELOW
(1) [_] exchanged for the undersigned's own account without
transfer; or
(2) [_] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) [_] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
------------------------
* Signature must be guaranteed by an institution which is a member of one
of the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) The New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) in such other guarantee programs
acceptable to the Trustee.
31
(4) [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(5) [_] transferred pursuant to an effective Registration Statement
under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Debentures evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3) or (4) is
-------- -------
checked, the Trustee may require, prior to registering any such transfer of the
Securities such legal opinions, certifications and other information as the
Company has reasonably requested in writing and directed the Trustee to require
confirmation that such transfer is being made pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act;
provided, further, that after the date that a shelf Registration Statement under
-------- -------
the Securities Act of 1933 has been filed and so long as such shelf Registration
Statement continues to be effective, the Trustee may only permit transfers for
which box (5) has been checked.
---------------------------------------
Signature
Signature Guarantee:*
-------------------------- ---------------------------------------]
Signature must be guaranteed Signature
--------------------------------------------------------------------------------
---------------------
* Signature must be guaranteed by an institution which is a member of one of
the following recognized Signature Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP);
or (iv) in such other guarantee programs acceptable to the Trustee.
32
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Debenture 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]
33
NOTICE OF CONVERSION
To: Host Marriott Corporation
The undersigned owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion below designated,
into Common Stock of HOST MARRIOTT CORPORATION in accordance with the terms of
the Indenture referred to in this Debenture, and directs that the shares
issuable and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Any Holder, upon the exercise of its conversion rights in
accordance with the terms of the Indenture and the Debenture, agrees to be bound
by the terms of the Registration Rights Agreement relating to the Common Stock
issuable upon conversion of the Debenture.
Date: ,
------------ ----
in whole
--
Portions of Debenture to be
in part converted ($50 or integral
-- multiples thereof):
$
----------------
------------------------------------
Signature (for conversion only)
Please Print or Typewrite
Name and Address, Including
Zip Code, and Social Secu-
rity or Other Identifying
Number
------------------------------------
------------------------------------
------------------------------------
Signature Guarantee:*
--------------------------------
-------------------------
* Signature must be guaranteed by an institution which is a member of one of
the following recognized
(continued...)
34
SECTION 2.4. Additional Provisions Required in Global Debenture. Any
Global Debenture issued hereunder shall, in addition to the provisions contained
in Sections 2.2 and 2.3 bear a legend in substantially the following form :
"This Debenture is a Global Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Indenture and may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary."
SECTION 2.5. Form of Trustee's Certificate of Authentication. The form
of Trustee's Certificate of Authentication shall be as follows:**
"This is one of the Debentures designated therein referred to in the within
mentioned Indenture.
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee
By:
Authorized Signatory
Dated: "
--------------------
*(...continued)
Signature Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MSP);
(iii) The Stock Exchange Medallion Program (SEMP);
or (iv) in such other guarantee programs acceptable
to the Trustee.
** Or in the form provided in Section 6.14 in the event that a separate
Authenticating Agent is appointed pursuant thereto.
35
SECTION 2.6. Initial Issuance to Property Trustee. The Debentures
initially issued to the Property Trustee of the Trust shall be in the form of
one or more individual certificates in definitive, fully registered form without
distribution coupons and shall bear the following legend (the "Restricted
Securities Legend") unless the Company determines otherwise in accordance with
applicable law:
"THE SECURITIES EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON
THEIR CONVERSION HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933
(THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A) BY ANY INITIAL INVESTOR THAT IS NOT A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT,
(1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING WITH RULE 144A, (2) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT OR (B) BY ANY INITIAL INVESTOR THAT IS A
QUALIFIED INSTITUTIONAL BUYER OR BY ANY SUBSEQUENT INVESTOR, AS SET FORTH IN
CLAUSE (A) ABOVE OR TO AN INSTITUTION THAT IS AN ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) IN A TRANSACTION EXEMPT FORM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE (A) AND (B),
IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND OTHER JURISDICTIONS. SECURITIES OWNED BY AN INITIAL INVESTOR THAT IS
NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN BOOK-ENTRY FORM AND MAY
NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE REFERRED TO BELOW."
ARTICLE 3
THE DEBENTURES
SECTION 3.1. Amount of Debentures. The aggregate principal amount of
Debentures which may be authenticated and delivered under this Indenture is
$567,050,000 except for Debentures authenticated and delivered upon registration
of, transfer of, or in exchange for, or in lieu of, other Debentures pursuant to
Sections 3.4, 3.5 or 3.6.
36
SECTION 3.2. Denominations. The Debentures shall be in registered form
without coupons and shall be issuable in denominations of $50 and any integral
multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating. The
Debentures shall be executed on behalf of the Company by its President or one of
its Vice Presidents under its corporate seal reproduced or impressed thereon and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures. Upon the execution and
delivery of this Indenture, or from time to time thereafter, Debentures may be
executed by the Company and delivered to the Trustee for authentication, and the
Trustee shall thereupon authenticate and deliver said Securities to or upon
Company Order without any further action by the Company. Debentures may be
authenticated on original issuance from time to time and delivered pursuant to
such procedures acceptable to the Trustee ("Procedures") as may be specified
from time to time by Company Order. Procedures may authorize authentication and
delivery pursuant to oral instructions of the Company or a duly authorized
agent, which instructions shall be promptly confirmed in writing.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Debenture shall be conclusive evidence,
and the only evidence, that such Debenture has been duly authenticated and
delivered hereunder.
SECTION 3.4. Temporary Debentures. Pending the preparation of
definitive Debentures, the Company may execute, and upon Company Order the
Trustee shall authen-
37
ticate and deliver, temporary Debentures which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Debentures in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Debentures may determine, as
evidenced by their execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at the office
or agency of the Company designated for the purpose without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Debentures,
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Debentures of authorized
denominations. Until so exchanged, the temporary Debentures shall in all
respects be entitled to the same benefits under this Indenture as definitive
Debentures.
SECTION 3.5. Registration, Transfer and Exchange. The Company shall
cause to be kept at the Corporate Trust Office of the Trustee a register in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of Debentures.
Such register is herein sometimes referred to as the "Securities Register." The
Trustee is hereby appointed "Securities Registrar" for the purpose of
registering Debentures and transfers of Debentures as herein provided.
Upon surrender for registration of transfer of any Debenture at the
office or agency of the Company designated for that purpose the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Debentures of any
authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the
38
Trustee shall authenticate and deliver, the Debentures which the Holder making
the exchange is entitled to receive.
All Debentures issued upon any transfer or exchange of Debentures shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Debentures surrendered upon
such transfer or exchange.
Every Debenture presented or surrendered for transfer or exchange shall
(if so required by the Company or the Securities Registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Debentures.
Notwithstanding any of the foregoing, the Global Debenture shall be
exchangeable pursuant to this Section 3.5 for Debentures registered in the names
of Persons other than the Depositary for such Debenture or its nominee only if
(a) such Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Debenture and the Company shall not have
appointed a successor depositary within 90 days after such notice, or if at any
time such Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (b) the Company executes and
delivers to the Trustee a Company Order that the Global Debenture shall be so
exchangeable or (c) there shall have occurred and be continuing an Event of
Default. The Global Debenture shall be exchangeable for Debentures registered in
such names as such Depositary shall direct.
Notwithstanding any other provisions in this Indenture, the Global
Debenture may not be transferred except as a whole by the Depositary with
respect to the Global Debenture to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary.
39
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Debenture
during a period beginning at the opening of business 15 days before the day of
selection for redemption of Debentures pursuant to Article 11 and ending at the
close of business on the day of mailing of notice of redemption or (b) to
transfer or exchange any Debenture so selected for redemption in whole or in
part, except, in the case of any Debenture to be redeemed in part, any portion
thereof not to be redeemed.
The Debentures may not be transferred except in compliance with the
Restricted Securities Legend unless otherwise determined by the Company in
accordance with applicable law. Upon any distribution of the Debentures to the
holders of the Preferred Securities in accordance with the Trust Agreement, the
Company and the Trustee shall enter into a supplemental indenture pursuant to
Section 9.1(h) to provide for transfer procedures and restrictions with respect
to the Debentures substantially similar to those contained in the Trust
Agreement to the extent applicable in the circumstances existing at the time of
such distribution.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Debentures. If any
mutilated Debenture is surrendered to the Trustee together with such security or
indemnity as may be required by the Company or the Trustee to save each of them
harmless, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Debenture and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture, and (b) such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of actual notice to the Company or
the Trustee that such Debenture has been acquired by a bona fide purchaser, the
Company shall execute and upon a Company Order its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Debenture, a new Debenture bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
40
Upon the issuance of any new Debenture under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 3.7. Payment of Interest; Interest Rights Preserved. Interest
on any Debenture which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date, shall be paid to the Person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on the Regular Record Date, except that interest payable on the Stated
Maturity of the Debentures shall be paid to the Person to whom principal is
paid.
Any interest on the Debentures which is payable, but is not timely paid
or duly provided for, on an Interest Payment Date (herein called "Defaulted
Interest"), shall forthwith cease to be payable to the registered Holder on the
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessors Debentures) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on the Debentures and the date of the proposed
payment, and at the same time
41
the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first class, postage
prepaid, to each Holder of the Debentures at the address of such Holder
as it appears in the Securities Register not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed and, upon
such notice as may be required by such exchange (or by the Trustee if
the Debentures are not listed), if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this Clause, such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Debenture shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Debenture.
42
SECTION 3.8. Persons Deemed Owners. The Company, the Trustee, the
Paying Agent and any agent of the Company or the Trustee or the Paying Agent may
treat the Person in whose name any Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of principal of and (subject to
Section 3.7) interest on such Debenture and for all other purposes whatsoever,
whether or not such Debenture be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 3.9. Cancellation. All Debentures surrendered for payment,
redemption, conversion transfer or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee, and any such Debentures and
Debentures surrendered directly to the Trustee for any such purpose shall be
promptly canceled by it. The Company may at any time deliver or cause to be
delivered to the Trustee for cancellation any Debentures previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Debentures so delivered shall be promptly canceled by
the Trustee. No Debentures shall be authenticated in lieu of or in exchange for
any Debentures canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Debentures shall be destroyed by the
Trustee and upon request, the Trustee shall deliver to the Company a certificate
of such destruction.
SECTION 3.10. Computation of Interest. Interest on the Debentures shall
be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. Deferrals of Interest Payment Dates. The Company shall
have the right, at any time during the term of the Debentures, so long as no
Event of Default has occurred and is continuing, from time to time to extend the
interest payment period for the Debentures for up to 20 consecutive quarters
with respect to each deferral period (each, an "Extension Period") during which
periods the Company shall have the right to not make payments of interest
(including any Liquidated Damages) on any Interest Payment Date, and at the end
of such Extension Period the Company shall pay all interest then accrued and
unpaid thereon (together with Additional Interest thereon, if any, at the rate
specified for the Debentures to the extent permitted by applicable law),
provided, however, that during any such Extension Period,
43
the Company shall not, and shall cause any Subsidiary not to, (a) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any shares of the Company's capital stock
or (b) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees of indebtedness
for money borrowed) of the Company that rank pari passu with or junior to the
Debentures (other than (i) any dividend, redemption, liquidation, interest,
principal or guarantee payment by the Company where the payment is made by way
of securities (including capital stock) that rank pari passu with or junior to
the securities on which such dividend, redemption, interest, principal or
guarantee payment is being made, (ii) redemptions or purchases of any rights
pursuant to the Company's Shareholders Rights Plan, or any successor to such
Shareholders Rights Plan, and the declaration of a dividend of such rights or
the issuance of preferred stock under such plans in the future, (iii) payments
under the Guarantee, (iv) purchases of Common Stock related to the issuance of
Common Stock under any of the Company's benefit plans for its directors,
officers or employees, (v) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one series or class of the
Company's capital stock for another series or class of the Company's capital
stock and (vi) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged). Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period, provided that no such Extension Period shall exceed 20 consecutive
quarters or extend beyond the Stated Maturity of the Debentures. Upon
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, the Company may select a
new Extension Period, subject to the above requirements. No interest including
Additional Interest and Liquidated Damages, if any, shall be due and payable
during an Extension Period, except at the end thereof. The Company shall give
the Trustee, the Property Trustee and the Administrative Trustees notice of its
selection of such Extension Period at least one Business Day prior to the
earlier of (i) the record date for the date the distributions on the Preferred
Securities of the Trust (or if no, Preferred Securities are outstanding, for the
date interest on the Debentures) would have been payable except for the election
to begin such Extension Period and (ii) the date the Property Trustee (or, if no
44
Preferred Securities are outstanding, the Trustee) is required to give notice to
NYSE or other applicable self-regulatory organization or to holders of such
Preferred Securities (or, if no Preferred Securities are outstanding, to the
holders of such Debentures) of such record date, but in any event not less than
one Business Day prior to such record date. Such notice shall specify the period
selected.
The Trustee shall promptly give notice of the Company's selection of
such Extension Period to the Holders of the outstanding Debentures.
SECTION 3.12. Right of Set-off. Notwithstanding anything to the
contrary in the Indenture, the Company shall have the right to set-off any
payment it is otherwise required to make thereunder in respect of the Debenture
to the extent the Company has theretofore made, or is concurrently on the date
of such payment making, a payment relating to the Debentures under the
Guarantee.
SECTION 3.13. Agreed Tax Treatment. Each Debenture issued hereunder
shall provide that the Company and, by its acceptance of a Debenture or a
beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Debenture agree that for United States Federal,
state and local tax purposes it is intended that such Debenture constitute
indebtedness.
SECTION 3.14. CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use such "CUSIP" number in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such number either as printed on the Debentures or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debentures, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 3.15. Global Security. (a) In connection with distribution of
Debentures to holders of the Preferred Securities in connection with the
involuntary or voluntary dissolution, winding up or liquidation of the Trust,
(i) the Debentures in certificated form may be
presented to the Trustee by the Property Trustee
45
in exchange for a global certificate in an aggregate principal amount equal to
the aggregate principal amount of all outstanding Debentures (a "Global
Debenture"), to be registered in the name of the Depositary, or its nominee, and
delivered by the Trustee to the Depositary, or its custodian, for crediting to
the accounts of its participants pursuant to the procedures of the Depositary.
The Company upon any such presentation shall execute a Global Debenture in such
aggregate principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with this Indenture; and
(ii) if any Preferred Securities are held
in non book-entry certificated form, the Debentures in certificated form may be
presented to the Trustee by the Property Trustee and any Preferred Security
certificate which represents Preferred Securities other than Preferred
Securities held by the Depositary or its nominee ("Non Book-Entry Preferred
Securities") will be deemed to represent beneficial interests in Debentures
presented to the Trustee by the Property Trustee having an aggregate principal
amount equal to the aggregate liquidation amount of the Non Book-Entry Preferred
Securities until such Preferred Security certificates are presented to the
Securities Registrar for transfer or reissuance at which time such Non-Book
Entry Preferred Security certificates will be cancelled and a Debenture,
registered in the name of the holder of the Preferred Security certificate or
the transferee of the holder of such Preferred Security certificate, as the case
may be, with an aggregate principal amount equal to the aggregate liquidation
amount of the Preferred Security certificate cancelled, will be executed by the
Company and delivered to the Trustee for authentication and delivery in
accordance with this Indenture. On issue of such Debentures, Debentures with an
equivalent aggregate principal amount that were presented by the Property
Trustee to the Trustee will be deemed to have been cancelled.
(b) A Global Debenture may be transferred, in whole but not in
part, only to another nominee of the Depositary, or to a nominee of such
successor Depositary.
(c) If (i) the Depositary notifies the Company that it is
unwilling or unable to continue as a depositary for such Global Debenture and
no successor depositary shall have been appointed within 90 days by the
Company, (ii) the Depositary, at any time, ceases to be a clearing agency
registered under the Exchange Act at which time the Depositary is required to be
so registered
46
to act as such depositary and no successor depositary shall have been appointed
within 90 days by the Company, (iii) the Company, in its sole discretion,
determines that such Global Debenture shall be so exchangeable or (iv) there
shall have occurred an Event of Default with respect to such Debentures, as the
case may be, the Company will execute, and, subject to Article 3 of this
Indenture, the Trustee, upon written notice from the Company and receipt of a
Company Order, will authenticate and deliver the Debentures in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. In addition, upon an Event of Default or
if the Company may at any time determine that the Debenture shall no longer be
represented by a Global Debenture, in such event the Company will execute, and
subject to Section 3.5 of this Indenture, the Trustee, upon receipt of an
Officers' Certificate evidencing such determination by the Company and a Company
Order, will authenticate and make available for delivery the Debentures in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Debenture in exchange for such Global Debenture. Upon the exchange of the Global
Debenture for such Debentures in definitive registered form without coupons, in
authorized denominations, the Global Debenture shall be cancelled by the
Trustee. Such Debentures in definitive registered form issued in exchange for
the Global Debenture shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debentures to the Depositary for delivery to the Persons in
whose names such Debentures are so registered.
ARTICLE 4
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to (i) any surviving rights of
transfer, substitution and exchange of Debentures, (ii) rights hereunder of
Holders to receive payments of principal of (and premium, if any) and interest
(including Additional Interest, if any) on the Debentures and other rights,
duties and obligations of the Holders as beneficiaries
47
hereof with respect to the amounts, if any, so deposited with the Trustee and
(iii) the rights and obligations of the Trustee hereunder), and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(a) either
(i) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.6 and
(ii) Debentures for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(ii) all such Debentures not theretofore delivered to the
Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year of the date of deposit or are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption to the Trustee in the name, and at the expense, of
the Company, and the Company has deposited or caused to be
deposited with the Trustee as trust funds in trust for such
purpose an amount in the currency or currencies in which the
Debentures are payable sufficient (without regard to
investment of such amount deposited) to pay and discharge the
entire indebtedness on the Debentures not theretofore
delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest (including any Additional
Interest) to the date of such deposit or to the Stated
Maturity; or
(C) have been redeemed or tendered for conversion;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
48
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money. Subject to the provisions of
the last paragraph of Section 10.3, all money deposited with the Trustee
pursuant to Section 4.1 shall be held in trust and applied by it, in accordance
with the provisions of the Debentures and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose payment such money or
obligations have been deposited with or received by the Trustee; provided,
however, such moneys need not be segregated from other funds except to the
extent required by law.
ARTICLE 5
REMEDIES
SECTION 5.1. Events of Default. "Event of Default", wherever used
herein with respect to the Debentures, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest upon the Debenture,
including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30
days (subject to the deferral of any due date in the case of an
Extension Period); or
49
(b) default in the payment of the principal of (or premium, if
any, on) the Debentures when due whether at Stated Maturity, upon
redemption by declaration or otherwise; or
(c) failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Company contained in the Debentures or
contained in this Indenture (other than a covenant or agreement which
has been expressly included in this Indenture solely for the benefit of
the Company) and continuance for such failure for a period of 90 days
after the date on which written notice of such failure, requiring the
same to be remedied and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Company by the
Trustee, by registered or certified mail, or to the Company and the
Trustee by a Holder or Holders of at least 25% in aggregate principal
amount of the Debentures at the time Outstanding or the holder or
holders of at least 25% in aggregate liquidation preference of the
Preferred Securities;
(d) failure by the Company to issue the Common Stock upon an
appropriate election by the Holder or Holders of the Debentures to
convert the Debentures into shares of Common Stock;
(e) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of the Company under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or of any substantial part of
its property or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days; or
(f) the institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Xxxxx-
50
al or State bankruptcy, insolvency, reorganization or other similar
law, or the consent by it to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, seques-
trator (or other similar official) of the Company or of any substantial
part of its property or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due and its
willingness to be adjudicated as bankrupt, or the taking of corporate
action by the Company in furtherance of any such action.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures may declare the principal amount of all the Debentures to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), provided that, if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures fail to declare the principal of all the Debentures to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee, and upon any such
declaration such principal amount (or specified amount) of and the accrued
interest (including any Additional Interest) on all the Debentures shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on the Debentures shall remain subordinated
to the extent provided in Article 12.
At any time after such a declaration of acceleration with respect to
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Outstanding
Debentures, by written notice to the Company and the Trustee may rescind and
annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay
51
(A) all overdue installments of interest (including
any Additional Interest) on the Debentures;
(B) the principal of (and premium, if any, on) the
Debentures which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Debentures;
(C) to the extent that payment of such interest is
lawful, interest (including any Additional Interest) upon
overdue installments of interest at the rate borne by the
Debentures;
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(ii) all Events of Default with respect to Debentures, other than the
non-payment of the principal of the Debentures which has become due solely by
such acceleration, have been cured or waived as provided in Section 5.13. If the
holders of a majority in principal amount of the Outstanding Debentures fail to
rescind and annul such declaration and its consequences, the holders of a
majority in liquidation amount of the Preferred Securities then outstanding
shall have such right.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(a) default is made in the payment of any installment of interest
(including any Additional Interest) on the Debentures when such interest becomes
due and payable and such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of (and premium, if
any, on) the Debentures whether at the Stated Maturity thereof upon redemption
by declaration or otherwise, the Company will, upon demand of the Trustee, pay
to it, for the benefit of the Holders of the Debentures, the whole amount then
due and payable on the Debentures for principal (and premium, if any) and
interest (including any Additional Interest), including, to the extent that
payment of such interest shall be lawful,
52
interest on any overdue principal (and premium, if any) and on any overdue
installments of interest (including any Additional Interest) at the rate borne
by the Debentures, and, in addition thereto, all amounts owing the Trustee under
Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgement or final decree, and may enforce the same
against the Company or any other obligor upon the Debentures and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Debentures, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of the Debentures by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Debentures or the property of the
Company or of such other obligor or their creditors:
(a) the Trustee (irrespective of whether the principal of the
Debentures shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal (and premium, if any) or
interest (including any Additional Interest)) shall be entitled and empowered,
by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest (including any Additional Interest)
owing and unpaid in respect to the Debentures and to file such other
papers or documents as may be necessary or
53
advisable and to take any and all actions as are authorized under the
Trust Indenture Act in order to have the claims of the Holders and any
predecessor to the Trustee under Section 6.7 and, of the Holders
allowed in any such judicial proceedings; and
(ii) in particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same in accordance with Section 5.6;
and
(b) any custodian, receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee for
distribution in accordance with Section 5.6, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it and any predecessor Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debentures
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. Trustee May Enforce Claim Without Possession of
Debentures. All rights of action and claims under this Indenture or the
Debentures may be prosecuted and enforced by the Trustee without the possession
of any of the Debentures or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgement
shall, after provision for the payment of all the amounts owing the Trustee and
any predecessor Trustee under Section 6.7, its agents and counsel, be for the
ratable benefit of the Holders of the Debentures in respect of which such
judgement has been recovered.
54
SECTION 5.6. Application of Money Collected. Any money or property
collected or to be applied by the Trustee with respect to the Debentures
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money or
property on account of principal (or premium, if any) or interest (including any
Additional Interest), upon presentation of the Debentures and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7,
SECOND: To the payment of the amounts then due and unpaid upon the
Debentures for principal (and premium, if any) and interest (including any
Additional Interest), in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Debentures for principal (and
premium, if any) and interest (including any Additional Interest), respectively;
and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. Limitation on Suits. No Holder of the Debentures,
including a holder of Preferred Securities acting to enforce the rights of the
Property Trustee as a Holder of the Debentures pursuant to Section 6.8 of the
Trust Agreement, shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture or for the appointment of a receiver,
assignee, trustee, liquidator, sequestrator (or other similar official) or for
any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(b) if the Trust is not the sole holder of the Outstanding
Debentures, the Holders of not less than 25% in principal amount of the
Outstanding Debentures shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs,
55
expenses and liabilities to be incurred in compliance with such
request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Debentures;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of the Debentures, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision in this Indenture, the
Holder of any Debenture shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium, if any) and (subject to
Section 3.7) interest (including any Additional Interest) on such Debenture on
the Maturity or to convert such Debenture in accordance with Article 13 and to
institute suit for the enforcement of any such payment and right to convert, and
such right shall not be impaired without the consent of such Holder. For so long
as any Preferred Securities remain Outstanding, to the fullest extent permitted
by law and subject to the terms of this Indenture and the Trust Agreement, upon
an Event by Default specified in Sections 5.1(a) or 5.1(b), any holder of
Preferred Securities shall have the right to institute a proceeding directly
against the Company, for enforcement of payment to such holder of the principal
amount of or interest on Debentures having a principal amount equal to the
liquidation preference of the Preferred Securities of such holder (a "Direct
Action"). Notwithstanding any payment made to such holder of Preferred
Securities by the Company in connection with a Direct Action, the Company shall
remain obligated to pay the principal of or interest on the Debentures held by
the Trust or the Property Trustee. In connection with
56
any such Direct Action, the rights of the Company will be subrogated to the
rights of any holder of the Preferred Securities to the extent of any payment
made by the Company to such holder of Preferred Securities as a result of such
Direct Action. Except as set forth in this Section, the holders of Preferred
Securities shall have no right to execute any right or remedy available to the
Holders of or in respect of, the Debentures.
SECTION 5.9. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case the Company, the Trustee and the Holder shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise
provided in the last paragraph of Section 3.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of the Debentures to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy, or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Deben-
57
tures shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee, with respect to the Debentures, provided
that:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture,
(b) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee
shall have the right to decline to follow such direction if the Trustee
in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceeding so directed would be unjustly
prejudicial to the Holders not joining in any such direction or would
involve the Trustee in personal liability.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to the Debentures and, if all or part of the Debentures
is represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Debentures entitled to join in such notice,
which record date shall be at the close of business on the day the Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date, provided,
--------
that, unless the Holders of a majority in principal amount of the Outstanding
Debentures shall have joined in such notice prior to the day which is 90 days
after such record date, such notice shall automatically and without further
action by any Holder be canceled and of no further effect. Nothing in this
paragraph shall prevent a Holder, or a proxy of a Holder, from giving, after
expiration of such 90-day period, a new notice identical to a notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.12.
SECTION 5.13. Waiver of Past Defaults. Subject to Section 9.2 hereof,
the Holders of not less than a major-ity in principal amount of the Outstanding
Debentures may
58
on behalf of the Holders of all the Debentures waive any past default hereunder
with respect to Debentures and its consequences, except a default:
(a) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on the Debentures (unless
such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by
acceleration has been deposited with the Trustee), or
(b) in respect of a covenant or provision hereof which under
Article 9 cannot be modified or amended without the consent of the
Holder of each Outstanding Debenture; provided, however, that if the
-------- -------
Debentures are held by the Trust or a trustee of the Trust, such waiver
shall not be effective until the holders of a majority in liquidation
amount of Trust Securities shall have consented to such waiver;
provided, further, that if the consent of the Holder of each
-------- -------
outstanding Debenture is required, such waiver shall not be effective
until each holder of the Trust Securities shall have consented to such
waiver.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon. If the Holders of a
majority in aggregate principal amount of the Outstanding Debentures fail to
waive such Event of Default, the holders of a majority in aggregate liquidation
amount of Preferred Securities shall have such right. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
59
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Debentures, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on the Debentures on or after the Maturity
of the Debentures or to convert a Debenture in accordance with Article 13.
SECTION 5.15. Waiver of Usury, Stay, or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 6
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture,
but in the case of any such certificates
60
or opinions which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct except that
(i) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of Holders pursuant to Section
5.12 relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there shall be reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
61
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section.
SECTION 6.2. Notice of Defaults. Within 90 days after actual knowledge
by a Responsible Officer of the Trustee of the occurrence of any default
hereunder, the Trustee shall transmit by mail to all Holders of Debentures, as
their names and addresses appear in the Securities Register, notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest (including any
Additional Interest) on Debenture, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of Debentures; and provided, further, that, except in the case of
-------- -------
any default of the character specified in Section 5.1(c), no such notice to
Holders of the Debentures shall be given until at least 30 days after the
occurrence thereof For the purpose of this Section, the term "default" means any
event which is, or after notice or lapse of time or both would become, an Event
of Default.
SECTION 6.3. Certain Rights of Trustee. Subject to the provisions of
Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, Debenture or other paper or document believed
by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a
62
matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate and an Opinion of Counsel;
(d) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the
performance of its duties if the Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
(g) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, indenture, Debenture or other paper or document,
but the Trustee in its discretion may make such inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(h) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on any part of any agent or attorney
appointed with due care by it hereunder.
63
SECTION 6.4. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Debentures. The Trustee shall not be accountable for the use or
application by the Company of the Debentures or the proceeds thereof.
SECTION 6.5. May Hold Debentures. The Trustee, any Paying Agent,
Securities Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Debentures and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Securities Registrar or such
other agent.
SECTION 6.6. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability of interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 6.7. Compensation and Reimbursement. The Company agrees
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder in such amounts
as the Company and the Trustee shall agree from time to time (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursements of its
agents and counsel); and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense (including the reasonable
compensation and the
64
expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the
acceptance or administration of this trust or the performance of its
duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. This
Indemnification shall survive the termination of this Agreement.
To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Debentures on all money or property held or collected by the Trustee except
assets held in trust to pay principal and premium, if any, or interest on
particular Debentures pursuant to Section 4.1(a)(ii)(B), or pursuant to any
redemption pursuant to Article 11 hereof if monies have been deposited for such
redemption and notice has been given and the Redemption Date has passed. Such
lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Reform Act of 1978 or a successor statute.
SECTION 6.8. Disqualification; Conflicting Interests. The Trustee shall
be subject to the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of Section 310(b) of the
Trustee Indenture Act. The Trust Agreement and the Guarantee shall be deemed to
be specifically described in this Indenture for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 6.9. Corporate Trustee Required; Eligibili-ty. There shall at
all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws
of the United States of America or of any State, Territory or the
District of Columbia, authorized under such laws to exercise corporate
trust powers and subject to supervision or examina-
65
tion by Federal, State, Territorial or District of Columbia authority,
or
(b) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and
subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent
to supervision or examination applicable to United States institutional
trustees,
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
to the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee hereunder.
SECTION 6.10. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursu-ant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within
30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount
66
of the Outstanding Debentures, delivered to the Trustee and to the
Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section
6.8 after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Debenture for at
least six months, or
(ii) the Trustee shall cease to be eligible under
Section 6.9 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(iii) the Trustee shall become incapable of acting or
shall be adjudged as bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (A) the Company by Board Resolution may remove the
Trustee, or (B) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Debenture for at least six months may, on behalf of himself and all
other similarly situated Holders, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause with respect to the Debentures, the Company, by a
Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the
Debentures shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Debentures delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor
Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so
67
appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder
of a Debenture for at least six months may, subject to Section 5.14, on
behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of the Debentures as their name and addresses
appear in the Securities Register. Each notice shall include the name
of the successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. (a) In case of
the appointment hereunder of a successor Trustee, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee,
but, on the request of the Company or the Successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor, Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all rights, power
and trusts referred to in paragraph (a) of this Section.
(c) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the
68
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any Debentures
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Debentures so
authenticated, and in case any Debentures shall not have been authenticated, any
successor to the Trustee may authenticate such Debentures either in the name of
any predecessor Trustee or in the name of such successor Trustee, and in all
cases the certificate of authentication shall have the full force which it is
provided anywhere in the Debentures or in this Indenture that the certificate of
the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Debentures), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to the Debentures which
shall be authorized to act on behalf of the Trustee to authenticate the
Debentures issued upon exchange, registration of transfer or partial redemption
thereof, and Debentures so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Debentures by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State, Territory or
the District of Columbia, authorized under such laws to act as Authenti-
69
cating Agent, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of the
Debentures. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provision of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be
70
entitled to be reimbursed for such payments, subject to the provisions of
Section 6.7.
If an appointment is made pursuant to this Section, the Debentures may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Debentures referred to in the within mentioned
indenture.
---------------------------
---------------------------
As Trustee
By:
-----------------------
As Authenticating Agent
By:
-----------------------
Authorized Officer
ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Names and Addresses of Holders. The
Company will furnish or cause to be furnished to the Trustee (unless the
Trustee is acting as the Securities Registrar).
(a) quarterly at least 5 Business Days before each Interest
Payment Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of each such
date.
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished.
SECTION 7.2. Preservation of Information: Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1
71
and the names and addresses of Holders received by the Trustee in its capacity
as Securities Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and privileges of the Trustee,
shall be as provided in the Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held
accountable by reason of the disclosure of information as to the names
and addresses of the Holders made pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee. (a) The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the Trust Indenture Act, at the times and in the
manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals
of not more than 12 months shall be transmitted no later than July 15
in each calendar year, commencing with the first July 15 after the
first issuance of Debentures under this Indenture.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock
exchange or self regulatory organization of which the Trustee has
received notice by the Company upon which the Debentures are listed and
also with the Commission. The Company will notify the Trustee whenever
the Debentures are listed on any stock exchange or self-regulatory
organization.
SECTION 7.4. Reports by Company. The Company shall file with the
Trustee and with the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided in
the Trust Indenture Act, provided that any such information, documents or
--------
reports required to be filed with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934
72
shall be filed with the Trustee within 15 days after the same is required to be
filed with the Commission. Notwithstanding that the Company may not be required
to remain subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company shall continue to file with the
Commission and provide the Trustee and Holders with the annual reports and the
information, documents and other reports which are specified in Sections 13 and
15(d) of the Securities Exchange Act of 1934. The Company also shall comply with
the other provisions of Trust Indenture Act Section 314(a).
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other corporation or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge into the Company or
convey, transfer or lease its properties and assets substantially as an entirety
to the Company, unless:
(a) in case the Company shall consolidate with or merge into
another corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the corporation
formed by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of (and premium, if any) and
interest (including any Additional Interest) on all the Debentures and
the performance of every covenant of this Indenture on the part of the
Company to be performed or observed and shall have provided for
conversion rights in accordance with Article 13;
(b) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time, or
both, would
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become an Event of Default, shall have happened and
be continuing;
(c) such consolidation, merger, conveyance, transfer or lease
is permitted under the Trust Agreement and Guarantee and does not give
rise to any breach or violation of the Trust Agreement or Guarantee;
and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture complies with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with, and the Trustee, subject to Section 6.1, may
rely upon such Officers' Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this Section
8.1.
SECTION 8.2. Successor Corporation Substituted. Upon any consolidation
or merger by the Company with or into any other corporation, or any conveyance,
transfer or lease by the Company of its properties and assets substantially as
an entirety to any Person in accordance with Section 8.1, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein; and in the event of any such conveyance, transfer
or lease the Company shall be discharged from all obligations and covenants
under the Indenture and the Debentures and may be dissolved and liquidated.
Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of the Company, any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee, and, upon the Company Order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Debentures which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication
pursuant to a Company Order such provisions and any
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Debentures which such successor corporation thereafter shall cause to be signed
and delivered to the Trustee on its behalf for the purpose pursuant to such
provisions. All the Debentures so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Debentures thereafter to
be issued as may be appropriate.
ARTICLE 9
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of or notice to any Holder, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Debentures contained; or
(b) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or power
herein conferred upon the Company; or
(c) to add to covenants of the Company for the benefit of the
Holders of the Debentures or to surrender any right or power herein
conferred upon the Company; or
(d) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article 13; or
(e) to add any additional Events of Default; or
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(f) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
pursuant to this clause shall not materially adversely affect the
interest of the Holders of Debentures and for so long as any of the
Preferred Securities shall remain outstanding, the holders of such
Preferred Securities; or
(g) to evidence and provide for the acceptance of appointment
hereunder by successor Trustee and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the Trust hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11(b); or
(h) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act; or
(i) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if
any, to be placed on Debentures, and all other matters required
pursuant to Section 3.5 or otherwise necessary, desirable or
appropriate in connection with the issuance of Debentures to holders of
Preferred Securities in the event of a distribution of Debentures by
the Trust if a Special Event occurs and is continuing.
SECTION 9.2. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Debentures, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of the Debentures under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Debenture affected thereby,
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(a) except to the extent permitted by Section 3.11 with
respect to the extension of the interest payment period of the
Debentures, change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, the
Debentures, or reduce the principal amount thereof or the rate of
interest thereon or reduce any premium payable upon the redemption
thereof, or change the place of payment where, or the coin or currency
in which, any Debenture or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or
after the Maturity thereof (or, in the case of redemption, on or after
the date fixed for redemption thereof), or
(b) adversely affect any right to convert or exchange any
Debenture or modify the provisions of this Indenture with respect to
the subordination of the Debentures in a manner adverse to such Holder;
or
(c) reduce the percentage in principal amount of the
Outstanding Debentures, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture; or
(d) modify any of the provisions of this Section, Section 4.1,
Section 5.8, Section 5.13 or Section 10.6, except to increase any such
percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Debenture affected thereby, or the consent of the
holders of all the Preferred Securities as the case may be; or
(e) modify the provisions in Article 12 of this Indenture with
respect to the subordination of Outstanding Debentures in a manner
adverse to the Holders thereof;
provided that, so long as any Preferred Securities remain outstanding no
termination of this Indenture shall occur, and no waiver of any Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of at least a majority of the aggregate
liquidation preference of such
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Preferred Securities then outstanding unless and until the principal (and
premium, if any) of the Debentures and all accrued and unpaid interest
(including any Additional Interest) thereon have been paid in full.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trust created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.1) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture, and that all conditions precedent
have been complied with. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes, and every Holder of the Debentures theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.5. Conformity with Trust Indentures Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Debentures
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and
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authenticated and delivered by the Trustee in exchange for Outstanding
Debentures presented to the Trustee.
ARTICLE 10
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest. The Company
covenants and agrees for the benefit of the Debentures that it will duly and
punctually pay the principal of (and premium, if any) and interest on the
Debentures in accordance with the terms of the Debentures and this Indenture.
SECTION 10.2. Maintenance of Office or Agency. The Company will
maintain in the United States, an office or agency where Debentures may be
presented or surrendered for payment and an office or agency where Debentures
may be surrendered for transfer or exchange and where notices and demands to or
upon the Company in respect of the Debentures and this Indenture may be served.
The Company initially appoints the Trustee, acting through its Corporate Trust
Office, as its agent for said purposes. The Company will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company shall fail to maintain such office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
United States for such purposes. The Company will give prompt written notice to
the Trustee of any such designation and any change in the location of any such
office or agency.
SECTION 10.3. Money for Debenture Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to the
Debentures, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Debentures,
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segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its failure so to
act.
Whenever the Company shall have one or more Paying Agents, it will, on
or before each due date of the principal of or interest on the Debentures,
deposit with a Paying Agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal and premium (if any) or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Debentures in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or
any other obligor upon the Debentures) in the making of any payment of
principal (and premium, if any) or interest;
(c) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(d) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as
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those upon which such sums were held by the Company or such Paying Agent, and,
upon such payment by the Company or any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Debenture and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall (unless otherwise required by mandatory provision of applicable escheat or
abandoned or unclaimed property law) be paid on Company Request, after all
payments owing the Trustee have been paid, to the Company, or (if then held by
the Company) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Debenture shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease.
SECTION 10.4. Payment of Taxes and Other Claims. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
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shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 10.5. Statement as to Compliance. The Company shall deliver to
the Trustee, within 120 days after the end of each calendar year of the Company
ending after the date hereof an Officers' Certificate (signed by at least one of
the officers referred to in Section 314(a)(4) of the Trust Indenture Act)
covering the preceding calendar year, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance,
observance or fulfillment of or
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compliance with any of the terms, provisions, covenants and conditions of this
Indenture, and if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge. For the
purpose of this Section 10.5, compliance shall be determined without regard to
any grace period or requirement of notice provided pursuant to the terms of this
Indenture.
SECTION 10.6. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any covenant or condition set forth in this
Article 10, if before or after the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Debentures, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condi-tion except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company in
respect of any such covenant or condition shall remain in full force and effect.
SECTION 10.7. Additional Sums. In the event that (a) the Property
Trustee is the Holder of all of the Outstanding Debentures, (b) a Tax Event in
respect of the Trust shall have occurred and be continuing and (c) the Company
shall not have (i) redeemed the Debentures pursuant to Section 11.7 or 11.8 or
(ii) terminated the Trust pursuant to Section 9.2(b) of the Trust Agreement, the
Company shall pay to the Trust (and its permitted successors or assigns under
the Trust Agreement) for so long as the Trust (or its permitted successor or
assignee) is the registered holder of the Debentures, such additional amounts as
may be necessary in order that the amount of distributions (including any
Additional Amounts (as defined in the Trust Agreement)) then due and payable by
the Trust on the Preferred Securities and Common Securities that at any time
remain outstanding in accord with the terms thereof shall not be reduced as a
result of any Additional Taxes (the "Additional Sums"). Whenever in this
Indenture or the Debentures there is a reference in any context to the payment
of principal of or interest on the Debentures, such mention shall be deemed to
include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this paragraph
and express mention of the payment of Additional Sums (if applicable) in any
provisions hereof shall not
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be construed as excluding Additional Sums in those provisions hereof where such
express mention is not made, provided, however, that the extension of an
interest payment period pursuant to Section 3.11 or the Debentures shall not
extend the payment of any Additional Sums that may be due and payable during
such interest payment period.
SECTION 10.8. Additional Covenants. The Company covenants and agrees
with each Holder of Debentures that so long as the Debentures are outstanding,
if (i) there shall have occurred any event of which the Company has actual
knowledge that (A) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (B) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) the Company shall be in
default with respect to its payment of any obligations under the Guarantee or
(iii) the Company shall have given notice of its selection of an Extension
Period as provided herein and shall not have rescinded such notice, or such
period, or any extension thereof, shall be continuing, then the Company shall
not, and shall cause any Subsidiary not to, (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any shares of the Company's capital stock or (y) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees of indebtedness for money
borrowed) of the Company that rank pari passu with or junior to the Debentures
(other than (1) any dividend, redemption, liquidation, interest, principal or
guarantee payment by the Company where the payment is made by way of securities
(including capital stock) that rank pari passu with or junior to the securities
on which such dividend, redemption, interest, principal or guarantee payment is
being made, (2) redemptions or purchases of any rights pursuant to the Company's
Shareholders Rights Plan, or any successor to such Shareholders Rights Plan, and
the declaration of a dividend of such rights or the issuance of preferred stock
under such plans in the future, (3) payments under the Guarantee, (4) purchases
of Common Stock related to the issuance of Common Stock under any of the
Company's benefit plans for its directors, officers or employees, (5) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one series or class of the Company's capital stock for another
series or class of the Company's capital stock and (6) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or
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exchange provisions of such capital stock or the security being converted or
exchanged).
The Company also covenants with each Holder of the Debentures (i) that
for so long as Preferred Securities are outstanding not to convert the
Debentures except pursuant to a notice of conversion delivered to the Conversion
Agent by a holder of Preferred Securities and (ii) to maintain directly or
indirectly 100% ownership of the Common Securities of the Trust; provided,
however, that any permitted successor of the Company hereunder may succeed to
the Company's ownership of such Common Securities, (iii) not to voluntarily
terminate, wind-up or liquidate the Trust, except (a) in connection with a
distribution of the Debentures to the holders of Preferred Securities in
liquidation of the Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the Trust Agreement and (iv) to use
its reasonable efforts, consistent with the terms and provisions of the Trust
Agreement to cause the Trust to remain a business trust and not to be classified
as an association taxable as a corporation for United States Federal income tax
purposes.
SECTION 10.9. Registration Rights. The holders of the Preferred
Securities, the Holders, the holders of the Guarantee and the shares of Common
Stock of the Company issuable upon conversion of the Securities are entitled to
the benefits of a Registration Rights Agreement, dated as of December 2, 1996,
among the Company and the Purchasers (the "Registration Rights Agreement").
SECTION 10.10. Payment of Expenses of the Trust. In connection with the
offering, sale and issuance of the Debentures to the Property Trustee and in
connection with the sale of the Preferred Securities by the Trust, the Company
shall:
(a) pay for all costs, fees and expenses relating to the
offering, sale and issuance of the Securities (as defined in the Purchase
Agreement), including commissions, discounts and expenses payable pursuant to
the Purchase Agreement and compensation of the Trustee under the Indenture in
accordance with the provisions of Section 6.7 of the Indenture;
(b) be responsible for and pay for all debts and obligations
(other than with respect to the Preferred Securities) of the Trust, pay for all
costs and expenses of the Trust (including, but not limited to, costs and
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expenses relating to the organization of the Trust, the offering, sale and
issuance of the Preferred Securities (including commissions, discounts and
expenses in connection therewith), the fees and expenses of the Property Trustee
and the Delaware Trustee, the costs and expenses relating to the operation of
the Trust, including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets); and
(c) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
ARTICLE 11
REDEMPTION OR EXCHANGE OF DEBENTURES
SECTION 11.1. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Debentures shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company, the
Company shall, not less than 45 days prior to the date fixed for redemption
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee in writing of such date and of the principal amount of Debentures to be
redeemed.
SECTION 11.2. Selection of Debentures to Be Redeemed. If less than all
the Debentures are to be redeemed, the particular Debentures to be redeemed
shall be selected not more than 45 days prior to the Redemption Date by the
Trustee from the Outstanding Debentures not previously called for redemption, by
lot or by such other method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of a portion of the principal
amount of the Debentures Outstanding, provided that the unredeemed portion of
the principal amount of the Debentures be in an authorized denomination (which
shall not be less than the minimum authorized denomination) for the Debentures.
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The Trustee shall promptly notify the Company in writing of the
Debentures selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures shall relate,
in the case of any Debenture redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debenture which has been or is to be
redeemed. If the Company shall so direct, Debentures registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Debentures selected for redemption.
SECTION 11.3. Notice of Redemption. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not later than the thirtieth day,
and not earlier than the sixtieth day, prior to the date fixed for redemption,
to each Holder of Debentures to be redeemed, at the address of such Holder as it
appears in the Securities Register.
With respect to Debentures to be redeemed, each notice of redemption
shall state:
(a) the Redemption Date;
(b) the redemption price at which the Debentures are to be
redeemed (the "Redemption Price");
(c) if less than all Outstanding Debentures are to be
redeemed, the identification (and, in the case of partial redemption,
the respective principal amounts) of the particular Debentures to be
redeemed (including, if relevant, the CUSIP or ISIN number);
(d) that on the Redemption Date the Redemption Price will
become due and payable upon each such Debenture or portion thereof, and
that upon deposit with the Paying Agent interest thereon, if any, shall
cease to accrue on and after the Redemption Date;
(e) the place or places where the Debentures are to be
surrendered for payment of the redemption price at which the Debentures
are to be redeemed; and
(f) that a Holder of Debentures who desires to convert
Debentures called for redemption must satisfy the requirements for
conversion contained in the
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Debentures, the then existing conversion price or rate, and the date
and time when the option to convert shall expire.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Debenture designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Debenture.
SECTION 11.4. Deposit of Redemption Price. Prior to 12:00 noon, New
York City time, on the Redemption Date specified in the notice of redemption
given as provided in Section 11.3, the Company will deposit with the Trustee or
with one or more Paying Agents (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 4.2) an amount of
money sufficient to redeem on the Redemption Date all the Debentures so called
for redemption at the applicable Redemption Price.
If any Debenture called for redemption has been converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Debenture shall (subject to any right of the
Holder of such Debenture or any Predecessor Debenture to receive interest as
provided in the last paragraph of Section 3.7) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 11.5. Debentures Payable on Redemption Date. If notice of
redemption has been given as provided in Section 11.3, the Debentures so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, including any accrued interest (and any Additional
Interest) thereon, and from and after such date (unless the Company shall
default in the payment of the Redemption Price or any accrued interest on
(including any Additional Interest)) such Debentures shall cease to bear
interest. Upon surrender of any such Debenture for redemption in accordance with
said notice, such Debenture shall be paid by the Company at
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the Redemption Price, including any accrued interest (and any Additional
Interest) to the Redemption Date, provided, however, that installments of
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interest on Debentures whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Debentures, or one of more
Predecessor Debentures, registered as such at the close of business on the
relevant Regular Record Dates or Special Record Dates, as the case may be,
according to their terms and the provisions of Section 3.7.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Debenture.
SECTION 11.6. Debentures Redeemed in Part. In the event of any
redemption in part, the Company shall not be required to (i) issue, register the
transfer of or exchange any Debenture during a period beginning at 9:00 a.m.
(New York City time) 15 Business Days before any selection for redemption of
Debentures and ending at 5:00 p.m. (New York City time) on the earliest date in
which the relevant notice of redemption is deemed to have been given to all
holders of Debentures to be so redeemed and (ii) register the transfer of or
exchange any Debentures so selected for redemption, in whole or in part, except
for the unredeemed portion of any Debentures being redeemed in part.
Any Debenture which is to be redeemed only in part shall be surrendered
at the place of payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Debenture without service charge, a new Debenture or Debentures, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Debenture so surrendered. Each Debenture shall be subject to partial
redemption only in the amount of $50 or integral multiples thereof.
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The Debentures are not entitled to the benefit of any Sinking or like
fund.
SECTION 11.7. Mandatory Redemption. Upon (i) repayment at maturity or
(ii) as a result of acceleration upon the occurrence of an Event of Default, the
Company shall redeem all the Outstanding Debentures at a redemption price equal
to 100% of the principal amount of such Debentures plus any accrued and unpaid
interest, including any Additional Interest, to the date fixed for redemption.
SECTION 11.8. Optional Redemption. Except as set forth below, on and
after December 2, 1999 and subject to the next succeeding sentence, the Company
shall have the right, at any time and from time to time, to redeem the
Debentures, in whole or in part, upon notice given as set forth in Section 11.3
during the twelve-month periods beginning on December 2 in each of the following
years at the indicated Redemption Price (expressed as a percentage of the
principal amount of the Debentures being redeemed), together with any accrued
but unpaid interest on the portion being redeemed:
Redemption Price Redemption Price
Year (%) of principal amount) Year (% of principal amount)
---- ------------------------ ---- -----------------------
1999............. 104.725% 2003.............. 102.025%
2000............. 104.050% 2004.............. 101.350%
2001............. 103.375% 2005.............. 100.675%
2002............. 102.700% 2006 and thereafter 100.000%
The principal amount of the Debentures so redeemed may not, however,
exceed the amount of the proceeds derived, directly or indirectly, by the
Company or its Subsidiaries from the issuance and sale of Common Stock within
two years preceding the date fixed for redemption. The Company may not redeem
the Debentures in part unless all accrued and unpaid interest has been paid in
full on all outstanding Debentures for all quarterly interest periods
terminating on or prior to the giving of notice of the Redemption Date.
If at any time following the Conversion Expiration Date, less than 5%
of the original aggregate principal amount of the Debentures remains
Outstanding, such Debentures shall be redeemable at the option of the Company,
in whole but not in part, at a Redemption Price equal to
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the principal amount thereof, plus any accrued and unpaid interest.
Upon the occurrence of a Tax Event, the Company shall have the right,
upon not less than 30 nor more than 60 days' notice, to redeem the Debentures in
whole or in part, for cash upon the later of (i) 90 days following the
occurrence of such Tax Event or (ii) December 2, 1999, at a Redemption Price
equal to the principal amount of such Debentures plus any accrued and unpaid
interest, including Additional Interest, to the date fixed for such redemption.
SECTION 11.9. Exchange of Trust Securities for Debentures. (a) At any
time, the Company shall have the right to terminate the Trust and cause the
Debentures to be distributed to the holders of the Preferred Securities in
liquidation of the Trust after satisfaction of liabilities to creditors of the
Trust as provided by applicable law.
(b) If a Special Event in respect of the Trust shall occur,
the Company shall give the Property Trustee notice of the same. If a Special
Event in respect of the Trust shall occur and be continuing, the Trust Agreement
requires the Property Trustee to direct the Conversion Agent (as defined in the
Trust Agreement) to exchange all outstanding Trust Securities for the Debentures
having a principal amount equal to the aggregate liquidation amount of the Trust
Securities to be exchanged with accrued interest in an amount equal to any
unpaid distributions (including any Additional Amounts) on the Trust Securities
provided that, in the case of a Tax Event, the Company shall have the right to
--------
direct the Property Trustee that less than all, or none of the Trust Securities
be so exchanged (i) if and for so long as the Company shall have elected to pay
any Additional Sums such that the net amounts received by holders of the Trust
Securities not so exchanged in respect of distributions are not reduced as a
result of such Tax Event, and shall not have revoked any such election or failed
to make such payments or (ii) if the Company shall instead elect to redeem the
Debentures, in whole or in part, in the manner set forth in Section 11.8.
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ARTICLE 12
SUBORDINATION OF DEBENTURES
SECTION 12.1. Debentures Subordinate to Senior Debt. The Company
covenants and agrees, and each Holder of a Debenture, by its acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article, the payment of the principal of (and premium, if any)
and interest (including any Additional Interest) on each and all of the
Debentures are hereby expressly made subordinate and subject in right of payment
to the prior payment in full of all amounts then due and payable in respect of
all Senior Debt (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt.
SECTION 12.2. Payment Over of Proceeds Upon Dissolution, Etc. In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company (each such event, if any, herein sometimes
referred to as a "Proceeding"), then the holders of Senior Debt shall be
entitled to receive payment in full of principal of (and premium, if any) and
interest (including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt), if any, on such Senior Debt,
or provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Debentures are entitled to receive or retain any payment or
distribution of any kind or character, whether in cash, property or Debentures
(including any payment or distribution which may be payable or deliverable by
reason of the payment of any other Debt of the Company (including the
Debentures) subordinated to the payment of the Debentures, but not including any
payments that are made from funds on deposit pursuant to Section 4.1(a)(ii)(B)
or funds on deposit for the redemption of Debentures for which notice of
Redemption has been given and the applicable Redemption Date has passed, such
payment or distribution being hereinafter referred to as a "Junior Subordinated
Payment"), on account of principal of (or premium, if any) or interest
(including any Additional Interest) on the Debentures or on account of the
purchase or other acquisition of Debentures by the Company or any Subsidiary and
to that end the holders of
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Senior Debt shall be entitled to receive, for application to the payment thereof
any payment or distribution of any kind of character, whether in cash, property
or Debentures, including any Junior Subordinated Payment, which may be payable
or deliverable in respect of the Debentures in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Debenture shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or Debentures, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment or distribution shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt in
full, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
For the purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Debentures are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article 8 shall not be deemed
a Proceeding for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale such properties and assets
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as an entirety, as the case may be, shall, as a part of such consolidation,
merger, or sale comply with the conditions set forth in Article Eight.
SECTION 12.3. Prior Payment to Senior Debt upon Acceleration of
Debentures. In the event that the Debentures are declared due and payable before
their Maturity, then and in such event the holders of the Senior Debt
outstanding at the time the Debentures so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Debentures
are entitled to receive any payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment) by the Company on account of the principal of (or premium, if any) or
interest (including any Additional Interest) on the Debentures or on account of
the purchase or other acquisition of Debentures by the Company or any
Subsidiary.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of the Debentures prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known, as set forth in Section 12.10,
to the Trustee or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.4. No Payment When Senior Debt in Default. (a) In the event
and during the continuation of any default in the payment of principal of (or
premium, if any) or interest on any Senior Debt, or in the event that any event
of default with respect to any Senior Debt shall have occurred and be continuing
and shall have resulted in such Senior Debt becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, unless and until such event of default shall have been cured or waived
or shall have ceased to exist and such acceleration shall have been rescinded or
annulled, or (b) in the event any
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judicial proceeding shall be pending with respect to any such default in payment
or such event or default, then no payment or distribution of any kind or
character, whether in cash, properties or Debentures (including any Junior
Subordinated Payment) shall be made by the Company on account of principal of
(or premium, if any) or interest (including any Additional Interest), if any, on
the Debentures or on account of the purchase or other acquisition of Debentures
by the Company or any Subsidiary other than payments made from funds on deposit
pursuant to Section 4.1(a)(ii)(B) or from funds on deposit for the redemption of
Debentures for which notice of redemption has been given and the Redemption Date
has passed.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of the Debentures prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known as set forth in Section 12.10, to
the Trustee or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.5. Payment Permitted If No Default. Nothing contained in
this Article or elsewhere in this Indenture or in any of the Debentures shall
prevent (a) the Company, at any time except during the pendency of any
Proceeding referred to in Section 12.2 or under the conditions described in
Sections 12.3 and 12.4, from making payments at any time of principal of (and
premium, if any) or interest on the Debentures, or (b) the application by the
Trustee of any money deposited with it hereunder to the payment of or on account
of the principal of (and premium, if any) or interest (including any Additional
Interest) on the Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, the Trustee did not have actual
knowledge that such payment would have been prohibited by the provisions of this
Article.
SECTION 12.6. Subrogation to Rights of Holders of Senior Debt. Subject
to the payment in full of all Senior Debt, or the provision for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of
Senior Debt, the Holders of the Debentures
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shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Debt pursuant to the provisions of this Article (equally
and ratably with the holders of all indebtedness of the Company which by its
express terms is subordinated to Senior Debt of the Company to substantially the
same extent as the Debentures are subordinated to the Senior Debt and is
entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Senior Debt) to the rights of the holders
of such Senior Debt to receive payments and distributions of cash, property and
securities applicable to the Senior Debt until the principal of (and premium, if
any) and interest on the Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders of the Debentures or the
Trustee would be entitled except for the provisions of this Article, and no
payments pursuant to the provisions of this Article to the holders of Senior
Debt by Holders of the Debentures or the Trustee, shall, as among the Company,
its creditors other than holders of Senior Debt, and the Holders of the
Debentures, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.
SECTION 12.7. Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Debentures on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Debentures is intended to or
shall (a) impair, as between the Company and the Holders of the Debentures, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Debentures the principal of (and premium, if any) and interest
(including any Additional Interest) on the Debentures as and when the same shall
become due and payable in accordance with their terms, or (b) affect the
relative rights against the Company of the Holders of the Debentures and
creditors of the Company other than their rights in relation to the holders of
Senior Debt, or (c) prevent the Trustee or the Holder of any Debenture from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture including, without limitation, filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article of the holders of
Senior Debt to receive cash, property and
95
securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 12.8. Trustee to Effectuate Subordination. Each Holder of a
Debenture by his or her acceptance thereof authorizes and directs the Trustee on
his or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination provided in this Article and
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
SECTION 12.9. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof that any such holder may have or be otherwise charged with.
SECTION 12.10. Notice to Trustee. The Company shall give prompt written
notice to the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Debentures.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Debentures, unless and until the Trustee shall have received
written notice thereof from the Company or a person representing itself as a
holder of Senior Debt or from any trustee, agent or representative therefor
(whether or not the facts contained in such notice are true).
SECTION 12.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Article 6, and the
Holders of the Debentures shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which a Proceeding is pending,
or a certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Debentures, for the purpose of ascertaining the Persons entitled to participate
in such
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payment or distribution, the holders of the Senior Debt and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article.
SECTION 12.12. Trustee Not Fiduciary for Holders of Senior Debt. With
respect to the holders of the Senior Debt of the Company, the Trustee undertakes
to perform or observe only such of its obligations and covenants as are set
forth in this Article 12, and no implied covenants or obligations with respect
to the holders of such Senior Debt shall be read into this Indenture against IBJ
Xxxxxxxx and/or the Trustee. IBJ Xxxxxxxx and/or the Trustee shall not be deemed
to owe any fiduciary duty to the holders of such Senior Debt and, subject to the
provisions of Section 6.3, neither the Trustee (nor IBJ Xxxxxxxx) shall be
liable to the holder of any Senior Debt if it shall pay over or deliver to
Holders, the Company, or any other person, money or assets to which any holder
of such Senior Debt shall be entitled to by virtue of this Article 12 or
otherwise.
SECTION 12.13. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and, subject to the requirements of the Trust Indenture Act, nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.
SECTION 12.14. Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intent
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee.
SECTION 12.15. Certain Conversions or Exchanges Deemed Payment. For the
purpose of this Article only, (a) the issuance and delivery of junior securities
upon conversion or exchange of Debentures shall not be deemed to constitute a
payment or distribution on account of the principal of (or premium, if any) or
interest (including any Additional Interest) on the Debentures or on account
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of the purchase or other acquisition of Debentures, and (b) the payment,
issuance or delivery of cash (including any payments for fractional shares),
property or securities (other than junior securities) upon conversion or
exchange of a Debenture shall be deemed to constitute payment on account of the
principal of such security. For the purpose of this Section, the term "junior
securities" means (i) shares of any stock of any class of the Company and (ii)
securities of the Company which are subordinated in right of payment to all
Senior Debt which may be outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than, the
Debentures are so subordinated as provided in this Article.
ARTICLE 13
CONVERSION OF DEBENTURES
SECTION 13.1. Conversion Rights. Subject to and upon compliance with
the provisions of this Article, the Debentures are convertible, at the option of
the Holder, at any time prior to the Conversion Expiration Date, into fully paid
and nonassessable shares of Common Stock of the Company at an initial conversion
rate of 2.6876 shares of Common Stock for each $50 in aggregate principal amount
of Debentures (equal to a conversion price of $18.604 per share of Common
Stock), subject to adjustment as described in this Article 13 (as adjusted the
"Conversion Price"). A Holder of Debentures may convert any portion of the
principal amount of the Debentures into that number of fully paid and
nonassessable shares of Common Stock (calculated as to each conversion to the
nearest 1/100th of a share) obtained by dividing the principal amount of the
Debentures to be converted by the Conversion Price. In case a Debenture or
portion thereof is called for redemption, such conversion right in respect of
the Debenture or portion so called shall expire at the close of business on the
Business Day immediately preceding the corresponding Redemption Date, unless the
Company defaults in making the payment due upon redemption.
SECTION 13.2. Conversion Procedures. (a) In order to convert all or a
portion of the Debentures, the Holder thereof shall deliver to the Property
Trustee, as conversion agent or to such other agent appointed for such purposes
(the "Conversion Agent") an irrevocable Notice of Conversion setting forth the
principal amount of
98
Debentures to be converted, together with the name or names, if other than the
Holder, in which the shares of Common Stock should be issued upon conversion
and, if such Debentures are definitive Debentures, surrender to the Conversion
Agent the Debentures to be converted, duly endorsed or assigned to the Company
or in blank. In addition, a holder of Preferred Securities may exercise its
right under the Trust Agreement to convert such Preferred Securities into Common
Stock by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Preferred Security for a portion of
the Debentures held by the Trust (at an exchange rate of $50 principal amount of
Debentures for each Preferred Security) and (ii) to immediately convert such
Debentures, on behalf of such holder, into Common Stock of the Company pursuant
to this Article 13 and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the Company
or in blank. So long as any Preferred Securities are outstanding, the Trust
shall not convert any Debentures except pursuant to a Notice of Conversion
delivered to the Conversion Agent by a holder of Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular Record
Date and prior to the subsequent Interest Payment Date, the Holder of record on
the Regular Record Date will be entitled to receive the interest paid on the
subsequent Interest Payment Date on the portion of Debentures to be converted
notwithstanding the conversion thereof prior to such Interest Payment Date.
Except as otherwise provided in the immediately preceding sentence, in the case
of any Debenture which is converted, interest whose Stated Maturity is on or
after the date of conversion of such Debenture shall not be payable, and the
Company shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Debentures being
converted, which shall be deemed to be paid in full. Each conversion shall be
deemed to have been effected immediately prior to the close of business on the
day on which the Notice of Conversion was received (the "Conversion Date") by
the Conversion Agent from the Holder or from a holder of the Preferred
Securities effecting a conversion thereof pursuant to its conversion rights
under the Trust Agreement, as the case may be. The Person or Persons entitled to
receive the Common Stock issuable upon such conversion shall be treated for
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all purposes as the record holder or holders of such Common Stock as of the
Conversion Date and such Person or Persons will cease to be a record Holder or
record Holders of the Debentures on that date. As promptly as practicable on or
after the Conversion Date, the Company shall issue and deliver at the office of
the Conversion Agent, unless otherwise directed by the Holder or holder in the
Notice of Conversion, a certificate or certificates for the number of full
shares of Common Stock issuable upon such conversion, together with the cash
payment, if any, in lieu of any fraction of any share to the Person or Persons
entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
(b) The Company's delivery upon conversion of the fixed
number of shares of Common Stock into which the Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at
Maturity of the portion of Debentures so converted and any unpaid interest
(including Additional Interest and Liquidated Damages) accrued on such
Debentures at the time of such conversion.
(c) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Current Market Price with respect to such fractional interest on the date on
which the Debentures or Preferred Securities, as the case may be, were duly
surrendered to the Conversion Agent for conversion, and the Conversion Agent in
turn will make such payment, if any, to the Holder of the Securities or the
holder of the Preferred Securities so converted.
(d) In the event of the conversion of any Debenture in part
only, a new Debenture or Debentures for the unconverted portion thereof will be
issued in the name of the Holder thereof upon the cancellation of the Debenture
converted in part in accordance with Section 3.5.
(e) In effecting the conversion transactions described in
this Section, the Conversion Agent is acting as agent of the holders of
Preferred Securities (in the exchange of Preferred Securities for Debentures)
and as agent of the Holders of Debentures (in the conversion of Debentures into
Common Stock), as the case may be, di-
100
recting it to effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to exchange Debentures held by the Trust from time to time
for Preferred Securities in connection with the conversion of such Preferred
Securities in accordance with this Article 13 and (ii) to convert all or a
portion of the Debentures into Common Stock and thereupon to deliver such shares
of Common Stock in accordance with the provisions of this Article 13 and to
deliver to the Trust a new Debenture or Debentures for any resulting unconverted
principal amount.
(f) All shares of Common Stock delivered upon any conversion
of Restricted Securities shall bear a Restrictive Securities Legend
substantially in the form of the legend required to be set forth on such
Debentures and shall be subject to the restrictions on transfer provided in such
legend and in Section 3.5 hereof. Neither the Trustee nor the Conversion Agent
shall have any responsibility for the inclusion or content of any such
Restrictive Securities Legend on such Common Stock; provided, however, that the
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Trustee or the Conversion Agent shall have provided to the Company or to the
Company's transfer agent for such Common Stock, prior to or concurrently with a
request to the Company to deliver to such Conversion Agent certificates for such
Common Stock, written notice that the Debentures delivered for conversion are
Restricted Securities.
(g) The Company shall at all times reserve and keep available
out of its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, such number of shares of Common Stock as shall
from time to time be issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, the Company shall be entitled to
deliver upon conversion of Debentures shares of Common Stock reacquired and held
in the treasury of the Company (in lieu of the issuance of authorized and
unissued shares of Common Stock) so long as any such treasury shares are free
and clear of all liens, charges, security interests or encumbrances. Whenever
the Company issues shares of Common Stock upon conversion of Debentures and the
Company has in effect at such time a share purchase rights agreement under which
holders of Common Stock are issued rights ("Rights") entitling the holders under
certain circumstances to purchase an additional share or shares of stock, the
Company will issue, together with each such share of Common Stock, such number
of Rights (which number may be a fraction) as shall at that time be issu-
101
able with a share of Common Stock pursuant to such share purchase rights
agreement (currently, half of a Right). Any shares of Common Stock issued upon
conversion of the Debentures shall be duly authorized, validly issued and fully
paid and nonassessable. The Conversion Agent shall deliver the shares of Common
Stock received upon conversion of the Debentures to the converting Holder free
and clear of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. The Company shall use its best efforts to
obtain and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all applicable
requirements as to registration or qualification of the Common Stock (and all
requirements to list the Common Stock issuable upon conversion of Debentures
that are at the time applicable), in order to enable the Company to lawfully
issue Common Stock upon conversion of the Debentures and to lawfully deliver the
Common Stock to each Holder upon conversion of the Debentures.
(h) The Company will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of Common Stock on
conversion of Debentures. The Company shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which the
Debentures so converted were registered, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the
Conversion Agent the amount of any such tax, or has established to the
satisfaction of the Conversion Agent that such tax has been paid.
(i) Nothing in this Article 13 shall limit the requirement of
the Company to withhold taxes pursuant to the terms of the Debentures or as set
forth in this Agreement or otherwise require the Trustee or the Company to pay
any amounts on account of such withholdings.
SECTION 13.3. Expiration of Conversion Rights. (a) On and after
December 2, 1999, the Company may, at its option, cause the conversion rights of
Holders of Debentures to expire; provided, however, that the Company may
exercise this option only if for 20 trading days within any period of 30
consecutive trading days, including the last trading day of such period, the
Current Market Price of Common Stock exceeds 120% of the Conversion Price of the
Debentures, subject to adjustment as described in this Section.
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(b) In order to exercise its option to terminate the
conversion rights of the Debentures, the Company must issue a press release for
publication on the Dow Xxxxx News Service announcing the Conversion Expiration
Date prior to the opening of business on the second trading day after any period
in which the condition in Section 13.3(a) has been met, but in no event prior to
December 2, 1999. The press release shall announce the Conversion Expiration
Date (which may not occur sooner than 30 nor more than 60 days after the Company
issues the press release announcing its intention to terminate the conversion
rights of the Debentures) and provide the current Conversion Price and Current
Market Price of Common Stock, in each case as of the close of business on the
trading day next preceding the date of the press release. Conversion rights will
terminate at the close of business on the Conversion Expiration Date.
(c) In addition to issuing the press release referred to in
the preceding paragraph the Company or at the Company's request, the Property
Trustee, shall send notice of the expiration of conversion rights by first-class
mail to the Holders of the Debentures not more than four Business Days after the
Company issues the press release. Such mailed notice of the expiration of the
conversion rights of the Holders shall state: (i) the Conversion Expiration
Date; (ii) the Conversion Price of the Debentures and the Current Market Price
of the Common Stock, in each case as of the close of business on the Business
Day next preceding the date of the notice of expiration of the conversion rights
of the Holders; (iii) the place or places at which Debentures may be surrendered
prior to the Conversion Expiration Date for certificates representing shares of
Common Stock; and (iv) such other information or instructions as the Company
deems necessary or advisable to enable a Holder to exercise its conversion right
hereunder. No defect in the notice of expiration of the conversion rights of the
Holders or in the mailing thereof with respect to any Debentures shall affect
the validity of such notice with respect to any other Debenture. As of the close
of business on the Conversion Expiration Date, the Debenture shall no longer be
convertible into Common Stock. If the Company does not exercise its option to
terminate the conversion rights of the Holders of the Debentures, the Conversion
Expiration Date with respect to the Debentures will be the close of business two
Business Days preceding the date set for redemption of the Debentures upon the
mandatory redemption or Stated Maturity of the Debentures.
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SECTION 13.4. Conversion Price Adjustments. The conversion price shall
be subject to adjustment (without duplication) from time to time as follows:
(a) In case the Company shall, while any of the Debentures
are outstanding, (i) pay a dividend or make a distribution with respect to its
Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares or (iv) issue by reclassification of its shares of
Common Stock any shares of capital stock of the Company, the conversion
privilege and the Conversion Price in effect immediately prior to such action
shall be adjusted so that the Holder of any Debentures thereafter surrendered
for conversion shall be entitled to receive the number of shares of capital
stock of the Company which he would have owned immediately following such action
had such Debentures been converted immediately prior thereto. An adjustment made
pursuant to this subsection (a) shall become effective immediately after the
record date in the case of a dividend or other distribution and shall become
effective immediately after the effective date in case of a subdivision,
combination or reclassification (or immediately after the record date if a
record date shall have been established for such event). If, as a result of an
adjustment made pursuant to this subsection (a), the Holder of any Debenture
thereafter surrendered for conversion shall become entitled to receive shares of
two or more classes or series of capital stock of the Company, the Board of
Directors (whose determination shall be conclusive and shall be described in a
Board Resolution filed with the Trustee) shall determine the allocation of the
adjusted Conversion Price between or among shares of such classes or series of
capital stock. In the event that such dividend, distribution, subdivision,
combination or issuance is not so paid or made, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
record date had not been fixed.
(b) In case the Company shall, while any of the Debentures
are Outstanding, issue rights or warrants to all holders of its Common Stock
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Common Stock at a price
per share less than the Current Market Price per share of Common Stock on the
record date mentioned below, the Conversion Price for the Debentures shall be
adjusted so that the same shall equal the price
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determined by multiplying the Conversion Price in effect immediately prior to
the date of issuance of such rights or warrants by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on the date
of issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such Current Market Price, and of
which the denominator shall be the number of shares of Common Stock outstanding
on the date of issuance of such rights or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase. Such adjustment
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such rights or warrants. For the purposes of
this subsection, the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. The Company shall
not issue any rights or warrants in respect of shares of Common Stock held in
the treasury of the Company. In case any rights or warrants referred to in this
subsection in respect of which an adjustment shall have been made shall expire
unexercised within 45 days after the same shall have been distributed or issued
by the Company, the Conversion Price shall be readjusted at the time of such
expiration to the Conversion Price that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.
(c) Subject to the last sentence of this sub-paragraph, in
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares of any class or series of
capital stock, cash or assets (including securities, but excluding any rights or
warrants referred to in subparagraph (b), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in subparagraph
(a) of this Section 13.4), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this sub-paragraph (c) by a fraction of which the numerator
shall be the Current Market Price per share of the Common Stock on the date
fixed for the payment of such distribution (the "Reference Date") less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors), on the Reference
105
Date, of the portion of the evidences of indebtedness, shares of capital stock,
cash and assets so distributed applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common Stock,
such reduction to become effective immediately prior to the opening of business
on the day following the Reference Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not occurred. For purposes of this subparagraph
(c), any dividend or distribution that includes shares of Common Stock or rights
or warrants to subscribe for or purchase shares of Common Stock shall be deemed
instead to be (i) a dividend or distribution of the evidences of indebtedness,
shares of capital stock, cash or assets other than such shares of Common Stock
or such rights or warrants (making any Conversion Price reduction required by
this subparagraph (c)) immediately followed by (ii) a dividend or distribution
of such shares of Common Stock or such rights or warrants (making any further
conversion price reduction required by subparagraph (a) or (b)), except (A) the
Reference Date of such dividend or distribution as defined in this subparagraph
shall be substituted as (x) "the record date in the case of a dividend or other
distribution," and (y) "the record date for the determination of stockholders
entitled to receive such rights or warrants" and (z) "the date fixed for such
determination" within the meaning of subparagraphs (a) and (b) and (B) any
shares of Common Stock included in such dividend or distribution shall not be
deemed outstanding for purposes of computing any adjustment of the conversion
price in subparagraph (a).
(d) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding all regular cash
dividends, if the annualized amount thereof per share of Common Stock does not
exceed 12.5% of the current market price per share of the Common Stock on the
trading day immediately preceding the date of declaration of such dividend), the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by this
subparagraph (d) by a fraction of which the numerator shall be the Current
Market Price per share of the Common Stock on the date fixed for the payment of
such distribution less the amount of cash so distributed (excluding that portion
of such distribution that does not exceed
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12.5% of the Current Market Price per share, determined as provided above)
applicable to one share of Common Stock and the denominator shall be such
Current Market Price per share of the Common Stock, such reduction to become
effective immediately prior to the opening of business on the day following the
date fixed for the payment of such distribution; provided, however, that in the
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event the portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price per share of the
Common Stock on the record date mentioned above (excluding that portion of such
distribution that does not exceed 12.5% of the Current Market Price per share,
determined as provided above), in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of shares of Debentures shall have
the right to receive upon conversion the amount of cash such Holder would have
received had such Holder converted each share of the Debentures immediately
prior to the record date for the distribution of the cash (less that portion of
such distribution that does not exceed 12.5% of the Current Market Price per
share, determined as provided above). In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the conversion price which would then be in effect if such record
date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or any
portion of the Common Stock shall expire and such tender or exchange offer shall
involve the payment by the Company or such Subsidiary of consideration per share
of Common Stock having a fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and described in a
resolution of the Board of Directors) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds 110% of the Current Market Price per
share of the Common Stock on the trading day next succeeding the Expiration
Time, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the effectiveness of the Conversion Price reduction contemplated by this
subparagraph (e) by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time (including the Purchased Shares) (as defined below)
multiplied by the Current
107
Market Price per share of the Common Stock on the Trading Day next succeeding
the Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") (excluding that
portion of such consideration that does not exceed 110% of the Current Market
Price per share) and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the Current
Market Price per share of the Common Stock on the trading day next succeeding
the Expiration Time, such reduction to become effective immediately prior to the
opening of business on the day following the Expiration Time. In the event that
such tender or exchange offer is not so made, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
record date had not been fixed.
(f) If the distribution date for the Rights of the Company
provided in the Shareholders Rights Plan, as presently constituted or under any
similar plan occurs prior to the Conversion Date, and a Holder of the Debentures
who converts such Debentures after such distribution date is not entitled to
receive the Rights that would otherwise be attached (but for the date of
conversion) to the shares of Common Stock received upon such conversion, then an
adjustment shall be made to the Conversion Price pursuant to clause (ii) of
Section 13.4(a) as if the Rights were being distributed to the common
stockholders of the Company immediately prior to such conversion. If such an
adjustment is made and the Rights are later redeemed, invalidated or terminated,
then a corresponding reversing adjustment shall be made to the Conversion Price,
on an equitable basis, to take account of such event.
(g) The Company shall have the right to reduce from time to
time the Conversion Price by any amount selected by the Company for any period
of at least 30 days, provided, that Company shall give at least 15 days' notice
--------
of such reduction to the Trustee and the Property Trustee. The Company may, at
its option, make such reductions in the Conversion Price, in addition to those
set forth above in Section 13.4(a), as the Board of Directors deems advisable to
avoid or diminish any income
108
tax to holders of Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for income
tax purposes. No adjustment of the Conversion Price will be made upon the
issuance of any shares of Common Stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities of
the Company and the investment of additional optional amounts in shares of
Common Stock under any such plan, or the issuance of any shares of Common Stock
or options or rights to purchase such shares pursuant to any present or future
employee benefit plan or program of the Company or pursuant to any option,
warrant, right, or exercisable, exchangeable or convertible security which does
not constitute an issuance to all holders of Common Stock of rights or warrants
entitling holders of such rights or warrants to subscribe for or purchase Common
Stock at less than the Current Market Price. There shall also be no adjustment
of the Conversion Price in case of the issuance of any Common Stock (or
securities convertible into or exchangeable for Common Stock), except as
specifically described above.
(h) If any action would require adjustment of the Conversion
Price pursuant to more than one of the provisions described above, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value to the Holder of the Debentures.
SECTION 13.5. Fundamental Change. (a) In the event that the Company is
a party to any transaction (including, without limitation, a merger other than a
merger that does not result in a reclassification, conversion, exchange or
cancellation of Common Stock), consolidation, sale of all or substantially all
of the assets of the Company, recapitalization or reclassification of Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value or as a result of a subdivision or combination
of Common Stock) or any compulsory share exchange (each of the foregoing being
referred to as a "Transaction"), in each case, as a result of which shares of
Common Stock shall be converted into the right to receive, or shall be
exchanged for, (i) in the case of any Transaction other than a Transaction
involving a Common Stock Fundamental Change (and subject to funds being legally
available for such purpose under applicable law and the time of such
conversion), securities, cash or other property, each Debenture shall
thereafter be convertible into
109
the kind and, in the case of a Transaction which does not involve a Fundamental
Change, amount of securities, cash and other property receivable upon the
consummation of such Transaction by a holder of that number of shares of Common
Stock into which a Debenture was convertible immediately prior to such
Transaction, or (ii) in the case of a Transaction involving a Common Stock
Fundamental Change, common stock, each Debenture shall thereafter be convertible
(in the manner described herein) into common stock of the kind received by
holders of Common Stock (but in each case after giving effect to any adjustment
discussed in paragraphs (b) and (c) relating to a Fundamental Change if such
Transaction constitutes a Fundamental Change). The holders of Debentures or
Preferred Securities will have no voting rights with respect to any Transaction
described in this section.
(b) If any Fundamental Change occurs, then the Conversion
Price in effect will be adjusted immediately after such Fundamental Change as
described in paragraph (c) below. In addition, in the event of a Common Stock
Fundamental Change, each Debenture shall be convertible solely into common stock
of the kind received by holders of Common Stock as a result of such Common Stock
Fundamental Change.
(c) The Conversion Price in the case of any Transaction
involving a Fundamental Change will be adjusted immediately after such
Fundamental Change:
(1) in the case of a Non-Stock Fundamental Change,
the Conversion Price of the Debentures will thereupon become
the lower of (A) the Conversion Price in effect immediately
prior to such Non-Stock Fundamental Change, but after giving
effect to any other prior adjustments, and (B) the result
obtained by multiplying the greater of the Applicable Price or
the then applicable Reference Market Price by a fraction of
which the numerator will be $50 and the denominator will be
(x) the amount of the redemption price for the Debenture if
the redemption date were the date of such Non-Stock
Fundamental Change (or, for the period commencing on the first
date of original issuance of the Debentures and through
December 1, 1997, and the twelve-month periods commencing
December 2, 1997 and December 2, 1998, the product of
106.75, 106.075 and 105.400, respectively,
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multiplied by $50) plus (y) any then-accrued and unpaid
interest on the Debentures; and
(2) in the case of a Common Stock Fundamental Change,
the Conversion Price of the Debentures in effect immediately
prior to such Common Stock Fundamental Change, but after
giving effect to any other prior adjustments, will thereupon
be adjusted by multiplying such Conversion Price by a fraction
of which the numerator will be the Purchaser Stock Price and
the denominator will be the Applicable Price; provided,
however, that in the event of a Common Stock Fundamental
Change in which (A) 100% of the value of the consideration
received by a holder of Common Stock is common stock of the
successor, acquiror, or other third party (and cash, if any,
is paid only with respect to any fractional interests in such
common stock resulting from such Common Stock Fundamental
Change) and (B) all of the Common Stock will have been
exchanged for, converted into, or acquired for common stock
(and cash with respect to fractional interests) of the
successor, acquiror, or other third party, the Conversion
Price of the Debentures in effect immediately prior to such
Common Stock Fundamental Change will thereupon be adjusted by
multiplying such Conversion Price by a fraction of which the
numerator will be one and the denominator will be the number
of shares of common stock of the successor, acquiror, or other
third party received by a holder of one share of Common Stock
as a result of such Common Stock Fundamental Change.
SECTION 13.6. Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price
and shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted conversion price and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Trustee, the Conversion Agent and
the transfer agent for the Preferred Securities and the Debentures; and
111
(b) a notice stating the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of Preferred Securities and the
Debentures at their last addresses as they appear upon the stock transfer books
of the Company and the Trust and the Securities Registrar.
SECTION 13.7. Prior Notice of Certain Events.
In case:
(i) the Company shall (A) declare any dividend (or
any other distribution) on its Common Stock, other than (x) a dividend
payable in shares of Common Stock or (y) a dividend payable in cash
that would not require an adjustment pursuant to Section 13.4(c) or
(d) or (B) authorize a tender or exchange offer that would require an
adjustment pursuant to Section 13.4(e);
(ii) the Company shall authorize the granting to all
holders of Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or series or of any other
rights or warrants;
(iii) of any reclassification of Common Stock (other
than a subdivision or combination of the outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of stockholders of the
Company shall be required, or of the sale or transfer of all or
substantially all of the assets of the Company or of any compulsory
share exchange whereby the Common Stock is converted into other
securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall (A) if any Preferred Securities are outstanding under the
Trust Agreement, cause to be filed with the transfer agent for the Preferred
Securities, and shall cause to be mailed to the holders of record of the
Preferred Securities, at their last addresses as they shall appear upon the
stock transfer books of the Trust or (B) shall cause to be mailed to all
112
Holders at their last addresses as they shall appear in the Security Register,
at least 15 days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record (if any) is to be
taken for the purpose of such dividend, distribution, rights or warrants or, if
a record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, share exchange, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
SECTION 13.8. Dividend or Interest Reinvestment Plans. Notwithstanding
anything to the contrary in this Article 13, the issuance of any shares of
Common Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under any such plan, and the issuance
of any shares of Common Stock or options or rights to purchase such shares
pursuant to any employee benefit plan or program of the Company or pursuant to
any option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the date the Debentures were first issued, shall not be deemed
to constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the Conversion
Price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article 13.
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SECTION 13.9. Certain Additional Rights.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on its Common Stock referred to in Section 13.4(c) or 13.4(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 13.4(c)), the Holders of the Debentures, upon the
conversion thereof subsequent to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution and prior to
the effectiveness of the Conversion Price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which the Debentures are converted, the portion of the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash and assets so distributed applicable to one share of Common Stock;
provided, however, that, at the election of the Company (whose election shall be
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evidenced by a resolution of the Board of Directors) with respect to all Holders
so converting, the Company may, in lieu of distributing to such Holder any
portion of such distribution not consisting of cash or securities of the
Company, pay such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Debentures described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of Debentures so converted is entitled
to receive in accordance with the immediately preceding sentence, the Company
may elect (such election to be evidenced by a resolution of the Board of
Directors) to distribute to such Holder a due xxxx for the shares of Common
Stock, rights, warrants, evidences of indebtedness, shares of capital stock,
cash or assets to which such Holder is so entitled, provided, that such due xxxx
(i) meets any applicable requirements of the principal national securities
exchange or other market on which the Common Stock is then traded and
(ii) requires payment or delivery of such shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets no
later than the date of payment or delivery thereof to holders of shares of
Common Stock receiving such distribution.
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SECTION 13.10. Restrictions on Common Stock Issuable Upon Conversion.
(a) Shares of Common Stock to be issued upon conversion of a
Debenture in respect of Restricted Preferred Securities shall bear such
restrictive legends as the Company may provide in accordance with applicable
law.
(b) If shares of Common Stock to be issued upon conversion of
a Debenture in respect of Restricted Preferred Securities are to be registered
in a name other than that of the Holder of such Preferred Security, then the
Person in whose name such shares of Common Stock are to be registered must
deliver to the Conversion Agent a certificate satisfactory to the Company and
signed by such Person, as to compliance with the restrictions on transfer
applicable to such Preferred Security. Neither the Trustee nor any Conversion
Agent or Registrar shall be required to register in a name other than that of
the Holder shares of Common Stock issued upon conversion of any such Debenture
in respect of such Preferred Securities not so accompanied by a properly
completed certificate.
SECTION 13.11. Trustee Not Responsible for Determining Conversion
Price or Adjustments.
Neither the Trustee nor any Conversion Agent shall at any time be under
any duty or responsibility to any Holder of any Debenture or to any holder of a
Preferred Security to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making the same.
Neither the Trustee nor any Conversion Agent shall be accountable with respect
to the validity or value (or the kind of account) of any shares of Common Stock
or of any securities or property, which may at any time be issued or delivered
upon the conversion of any Debenture; and neither the Trustee nor any Conversion
Agent makes any representation with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of Common Stock or
stock certificates or other securities or property upon the surrender of any
Debenture for the purpose of conversion, or, except as expressly herein
provided, to comply with any of the cove-
115
nants of the Company contained in Article 10 or this Article 13.
* * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
HOST MARRIOTT CORPORATION
By:
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IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee
By:
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117
