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EXHIBIT 4.2
EXECUTION COPY
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Amended and Restated Declaration of Trust
of Coltec Capital Trust
among
Coltec Industries Inc
(as Sponsor),
THE BANK OF NEW YORK
(as Property Trustee),
THE BANK OF NEW YORK (DELAWARE)
(as Delaware Trustee)
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of April 14, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I Interpretation and Definitions
SECTION 1.01. Definitions...............................................................................1
ARTICLE II Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application.........................................................11
SECTION 2.02. Lists of Holders of Securities...........................................................12
SECTION 2.03. Reports by the Property Trustee..........................................................12
SECTION 2.04. Periodic Reports to Property Trustee.....................................................12
SECTION 2.05. Evidence of Compliance with Conditions
Precedent................................................................................13
SECTION 2.06. Events of Default; Waiver................................................................13
SECTION 2.07. Event of Default; Notice.................................................................15
ARTICLE III Organization
SECTION 3.01. Name.....................................................................................16
SECTION 3.02. Office...................................................................................16
SECTION 3.03. Purpose..................................................................................16
SECTION 3.04. Authority................................................................................16
SECTION 3.05. Title to Property of the Trust...........................................................16
SECTION 3.06. Powers and Duties of the Administrative
Trustees.................................................................................17
SECTION 3.07. Prohibition of Actions by the Trust and
the Trustees.............................................................................20
SECTION 3.08. Powers and Duties of the Property
Trustee..................................................................................21
SECTION 3.09. Certain Duties and Responsibilities of
the Property Trustee.....................................................................23
SECTION 3.10. Certain Rights of Property Trustee.......................................................25
SECTION 3.11. Delaware Trustee.........................................................................28
SECTION 3.12. Execution of Documents...................................................................28
SECTION 3.13. Not Responsible for Recitals or Issuance
of Securities............................................................................28
SECTION 3.14. Duration of Trust........................................................................29
SECTION 3.15. Mergers..................................................................................29
ARTICLE IV Sponsor
SECTION 4.01. Sponsor's Purchase of Common Securities..................................................31
SECTION 4.02. Responsibilities of the Sponsor..........................................................31
SECTION 4.03. Guarantee of Payment of Trust
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Obligations..............................................................................32
ARTICLE V Trustees
SECTION 5.01. Number of Trustees.......................................................................32
SECTION 5.02. Delaware Trustee.........................................................................33
SECTION 5.03. Property Trustee; Eligibility............................................................33
SECTION 5.04. Qualifications of Administrative
Trustees and Delaware Trustee Generally..................................................34
SECTION 5.05. Initial Trustees.........................................................................34
SECTION 5.06. Appointment, Removal and Resignation of
Trustees.................................................................................35
SECTION 5.07. Vacancies Among Trustees.................................................................38
SECTION 5.08. Effect of Vacancies......................................................................39
SECTION 5.09. Meetings.................................................................................39
SECTION 5.10. Delegation of Power......................................................................39
SECTION 5.11. Merger, Conversion, Consolidation or
Succession to Business...................................................................40
ARTICLE VI Distributions
SECTION 6.01. Distributions............................................................................40
ARTICLE VII Issuance of Securities
SECTION 7.01. General Provisions Regarding Securities..................................................41
SECTION 7.02. Execution and Authentication.............................................................41
SECTION 7.03. Form and Dating..........................................................................42
SECTION 7.04. Registrar, Paying Agent and Conversion
Agent....................................................................................45
SECTION 7.05. Paying Agent to Hold Money in Trust......................................................46
SECTION 7.06. Replacement Securities...................................................................47
SECTION 7.07. Outstanding Preferred Securities.........................................................47
SECTION 7.08. Preferred Securities in Treasury.........................................................48
SECTION 7.09. Temporary Securities.....................................................................48
SECTION 7.10. Cancelation..............................................................................49
ARTICLE VIII Dissolution of Trust
SECTION 8.01. Dissolution of Trust.....................................................................49
ARTICLE IX Transfer and Exchange
SECTION 9.01. General..................................................................................50
SECTION 9.02. Transfer Procedures and Restrictions.....................................................52
SECTION 9.03. Deemed Security Holders..................................................................58
SECTION 9.04. Notices to Clearing Agency...............................................................58
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SECTION 9.05. Appointment of Successor Clearing
Agency...................................................................................58
ARTICLE X Limitation of Liability of Holders of Securities, Trustees or Others
SECTION 10.01. Liability...............................................................................59
SECTION 10.02. Exculpation.............................................................................59
SECTION 10.03. Fiduciary Duty..........................................................................60
SECTION 10.04. Indemnification.........................................................................61
SECTION 10.05. Outside Businesses......................................................................61
ARTICLE XI Accounting
SECTION 11.01. Fiscal Year.............................................................................62
SECTION 11.02. Certain Accounting Matters..............................................................62
SECTION 11.03. Banking.................................................................................63
SECTION 11.04. Withholding.............................................................................63
ARTICLE XII Amendments and Meetings
SECTION 12.01. Amendments..............................................................................64
SECTION 12.02. Meetings of the Holders of Securities;
Action by Written Consent...............................................................65
ARTICLE XIII Representations of Property Trustee and Delaware Trustee
SECTION 13.01. Representations and Warranties of
Property Trustee........................................................................67
SECTION 13.02. Representations and Warranties of
Delaware Trustee........................................................................68
ARTICLE XIV Registration Rights
SECTION 14.01. Registration Rights.....................................................................69
ARTICLE XV Miscellaneous
SECTION 15.01. Notices.................................................................................69
SECTION 15.02. Governing Law...........................................................................70
SECTION 15.03. Intention of the Parties................................................................71
SECTION 15.04. Headings................................................................................71
SECTION 15.05. Successors and Assigns..................................................................71
SECTION 15.06. Partial Enforceability..................................................................72
SECTION 15.07. Counterparts............................................................................72
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Coltec Capital Trust
Certain Sections of this Trust Agreement relating to Sections 310
through 318 of the Trust Indenture Act of 1939.
Trust Indenture Act Section Trust Agreement Section
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Sec. 310(a)(1)........................................................................................7.07
(a)(2).......................................................................................7.07
(a)(3).......................................................................................7.09
(a)(4)................................................................................2.07(a)(ii)
(b)..........................................................................................7.08
Sec. 311(a)...........................................................................................7.13
(b)..........................................................................................7.13
Sec. 312(a)...........................................................................................5.07
(b)..........................................................................................5.07
(c)..........................................................................................5.07
Sec. 313(a)...........................................................................................7.14
(b)..........................................................................................7.14
(c)..........................................................................................7.14
(d)..........................................................................................7.14
Sec. 314(a)...........................................................................................7.15
(b)................................................................................Not Applicable
(c)(1).................................................................................7.16, 7.17
(c)(2).................................................................................7.16, 7.17
(c)(3).............................................................................Not Applicable
(d)................................................................................Not Applicable
(e)..........................................................................................7.17
Sec. 315(a)...............................................................................7.01(a), 7.03(a)
(b)...................................................................................7.02, 10.08
(c).......................................................................................7.01(a)
(d)....................................................................................7.01, 7.03
(e)................................................................................Not Applicable
Sec. 316(a).................................................................................Not Applicable
(a)(1)(A)..........................................................................Not Applicable
(a)(1)(B)..........................................................................Not Applicable
(a)(2).............................................................................Not Applicable
(b)................................................................................Not Applicable
(c)................................................................................Not Applicable
Sec. 317(a)(1)..............................................................................Not Applicable
(a)(2).............................................................................Not Applicable
(b)..........................................................................................5.09
Sec. 318(a)..........................................................................................10.10
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Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
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AMENDED AND RESTATED DECLARATION
OF TRUST ("Declaration") dated and effective
as of April 14, 1998, by the undersigned
trustees (together with all other Persons
from time to time duly appointed and serving
as trustees in accordance with the
provisions of this Declaration, the
"Trustees"), COLTEC INDUSTRIES INC, a
Pennsylvania corporation, as trust sponsor
(the "Sponsor"), and by the holders, from
time to time, of undivided beneficial
interests in the Trust (as defined below)
issued pursuant to this Declaration;
WHEREAS the Trustees and the Sponsor established Coltec
Capital Trust (the "Trust") under the Business Trust Act (as hereinafter
defined) pursuant to a Declaration of Trust dated as of April 8, 1998 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on April 14, 1998, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust and investing the proceeds thereof in
certain Debentures of the Debenture Issuer (as hereinafter defined); and
WHEREAS all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
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ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions. Unless the context otherwise
requires:
(a) capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in
this Declaration, and any capitalized term not defined in this
Declaration shall have the meaning assigned thereto in the Indenture;
(b) a term defined anywhere in this Declaration or the
Indenture has the same meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles, Sections,
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Administrative Action" has the meaning set forth in the
definition of "Tax Event".
"Administrative Trustee" means any Trustee other than the
Property Trustee and the Delaware Trustee.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when
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used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Appointment Event" means an event defined in the terms of the
Preferred Securities, as set forth in Annex I, which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a Special
Trustee.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Beneficiaries" has the meaning set forth in Section 4.03(a).
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depositary as described in Section 9.04.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in New York, New York are
authorized or required by law or executive order to close or a day on which the
corporate trust office of the Property Trustee or the Debenture Trustee is
closed for business.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time.
"Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"Closing Date" means the First Closing Date as defined in the
Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section
7.01(a).
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Event of Default" means an Event of Default (as
defined in the Indenture) that has occurred and is continuing in respect of the
Debentures.
"Debenture Issuer" means the Sponsor in its capacity as issuer
of the Debentures.
"Debenture Trustee" means The Bank of New York, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer under the Indenture to be held by the Property Trustee, a
specimen certificate for such series of Debentures being attached to the
Indenture as Exhibit A.
"Deferral Period" has the meaning set forth in the Indenture.
"Definitive Preferred Securities" means the Regulation S
Definitive Preferred Securities, the IAI Definitive Preferred Securities and any
other Preferred Securities in definitive form issued by the Trust.
"Delaware Trustee" has the meaning set forth in Section 5.02.
"Depositary" means The Depository Trust Company, the initial
clearing agency.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.01.
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"Event of Default" means (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):
(i) a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period
of 30 days (subject to the deferral of any due date in the case of a
Deferral Period); or
(iii) default by the Trust in the payment of any Redemption Price of
any Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in the Declaration (other than
a covenant or warranty, a default in the performance of which or the
breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the
defaulting Issuer Trustee or Issuer Trustees by the holders of at least
25% in aggregate liquidation amount of the outstanding Preferred
Securities, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" under the Declaration; or
(v) the failure of the Sponsor to appoint a successor Property Trustee
in the manner required by Section 5.06(c).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Global Preferred Securities" means Rule 144A Global Preferred
Securities and/or Unrestricted Global Preferred Securities, as the context
requires.
"Guarantee" means the guarantee agreement to be dated as of
April 14, 1998, of the sponsor in respect of the Securities.
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"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate
of any Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of April 14, 1998,
between the Debenture Issuer and The Bank of New York, as trustee, and any
indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"IAI Definitive Preferred Security" has the meaning as set
forth in 7.03(c).
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.06(g).
"Like Amount" means (i) with respect to a redemption of
Preferred Securities having an aggregate liquidation amount equal to that
portion of the principal amount of Debentures to be contemporaneously redeemed
in accordance with the Indenture, allocated to the Common Securities and to the
Preferred Securities based upon the relative liquidation amounts of such classes
and the proceeds of which will be used to pay the applicable Redemption Price of
the Preferred Securities and (ii) with respect to a distribution of Debentures
to holders of Preferred Securities in connection with a dissolution or
liquidation of the Trust, Debentures having a principal amount equal to the
aggregate liquidation amount of the Securities of the Holder to whom such
Debentures are distributed.
"List of Holders" has the meaning set forth in Section
2.02(a).
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"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities and by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Ministerial Action" has the meaning set forth in the terms of
the Securities as set forth in Annex I.
"Obligations" means any costs, expenses or liabilities of the
Trust, other than obligations of the Trust to pay to Holders of any Securities
or other similar interests in the Trust the amounts due such Holders pursuant to
the terms of the Securities or such other similar interests, as the case may be.
"Offering Circular" means the confidential offering circular,
dated as of April 8, 1998, relating to the issuance by the Trust of Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
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(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Participants" has the meaning set forth in Section 7.03(b).
"Paying Agent" has the meaning specified in Section 3.08(h).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in Section
7.01(a).
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Participant or
as an indirect participant, in each case in accordance with the rules of such
Depositary).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.
"Property Trustee Account" has the meaning set forth in
Section 3.08(c).
"Purchase Agreement" has the meaning set forth in Section
7.03(a).
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Redemption Price" has the meaning set forth in Annex I.
"Registration Default" has the meaning set forth in Section
14.01.
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"Registration Rights Agreement" means the Registration Rights
Agreement, dated April 14, 1998, among the Sponsor, the Trust, and the Initial
Purchasers named in the Purchase Agreement.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under, or with respect to, the documentation governing any
Debt.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any vice-president, any assistant vice-president, the treasurer, any
assistant treasurer, any trust officer or assistant trust officer or any other
officer in the Corporate Trust Department of the Property Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Restricted Preferred Securities" shall include the IAI
Definitive Preferred Securities and the Rule 144A Global Preferred Securities.
"Restricted Securities Legend" has the meaning specified in
Section 9.02(j).
"Rule 144A Global Preferred Security" has the meaning
specified in Section 7.03(a).
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the
Rule 144A Global Preferred Security and any other Preferred Security in global
form.
"Securities Guarantees" means the Preferred Securities
Guarantee and the Common Securities Guarantee.
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"66-2/3% in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities and by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class or, as the context may require, Holders of Preferred Securities or
Holder(s) of outstanding Common Securities voting separately as a class,
representing at least 66-2/3% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions, to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Special Trustee" means a Administrative Trustee appointed by
the Holders of a Majority in liquidation amount of the Preferred Securities in
accordance with Section 5.06(a)(ii)(B).
"Sponsor" means Coltec Industries Inc, a Pennsylvania
corporation, or any successor entity in a merger, consolidation or amalgamation,
in its capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section
2.06(a)(ii).
"Tax Event" means the Property Trustee shall have received an
opinion of nationally recognized independent tax counsel to the Sponsor
(reasonably acceptable to the Trustees) experienced in such matters to the
effect that, as a result of (i) any amendment to or change (including any
announced prospective change (which shall not include a proposed change),
provided that a Tax Event shall not occur more than 90 days before the effective
date of any such prospective change) in the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof or
therein, (ii) any judicial decision or official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (iii) any amendment to or change in the
administrative position or interpretation of any Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental agency or regulatory
body, irrespective of the manner in which such amendment or change is made
known, which amendment or change is effective
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or such Administrative Action or decision is announced, in each case, on or
after the date of original issuance of the Debentures or the issue date of the
Preferred Securities issued by the Trust, there is more than an insubstantial
risk that (a) if the Debentures are held by the Property Trustee, (x) the Trust
is, or will be within 90 days of the date of such opinion, subject to United
States Federal income tax with respect to interest accrued or received on the
Debentures or subject to more than a de minimis amount of other taxes, duties or
other governmental charges as determined by such counsel, or (y) interest
payable by the Sponsor to the Trust on the Debentures is not, or within 90 days
of the date of such opinion will not be, deductible by the Sponsor in whole or
in part for United States Federal income tax purposes or (b) with respect to
Debentures which are no longer held by the Property Trustee, interest payable by
the Sponsor on the Debentures is not, or within 90 days of the date of such
opinion will not be, deductible by the Sponsor in whole or in part for United
States Federal income tax purposes.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10% of
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee
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or the Trustees shall refer to such Person or Persons solely in their capacity
as trustees hereunder.
"Unrestricted Definitive Preferred Security" has the meaning
set forth in Section 9.02(c).
"Unrestricted Global Security" has the meaning set forth in
Section 9.02(b).
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
Declaration is subject to the provisions of the Trust Indenture Act that are
required to be part of this Declaration, which are incorporated by reference in
and made part of this Declaration and shall, to the extent applicable, be
governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.02. Lists of Holders of Securities. (a) Each of the
Sponsor and the Administrative Trustees on behalf of the Trust shall provide the
Property Trustee (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders of the Securities ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Property Trustee by the Sponsor and the
Administrative Trustees on behalf of the Trust, and (ii) at
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any other time, within 30 days of receipt by the Trust of a written request for
a List of Holders as of a date no more than 14 days before such List of Holders
is given to the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in its capacity as Paying Agent (if
acting in such capacity) provided that the Property Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. Within 60 days
after May 15 of each year, commencing May 15, 1999 the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Property Trustee. Each of
the Sponsor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such documents, reports and information as required by
Section 314 of the Trust Indenture Act (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
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SECTION 2.06. Events of Default; Waiver. (a) The Holders of a
Majority in liquidation amount of Preferred Securities may, by vote, on behalf
of the Holders of all of the Preferred Securities, waive any past Event of
Default in respect of the Preferred Securities and its consequences, provided
that, if the Event of Default:
(i) is caused by a Debenture Event of Default that is not waivable
under the Indenture, the Event of Default under the Declaration shall
also not be waivable;
(ii) is caused by a Debenture Event of Default that requires the
consent or vote of greater than a majority in principal amount of the
holders of the Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
(iii) is the result of a default by the Trust in the payment of any
Distribution when it becomes due and payable, which default has
continued for 30 days (subject to the deferral of any due date in the
case of a Default Period), the Event of Default shall not be waivable;
or
(iv) is the result of a default by the Trust in the payment of any
Redemption Price of any Preferred Security when it becomes due and
payable, the Event of Default shall not be waivable.
Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Preferred Securities arising therefrom
shall be deemed to have been cured, for every purpose of this Declaration, but
no such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any right consequent
thereon. Any waiver by the Holders of the Preferred Securities of an Event of
Default with respect to the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of any such Event of
Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
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(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the Event of Default is
caused by a Debenture Event of Default that:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.06(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Declaration as provided
below in this Section 2(b), the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the
proportion in liquidation amount of the Preferred Securities that the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until the effects of all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. Subject to the foregoing provisions
of this Section 2.06(b), upon such waiver, any such default shall cease to exist
and any Event of Default with respect to the Common Securities arising therefrom
shall be deemed to have been cured for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or Event of Default
with respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities,
constitutes a waiver of
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the corresponding Event of Default under this Declaration. The foregoing
provisions of this Section 2.06(c) shall be in lieu of Section 316(a)(1)(B) of
the Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act
is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
SECTION 2.07. Event of Default; Notice. (a) The Property
Trustee shall, within three Business Days after the occurrence of an Event of
Default actually known to the Property Trustee, (i) transmit by mail, first
class postage prepaid, to the Holders of the Securities, and (ii) transmit by
any means provided for in this Declaration to the Administrative Trustees and
the Sponsor, notices of all defaults actually known to a Responsible Officer of
the Property Trustee, unless such defaults have been cured or waived before the
giving of such notice (the term "defaults" for the purposes of this Section
2.07(a) being hereby defined to be an Event of Default, not including any
periods of grace and irrespective of the giving of any notice); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.01(1) and 5.01(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice.
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ARTICLE III
Organization
SECTION 3.01. Name. The Trust is named "Coltec Capital Trust,"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Securities. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Administrative Trustees.
SECTION 3.02. Office. The address of the principal office of
the Trust is c/o Coltec Industries Inc, 3 Coliseum Center, 2550 West Tyvola
Road, Charlotte, North Carolina 28217, Attention: Chief Financial Officer. On
ten Business Days' written notice to the Holders of Securities, the
Administrative Trustees may designate another principal office.
SECTION 3.03. Purpose. The exclusive purposes and functions of
the Trust are (a) to issue and sell Securities and use the proceeds from such
sale to acquire the Debentures, and (b) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States Federal income tax purposes as a grantor trust.
SECTION 3.04. Authority. Subject to the limitations provided
in this Declaration and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Property Trustee in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no person shall be required to inquire
into the authority of the Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
SECTION 3.05. Title to Property of the Trust. Except as
provided in Section 3.08 with respect to the Debentures and the Property Trustee
Account or as otherwise
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provided in this Declaration, legal title to all assets of the Trust shall be
vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in the
assets of the Trust.
SECTION 3.06. Powers and Duties of the Administrative
Trustees. The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be no
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to simultaneous issuances of both Preferred Securities and
Common Securities on the Closing Date and any Optional Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities to:
(i) assist in the preparation of an offering circular (the "Offering
Circular") in preliminary and final form prepared by the Sponsor, in
relation to the offering and sale of Preferred Securities to qualified
institutional buyers in reliance on Rule 144A under the Securities Act
and a limited number of institutional "accredited investors", as such
term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act and to execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement prepared by the
Sponsor, including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Preferred Securities in any
State or foreign jurisdiction in which the Sponsor has determined to
qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
Portal(SM) Market ("PORTAL"), a subsidiary of The Nasdaq Stock Market,
Inc. and, at such time as determined by the Sponsor, to the New York
Stock Exchange
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or any other national stock exchange or the Nasdaq National Market for
listing or quotation of the Preferred Securities;
(iv) to execute and deliver letters, documents, or instruments with The
Depository Trust Company relating the Preferred Securities;
(v) execute and file with the Commission, at such time as determined by
the Sponsor, a registration statement on Form 8-A, including any
amendments thereto, prepared by the Sponsor relating to the
registration of the Preferred Securities under Section 12 of the
Exchange Act; and
(vi) execute and enter into the Registration Rights Agreement, the
Purchase Agreement and other related agreements providing for the sale
of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders or Common Securities;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Tax Event; provided that the
Administrative Trustees shall consult with the Sponsor and the Property Trustee
before taking or refraining from taking any Ministerial Action in relation to a
Tax Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of the Securities;
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(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.08(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of
the Trust Indenture Act to the Property Trustee, which certificate may be
executed by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar
and transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election (i)
to defer payments of interest on the Debentures by extending the interest
payment period under the Indenture or (ii) to extend the scheduled maturity date
on the Debentures;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the laws
of the State of Delaware and of each other jurisdiction in which such existence
is necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
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(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.06, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
provided that such action does not materially adversely affect the interests of
Holders; and
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust.
The Administrative Trustees must exercise the powers set forth
in this Section 3.06 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.03, and the Administrative Trustees
shall not take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.03.
Subject to this Section 3.06, the Administrative Trustees
shall have none of the powers or the authority of the Property Trustee set forth
in Section 3.08.
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SECTION 3.07. Prohibition of Actions by the Trust and the
Trustees. (a) The Trust shall not, and the Trustees (including the Property
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in the Declaration or Annex I hereto, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures,
(B) waive any past default that is waivable under Section 5.13 of the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of counsel to the effect that
such modification will not cause more than an insubstantial risk that
for United States federal income tax purposes the Trust will not be
classified as a grantor trust.
SECTION 3.08. Powers and Duties of the Property Trustee. (a)
The legal title to the Debentures shall be owned by and held of record in the
name of the Property
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Trustee in trust for the benefit of the Holders of the Securities. The right,
title and interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 5.06. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Debentures
have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in
respect of the Debentures held by the Property Trustee, deposit such
funds into the Property Trustee Account and make payments to the
Holders of the Preferred Securities and Holders of the Common
Securities from the Property Trustee Account in accordance with Section
6.01. Funds in the Property Trustee Account shall be held uninvested
until disbursed in accordance with this Declaration.
(ii) engage in such ministerial activities as so directed and as shall
be necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the Administrative
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as so directed as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Securities) arising from a change in law or
a change in legal interpretation or other specified circumstances
pursuant to the terms of the Securities.
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(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.06.
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of such Securities.
(h) The Property Trustee will act as Paying Agent and
Registrar in New York (each, a "Paying Agent") to pay Distributions, redemption
payments or liquidation payments on behalf of the Trust with respect to all
securities and any such Paying Agent shall comply with Section 317(b) of the
Trust Indenture Act. Any Paying Agent may be removed by the Property Trustee at
any time and a successor Paying Agent or additional Paying Agents may be
appointed at any time by the Property Trustee.
(i) Subject to this Section 3.08, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.06.
The Property Trustee must exercise the powers set forth in
this Section 3.08 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.03, and the Property Trustee shall not take
any
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action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.03.
SECTION 3.09. Certain Duties and Responsibilities of the
Property Trustee. (a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.06), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee
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shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Declaration
(but need not confirm or investigate the accuracy of any
mathematical calculations or other facts stated therein);
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers;
(v) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Debentures and the Property
Trustee Account shall be to deal with such property in a similar manner
as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Sponsor
in writing. Money held by the Property Trustee need not be segregated
from other
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funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.08(c)(i) and
except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Sponsor.
SECTION 3.10. Certain Rights of Property Trustee. (a) Subject
to the provisions of Section 3.09:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the Administrative
Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or
any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice or
other experts and the advice or opinion of such
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counsel and experts with respect to legal matters or advice within the
scope of such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request
or direction of any Holder, unless such Holder shall have provided to
the Property Trustee adequate security and indemnity, which would
satisfy a reasonable person in the position of the Property Trustee,
against the costs, expenses (including its attorneys' fees and
expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as
may be requested in writing by the Property Trustee; provided, that
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve
the Property Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, security, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company and
shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Property Trustee shall not be
responsible for any
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misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the
same proportion in liquidation amount of the Securities as would be
entitled to direct the Property Trustee under the terms of the
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in acting
in accordance with such instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
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permissive power or authority available to the Property Trustee shall be
construed to be a duty.
SECTION 3.11. Delaware Trustee. Notwithstanding any other
provision of this Declaration other than Section 5.02, the Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of the Administrative Trustees or
the Property Trustee described in this Declaration. Except as set forth in
Section 5.02, the Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Business Trust
Act.
SECTION 3.12. Execution of Documents. Except as otherwise
required by the Business Trust Act, any Administrative Trustee is authorized to
execute on behalf of the Trust any documents that the Administrative Trustees
have the power and authority to execute pursuant to Section 3.06; provided that,
the registration statement referred to in Section 3.06(b)(i), including any
amendments thereto, shall be signed by all of the Administrative Trustees.
SECTION 3.13. Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. Duration of Trust. The Trust, unless dissolved
pursuant to the provisions of Article VIII hereof, shall exist until April 15,
2028.
SECTION 3.15. Mergers. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to, any Person, except as
described in Section 3.15(b) and (c) of this Declaration or paragraph 3 of Annex
I.
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(b) The Trust may, at the request of the Sponsor, with the
consent of a majority of the Administrative Trustees and without the consent of
the Holders of the Securities, the Delaware Trustee or the Property Trustee,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets substantially as an entirety to, a
trust organized as such under the laws of any State; provided that:
(i) if the Trust is not the surviving entity, the successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Preferred
Securities (the "Successor Securities") as long as the
Successor Securities rank, with respect to participation in
the profits and distributions or in the assets of the
Successor Entity at least as high as the Preferred Securities
rank with respect to participation in the profits and
dividends or in the assets of the Trust;
(ii) the Sponsor expressly appoints a trustee of such Successor Entity
possessing the same powers and duties as the Property Trustee as the
Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are listed
or traded, or any Successor Securities will be listed or traded upon
notification of issuance, on any national securities exchange, national
automated quotation system or with any other organization on which the
Preferred Securities are then listed or traded, if any;
(iv) such merger, consolidation, amalgamation or replacement,
conveyance, transfer or lease does not cause the Preferred Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, conveyance, transfer or
lease or replacement does not adversely affect the powers, preferences
and other special rights
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of the Holders of the Preferred Securities (including any Successor
Securities) in any material respect;
(vi) such Successor Entity has a purpose substantially identical and
limited to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or replacement,
conveyance, transfer or lease, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust experienced in
such matters to the effect that:
(A) following such merger, consolidation,
amalgamation or replacement, conveyance, transfer or lease,
neither the Trust nor the Successor Entity will be required to
register as an Investment Company; and
(B) such merger, consolidation, amalgamation or
replacement conveyance, transfer or lease, will not adversely
affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any
material respect; and
(viii) the Sponsor or any permitted successor or assignee owns all of
the Common Securities of such Successor Entity and provides a guarantee
to the Holders of the Successor Securities with respect to the
Successor Entity having substantially the same terms as the Preferred
Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in aggregate liquidation amount of
the Securities, consolidate, amalgamate, merge with or into, or be replaced by
or convey, transfer or lease its properties and assets substantially as an
entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or Successor Entity to be classified as an association taxable as a
corporation or to substantially increase the likelihood that the Trust or
Successor Entity would be classified as other than a grantor trust for United
States federal income tax purposes.
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ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Common Securities. On the
Closing Date the Sponsor will purchase an amount of Common Securities issued by
the Trust such that the aggregate liquidation amount of such Common Securities
purchased by the Sponsor shall at such date equal to at least 3% of the total
capital of the Trust.
SECTION 4.02. Responsibilities of the Sponsor. In connection
with the issue and sale of the Preferred Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:
(a) to prepare the Offering Circular and to prepare for filing
by the Trust with the Commission the Registration Statement, including any
amendments thereto;
(b) to determine the States and foreign jurisdictions in which
to take appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and filed by the
Trust, as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to
PORTAL and to the New York Stock Exchange or any other national stock exchange
or the Nasdaq National Market for listing or quotation of the Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12 of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of and execute and deliver the
Purchase Agreement, and to negotiate the terms of Registration Rights Agreement
and other related agreements providing for the sale of the Preferred Securities.
SECTION 4.03. Guarantee of Payment of Trust Obligations. (a)
Subject to the terms and conditions of this Section 4.03, the Sponsor hereby
irrevocably and unconditionally guarantees to each Person to whom the Trust is
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now or hereafter becomes indebted or liable (the "Beneficiaries") the full
payment, when and as due, of any and all Obligations to such Beneficiaries.
(b) The agreement of the Sponsor in Section 4.03(a) is
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.
(c) The agreement of the Sponsor set forth in Section 4.03(a)
shall terminate and be of no further force and effect upon the later of (a) the
date on which full payment has been made of all amounts payable to all Holders
of all the Preferred Securities (whether upon redemption, liquidation, exchange
or otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any Holder of Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Preferred Securities
Guarantee or under this Agreement for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees. The number of Trustees shall
initially be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities:
(i) and except as provided in Sections 5.01(b)(ii)
and 5.06(a)(ii)(B) with respect to the Special Trustee, the
number of Trustees may be increased or decreased by vote of
the Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders of
the Common Securities; and
(ii) the number of Trustees shall be increased
automatically by one (1) if an Appointment Event
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has occurred and is continuing and the Holders of a Majority in
liquidation amount of the Preferred Securities appoint a Special
Trustee in accordance with Section 5.06(a)(ii),
provided that, if the Property Trustee does not also act as Delaware Trustee,
the number of Trustees shall be at least five (5).
SECTION 5.02. Delaware Trustee. If required by the Business
Trust Act, one Trustee (the "Delaware Trustee") shall be an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided that, if the Property Trustee has its
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall also be the
Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.03. Property Trustee; Eligibility. (a) There shall
at all times be one Trustee which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then for the purposes of this Section 5.03(a)(ii),
the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.03(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.06(d).
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(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.04. Qualifications of Administrative Trustees and
Delaware Trustee Generally. Each Administrative Trustee and the Delaware Trustee
(unless the Property Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall act
through one or more Authorized Officers.
SECTION 5.05. Initial Trustees. The initial Administrative
Trustees shall be:
David D. Harrison
c/o Coltec Industries Inc
3 Coliseum Center
2550 West Tyvola Road
Charlotte, NC 28217
Robert J. Tubbs
c/o Coltec Industries Inc
3 Coliseum Center
2550 West Tyvola Road
Charlotte, NC 28217
Thomas B. Jones, Jr.
c/o Coltec Industries Inc
3 Coliseum Center
2550 West Tyvola Road
Charlotte, NC 28217
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Trustee Administration
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The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
SECTION 5.06. Appointment, Removal and Resignation of
Trustees. (a) Except as provided otherwise in Section 5.06(b), Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities:
(x) other than in respect to a Special Trustee, by
vote of the Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of the
Holders of the Common Securities, unless a Debenture Event of
Default shall have occurred and is continuing, in which event
the Property Trustee and the Delaware Trustee may only be
removed by the Holders of a Majority in liquidation amount of
the outstanding Preferred Securities, voting as a class at a
meeting of the Holders of the Preferred Securities; and
(y) if an Appointment Event has occurred and is
continuing, one (1) additional Administrative Trustee (the
"Special Trustee") may be appointed by vote of the Holders of
a Majority in liquidation amount of the Preferred Securities,
voting as a class at a meeting of the Holders of the Preferred
Securities, and such Special Trustee may only be removed
(otherwise than by the operation of Section 5.06(d)), by vote
of the Holders of a Majority in liquidation amount of the
Preferred Securities voting as a class at a meeting of the
Holders of the Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.06(a) until a Successor Property Trustee
has been appointed and has accepted such appointment by written instrument
executed by
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such Successor Property Trustee and delivered to the Administrative Trustees and
the Sponsor.
(c) The Sponsor shall remove the Property Trustee by written
instrument upon:
(i) the entry or a decree or order by a court having
jurisdiction in the premises adjudging the Property Trustee as bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Property Trustee 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 Property Trustee 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
(ii) the institution by the Property Trustee of proceedings to
be adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing
of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Property Trustee or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due and its willingness to be adjudicated a bankrupt, or
the taking of corporate action by the Property Trustee in furtherance
of any such action.
The Sponsor shall appoint a successor Property Trustee within 60 days of such an
event.
(d) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.06(d) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.02 and
5.04 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor
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Delaware Trustee and delivered to the Administrative Trustees and the Sponsor.
(e) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
provided that a Special Trustee shall only hold office while an Appointment
Event is continuing and shall cease to hold office immediately after the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities;
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee; and
(iii) no such resignation of a Special Trustee shall be
effective until the 60th day following delivery of the instrument of
resignation of the Special Trustee to the Sponsor and the Trust or such
later date specified in such instrument during which period the Holders
of the Preferred Securities shall have the right to appoint a successor
Special Trustee as provided in this Section 5.06.
(f) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property
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Trustee or Successor Delaware Trustee, as the case may be, if the Property
Trustee or the Delaware Trustee delivers an instrument of resignation in
accordance with this Section 5.06.
(g) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.06 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation or removal, the resigning Property Trustee or Delaware
Trustee, resigning or being removed as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(h) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
(i) Unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust's property may at the time be located, the Sponsor, as the holder
of the Common Securities, and the Administrative Trustees shall have power to
appoint one or more persons either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of such Trust's property, or to act as
separate trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such person or persons
in such capacity any property, title, right or power deemed necessary or
desirable, subject to the provisions of the Declaration. In case a Debenture
Event of Default has occurred and is continuing, the Property Trustee alone
shall have power to make such appointment.
SECTION 5.07. Vacancies Among Trustees. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant to
Section 5.01, or if the number of Trustees is increased pursuant to Section
5.01, a vacancy shall occur. A resolution certifying the existence of such
vacancy by a majority of the Administrative Trustees shall be conclusive
evidence of the existence of such vacancy.
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The vacancy shall be filled with a Trustee appointed in accordance with Section
5.06.
SECTION 5.08. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to annul,
dissolve or terminate the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of a Administrative Trustee in accordance with Section 5.06, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.
SECTION 5.09. Meetings. Meetings of the Administrative
Trustees shall be held from time to time upon the call of any Administrative
Trustee. Regular meetings of the Administrative Trustees may be held at a time
and place fixed by resolution of the Administrative Trustees. Notice of any
in-person meetings of the Administrative Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Administrative Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Administrative Trustee attends a meeting
for the express purpose of objecting to the transaction of any activity on the
ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Administrative Trustees.
SECTION 5.10. Delegation of Power. (a) Any Administrative
Trustee may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 his or her power for the purpose of
executing
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any documents contemplated in Section 3.06, including any registration
statement or amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession
to Business. Any Person into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person as the case may be, may
be merged or converted or with which either may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee, the Delaware Trustee or any Administrative Trustee, as the case may be,
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of the Property Trustee, or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee, the Delaware
Trustee or any Administrative Trustee, as the case may be, hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
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ARTICLE VI
Distributions
SECTION 6.01. Distributions. Holders shall receive
Distributions (as defined herein) in accordance with the applicable terms of the
relevant Holder's Securities. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the Debenture Issuer
makes a payment of interest (including Compounded Interest (as defined in the
Indenture) and additional interest (pursuant to Section 10.07 of the Indenture))
premium and principal on the Debentures held by the Property Trustee (the amount
of any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding Securities. (a) The
Administrative Trustees shall on behalf of the Trust issue one class of
convertible preferred securities, designated as 5 1/4% Convertible Preferred
Securities, liquidation amount $50 per security, Term Income Deferrable Equity
Securities (TIDES)(SM), representing undivided beneficial interests in the
assets of the Trust (the "Preferred Securities"), having such terms as are set
forth in Annex I and one class of convertible common securities, liquidation
amount $50, representing undivided beneficial interests in the assets of the
Trust (the "Common Securities"), having such terms as are set forth in Annex I.
The Trust shall have no securities or other interests in the assets of the Trust
other than the Preferred Securities and the Common Securities. The Trust shall
issue no Securities in bearer form.
(b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
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(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable, subject to Section 10.01 with respect to the
Common Securities.
(d) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.02. Execution and Authentication. (a) The Securities
shall be signed on behalf of the Trust by one Administrative Trustee. In case
any Administrative Trustee of the Trust who shall have signed any of the
Securities shall cease to be such Administrative Trustee before the Securities
so signed shall be delivered by the Trust, such Securities nevertheless may be
delivered as though the person who signed such Securities had not ceased to be
such Administrative Trustee; and any Securities may be signed on behalf of the
Trust by such persons who, at the actual date of execution of such Security,
shall be the Administrative Trustees of the Trust, although at the date of the
execution and delivery of the Declaration any such person was not such a
Administrative Trustee.
(b) One Administrative Trustee shall sign the Preferred
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.
A Preferred Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue in paragraph 5 of the Securities. The aggregate number of
Preferred Securities outstanding at any time shall not exceed the number set
forth in the terms in Annex I hereto except as provided in Section 7.06.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred
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Securities. An authenticating agent may authenticate Preferred Securities
whenever the Property Trustee may do so. Each reference in this Declaration to
authentication by the Property Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Property Trustee to deal with
the Company or an Affiliate.
SECTION 7.03. Form and Dating. The Preferred Securities and
the Property Trustee's certificate of authentication shall be substantially in
the form of Exhibit A-1 and the Common Securities shall be substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
The Preferred Securities are being offered and sold by the
Trust pursuant to a Purchase Agreement relating to the Preferred Securities,
dated April 8, 1998, among the Trust, the Sponsor and the Purchasers named
therein (the "Purchase Agreement").
(a) Global Securities. Securities offered and sold to
Qualified Institutional Buyers ("QIBs") in reliance on Rule 144A under the
Securities Act ("Rule 144A") as provided in the Purchase Agreement, shall be
issued in the form of one or more permanent global Securities in definitive,
fully registered form without distribution coupons with the appropriate global
legends and Restricted Securities Legend set forth in Exhibit A-1 hereto (each,
a "Rule 144A Global Preferred Security"), which shall be deposited on behalf of
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the purchasers of the Preferred Securities represented thereby with the Property
Trustee, at its New York office, as custodian for the Depositary, and registered
in the name of the Depositary or a nominee of the Depositary, duly executed by
the Trust and authenticated by the Property Trustee as hereinafter provided. The
number of Preferred Securities represented by the Rule 144A Global Preferred
Security may from time to time be increased or decreased by adjustments made on
the records of the Property Trustee and the Depositary or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 7.03(b) shall apply
only to the Rule 144A Global Preferred Securities and such other Preferred
Securities in global form as may be authorized by the Trust to be deposited with
or on behalf of the Depositary.
The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.03, authenticate and deliver initially one or
more Rule 144A Global Preferred Securities that (a) shall be registered in the
name of Cede & Co. or other nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
written instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary
("Participants") shall have no rights under this Declaration with respect to any
Rule 144A Global Preferred Security held on their behalf by the Depositary or by
the Property Trustee as the custodian of the Depositary or under such Rule 144A
Global Preferred Security, and the Depositary may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Rule 144A Global Preferred Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Property Trustee or any agent of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such Depositary governing
the exercise of the rights of a holder of a beneficial interest in any Rule 144A
Global Preferred Security.
(c) Certificated Securities. Except as provided in Section
7.09, owners of beneficial interests in the Rule 144A Global Preferred Security
will not be entitled to
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receive physical delivery of certificated Preferred Securities. Purchasers of
Preferred Securities who are institutional "accredited investors" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and did not purchase
Preferred Securities in reliance on Rule 144A under the Securities Act will
receive Preferred Securities in the form of individual certificates in
definitive, fully registered form without distribution coupons and with the
Restricted Securities Legend set forth in Exhibit A-1 hereto ("IAI Definitive
Preferred Securities"); provided, however, that upon transfer of such IAI
Definitive Preferred Securities to a QIB, such IAI Definitive Preferred
Securities will, unless the Rule 144A Global Preferred Security has previously
been exchanged for a certificated Preferred Security pursuant to Section
7.03(d), be exchanged for an interest in a Rule 144A Global Security pursuant to
the provisions of Section 9.02. IAI Definitive Preferred Securities will bear
the Restricted Securities Legend set forth on Exhibit A-1 unless removed in
accordance with Section 9.02. IAI Definitive Preferred Securities shall be in
minimum denominations of $50 and integral multiples thereof.
(d) A Global Preferred Security deposited with the Depositary
or with the Property Trustee as custodian for the Depositary pursuant to this
Section 7.03 shall be transferred to the beneficial owners thereof in the form
of certificated Preferred Securities only if such transfer complies with Section
9.02 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Preferred Security or if at any time
such Depositary ceases to be a "clearing agency" registered under the Exchange
Act, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Trust in its sole discretion determines that such
Global Preferred Security shall be so exchangeable, or (iii) an Event of Default
has occurred and is continuing.
(e) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.03 shall be surrendered by the Depositary to the
Property Trustee located in the Borough of Manhattan, City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate liquidation amount
of Preferred Securities of authorized denominations in the form of certificated
Preferred
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Securities. Any portion of a Global Preferred Security transferred pursuant to
this Section shall be registered in such names as the Depositary shall direct.
Any Preferred Security in the form of certificated Preferred Securities
delivered in exchange for an interest in the Rule 144A Global Preferred Security
shall, except as otherwise provided by Section 9.01, bear the Restricted
Securities Legend set forth in Exhibit A hereto.
(f) Subject to the provisions of Section 7.03(e), the
registered holder of a Global Preferred Security may grant proxies and otherwise
authorize any person, including Participants and persons that may hold interests
through Participants, to take any action which a holder is entitled to take
under this Declaration or the Securities.
(g) In the event of the occurrence of any of the events
specified in Section 7.03(d), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without distribution coupons.
SECTION 7.04. Registrar, Paying Agent and Conversion Agent.
The Trust shall maintain in the Borough of Manhattan, City of New York, State of
New York (i) an office or agency where Preferred Securities may be presented for
registration of transfer or for exchange ("Registrar"), (ii) an office or agency
where Preferred Securities may be presented for payment ("Paying Agent") and
(iii) an office or agency where Securities may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Preferred
Securities and of their transfer and exchange. The Trust may appoint the
Registrar, the Paying Agent and the Conversion Agent and may appoint one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent and the term "Conversion
Agent" includes any additional conversion agent. The Trust may change any Paying
Agent, Registrar, co-registrar or Conversion Agent without prior notice to any
Holder. The Trust shall notify the Property Trustee of the name and address of
any Agent not a party to this Declaration. If the Trust fails to appoint or
maintain another entity as Registrar, Paying Agent or Conversion Agent, the
Property Trustee shall act as such. The Trust or any of its Affiliates may act
as Paying Agent, Registrar, or Conversion Agent. The Trust shall act as Paying
Agent, Registrar, co-registrar, and Conversion Agent for the
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Common Securities. Payments in respect of the Preferred Securities held in
global form shall be made to DTC, which shall credit the relevant accounts at
DTC on the applicable Distribution Dates. With respect to the Preferred
Securities that are not held by DTC, such payments shall be made by check mailed
to the address of the holder entitled thereto as such address shall appear on
the register. The Paying Agent shall be permitted to resign as Paying Agent upon
30 days' written notice to the Property Trustee, the Administrative Trustees and
the Company. In the event that the Property Trustee shall no longer be the
Paying Agent, the Administrative Trustees shall appoint a successor (which shall
be a bank or trust company acceptable to the Administrative Trustees and the
Company) to act as Paying Agent.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, and Conversion Agent for the Preferred Securities.
SECTION 7.05. Paying Agent to Hold Money in Trust. The Trust
shall require each Paying Agent other than the Property Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Property Trustee all money held by the Paying Agent for the payment of
principal or distribution on the Securities, and will notify the Property
Trustee if there are insufficient funds. While any such insufficiency continues,
the Property Trustee may require a Paying Agent to pay all money held by it to
the Property Trustee. The Trust at any time may require a Paying Agent to pay
all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property Trustee, the Paying Agent (if
other than the Trust or an Affiliate of the Trust) shall have no further
liability for the money. If the Trust or the Sponsor or an Affiliate of the
Trust or the Sponsor acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.
SECTION 7.06. Replacement Securities. If the holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken
or if such Security is mutilated and is surrendered to the Trust or in the case
of the Preferred Securities to the Property Trustee, the Trust shall issue and
the Property Trustee shall authenticate a replacement Security if the Property
Trustee's and the Trust's requirements, as the case may be, are met. If required
by the Property Trustee or the Trust, an indemnity bond must be sufficient in
the judgment of both to protect the Trustees,
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the Property Trustee, the Sponsor or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The Company may charge
for its expenses in replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Sponsor pursuant to Article III hereof, the Sponsor in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Every replacement Security is an additional obligation of the
Trust.
SECTION 7.07. Outstanding Preferred Securities. The Preferred
Securities outstanding at any time are all the Preferred Securities
authenticated by the Property Trustee except for those canceled by it, those
delivered to it for cancelation, and those described in this Section as not
outstanding.
If a Preferred Security is replaced, paid or purchased
pursuant to Section 7.06 hereof, it ceases to be outstanding unless the Property
Trustee receives proof satisfactory to it that the replaced, paid or purchased
Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with
the terms of this Declaration, they cease to be outstanding and interest on them
ceases to accrue.
A Preferred Security does not cease to be outstanding because
one of the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.08. Preferred Securities in Treasury. In determining
whether the Holders of the required amount of Securities have concurred in any
direction, waiver or consent, Preferred Securities owned by the Trust, the
Sponsor or an Affiliate of the Sponsor, as the case may be, shall be disregarded
and deemed not to be outstanding, except that for the purposes of determining
whether the Property Trustee shall be fully protected in relying on any such
direction, waiver or consent, only Securities which a Responsible Officer of the
Property Trustee actually knows are so owned shall be so disregarded.
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SECTION 7.09. Temporary Securities. (a) Until definitive
Securities are ready for delivery, the Trust may prepare and, in the case of the
Preferred Securities, the Property Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Trust considers
appropriate for temporary Securities. Without unreasonable delay, the Trust
shall prepare and, in the case of the Preferred Securities, the Property Trustee
shall authenticate definitive Securities in exchange for temporary Securities.
(b) A Global Preferred Security deposited with the Depositary
or with the Property Trustee as custodian for the Depositary pursuant to Section
7.03 shall be transferred to the beneficial owners thereof in the form of
certificated Preferred Securities only if such transfer complies with Section
9.02 and (i) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Preferred Security or if at any time
such Depositary ceases to be a "clearing agency" registered under the Exchange
Act and a successor depositary is not appointed by the Sponsor within 90 days of
such notice or if the Trust at its sole option elects to terminate the
book-entry system through DTC, or (ii) an Event of Default has occurred and is
continuing.
(c) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.09 shall be surrendered by the Depositary to the
Property Trustee located in the Borough of Manhattan, City of New York, to be so
transferred, in whole or from time to time in part, without charge, and the
Property Trustee shall authenticate and deliver, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate liquidation amount
of Securities of authorized denominations in the form of certificated
Securities. Any portion of a Global Preferred Security transferred pursuant to
this Section shall be registered in such names as the Depositary shall direct.
Any Preferred Security in the form of certificated Preferred Securities
delivered in exchange for an interest in the Restricted Global Preferred
Security shall, except as otherwise provided by Sections 7.03 and 9.01, bear the
Restricted Securities Legend set forth in Exhibit A hereto.
(d) Subject to the provisions of Section 7.09(c), the
registered holder of a Global Preferred Security may grant proxies and otherwise
authorize any person, including
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Participants and Persons that may hold interests through Participants, to take
any action which a holder is entitled to take under this Declaration or the
Securities.
(e) In the event of the occurrence of either of the events
specified in Section 7.09(b), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without interest coupons.
SECTION 7.10. Cancelation. The Trust at any time may deliver
Preferred Securities to the Property Trustee for cancelation. The Registrar,
Paying Agent and Conversion Agent shall forward to the Property Trustee any
Preferred Securities surrendered to them for registration of transfer,
redemption, conversion, exchange or payment. The Property Trustee shall promptly
cancel all Preferred Securities, surrendered for registration of transfer,
redemption, conversion, exchange, payment, replacement or cancelation and shall
dispose of canceled Preferred Securities as the Trust directs. The Trust may not
issue new Preferred Securities to replace Preferred Securities that it has paid
or that have been delivered to the Property Trustee for cancelation or that any
holder has converted.
ARTICLE VIII
Dissolution of Trust
SECTION 8.01. Dissolution of Trust. (a) The Trust shall
automatically be dissolved upon the earliest to occur of the following:
(i) the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) the filing of a certificate of dissolution or its equivalent with
respect to the Holder of the Common Securities or the Sponsor; or the
revocation of the charter of the Holder of the Common Securities or the
Sponsor and the expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) all of the Securities shall have been called for redemption and
the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
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(iv) the expiration of the term of the Trust on April 15, 2028; or
(v) the entry of a decree of judicial dissolution of the Holder of the
Common Securities, the Sponsor or the Trust.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.01(a), after the completion of the winding up of the
affairs of the Trust, the Trustees shall file a certificate of cancelation with
the Secretary of State of the State of Delaware and the Trust shall be
terminated.
(c) The provisions of Section 3.09 and Article X shall survive
the dissolution of the Trust.
ARTICLE IX
Transfer and Exchange
SECTION 9.01. General. (a) Where Preferred Securities are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal number of Preferred Securities
represented by different certificates, the Registrar shall register the transfer
or make the exchange if its requirements for such transactions are met. To
permit registrations of transfers and exchanges, the Trust shall issue and the
Property Trustee shall authenticate Preferred Securities at the Registrar's
request. Beneficial Interests in the Global Preferred Security may be exchanged
by or on behalf of the Depositary for certificate Preferred Securities upon
request by the Depositary, but only uon at least 20 dayss' prior written notice
given to the Property Trustee in accordance with the Depositary's customary
procedures.
(b) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
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Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
Federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
(c) The Administrative Trustees shall provide for the
registration of Securities and of transfers of Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Securities, the Administrative Trustees shall cause one or
more new Securities to be issued in the name of the designated transferee or
transferees. Every Security surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Administrative Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Security surrendered for registration of
transfer shall be canceled by the Administrative Trustees. A transferee of a
Security shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Declaration.
(d) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms and ending at the close of
business on the day of selection, or (ii) to register the transfer or exchange
of any Preferred Security so selected for redemption in whole or in part, except
the unredeemed portion of any Preferred Security being redeemed in part.
(e) All Preferred Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration
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shall evidence the same security and shall be entitled to the same benefits
under this Declaration as the Preferred Securities surrendered upon such
transfer or exchange.
SECTION 9.02. Transfer Procedures and Restrictions. (a)
General. Except in connection with a Shelf Registration Statement contemplated
by and in accordance with the terms of the Registration Rights Agreement, if
Preferred Securities are issued upon the transfer, exchange or replacement of
Preferred Securities bearing the Restricted Securities Legend set forth in
Exhibit A-1 hereto, or if a request is made to remove such Restricted Securities
Legend on Preferred Securities, the Preferred Securities so issued shall bear
the Restricted Securities Legend, or the Restricted Securities Legend shall not
be removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such satisfactory evidence, which may include an opinion of
counsel licensed to practice law in the State of New York, as may be reasonably
required by the Company, that neither the legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or, with
respect to Restricted Securities, that such Securities are not "restricted"
within the meaning of Rule 144 under the Securities Act. Upon provision of such
satisfactory evidence, the Property Trustee, at the written direction of the
Trust, shall authenticate and deliver Preferred Securities that do not bear the
legend.
(b) Transfers After Effectiveness of Shelf Registration
Statement. After the effectiveness of a Shelf Registration Statement for any
Preferred Securities, all requirements pertaining to Restricted Securities
Legends on such Preferred Security will cease to apply, and beneficial interests
in a Preferred Security in global form without Restricted Securities Legends
will be available to transferees of such Preferred Securities, upon exchange of
the transferring holder's IAI Definitive Preferred Security or directions to
transfer such Holder's beneficial interest in the Rule 144A Global Preferred
Security, as the case may be. After the effectiveness of the Shelf Registration
Statement, the Trust shall issue and the Property Trustee shall authenticate a
Preferred Security in global form without the Restricted Securities Legend (the
"Unrestricted Global Preferred Security") to deposit with the Depositary to
evidence transfers of (i) beneficial interests from the Rule 144A Global
Preferred Security and (ii) IAI Definitive Preferred Securities.
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(c) Transfer and Exchange of Definitive Preferred Securities.
When Definitive Preferred Securities are presented to the Registrar or
co-registrar
(x) to register the transfer of such Definitive Preferred
Securities, or
(y) to exchange such Definitive Preferred Securities for an
equal number of Definitive Preferred Securities of another
denomination. The Registrar or co-registrar shall register the transfer
or make the exchange as requested if its reasonable requirements for
such transaction are met; provided, however, that the Definitive
Preferred Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory
to the Trust and the Registrar or co-registrar, duly executed
by the Holder thereof or his attorney duly authorized in
writing; and
(ii) in the case of Definitive Preferred Securities
that are Restricted Definitive Preferred Securities, are being
transferred or exchanged pursuant to an effective registration
statement under the Securities Act or pursuant to clause (A)
or (B) below, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Restricted Preferred Securities
are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, such Holder shall deliver a certification
to that effect (in the form set forth on the reverse
of the Preferred Security); or
(B) if such Restricted Preferred Securities
are being transferred pursuant to an exemption from
registration in accordance with Rule 144A or Rule 144
under the Securities Act, such Holder shall deliver:
(i) a certification to that effect (in the form set
forth on the reverse of the Preferred Security) and
(ii) if the Trust or Registrar
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so requests, evidence reasonably satisfactory to them
as to the compliance with the restrictions set forth
in the Restricted Securities Legend.
Definitive Preferred Securities that are transferred to QIBs
in accordance with Rule 144A under the Securities Act must take delivery of
their interests in the Preferred Securities in the form of a beneficial interest
in the Rule 144A Global Preferred Security in accordance with Section 9.02(e).
(d) Restrictions on Transfer of a Definitive Preferred
Security for a Beneficial Interest in a Global Preferred Security. A Definitive
Preferred Security may not be exchanged for a beneficial interest in a Global
Preferred Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Preferred Security, that such Definitive Preferred Security is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act; and
(ii) written instructions directing the Property Trustee to
make, or to direct the Depositary to make, an adjustment on its books
and records with respect to such Global Preferred Security to reflect
an increase in the number of the Preferred Securities represented by
the Global Preferred Security,
then the Property Trustee shall cancel such Definitive Preferred Security and
cause, or direct the Depositary to cause, the aggregate number of Preferred
Securities represented by the Global Preferred Security to be increased
accordingly. If no Global Preferred Securities are then outstanding, the Trust
shall issue and the Property Trustee shall authenticate, upon written order of
any Administrative Trustee, an appropriate number of Preferred Securities in
global form.
(e) Transfer and Exchange of Global Preferred Securities. The
transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration
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(including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depositary therefor.
(f) Transfer of a Beneficial Interest in a Global Preferred
Security for a Definitive Preferred Security. Definitive Preferred Securities
issued in exchange for a beneficial interest in a Global Preferred Security
pursuant to this Section 9.02(f) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the Property
Trustee. The Property Trustee shall deliver such Preferred Securities to the
persons in whose names such Preferred Securities are so registered in accordance
with the instructions of the Depositary.
(g) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (h) of this Section 9.02), a Global
Preferred Security may not be transferred as a whole except by the Depositary to
a nominee of the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(h) Legend.
(i) Except as permitted by the following paragraph (iii), each
Preferred Security certificate evidencing the Global Preferred
Securities and the Definitive Preferred Securities (and all Preferred
Securities issued in exchange therefor or substitution thereof) shall
bear a legend (together, in the case of Restricted Definitive Preferred
Securities, the legend set forth in the following paragraph (ii), the
"Restricted Securities Legend") in substantially the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
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THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY AND ANY CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES ISSUABLE UPON EXCHANGE THEREFOR AND ANY COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE".
(ii) In addition to the legend set forth in paragraph (i)
above, Preferred Securities initially sold to non-QIBs shall bear a
legend in substantially the following form:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH REGISTRAR AND TRANSFER AGENT MAY
REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS."
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(iii) Upon any sale or transfer of a Restricted Preferred
Security (including any Restricted Preferred Security represented by a
Global Preferred Security) pursuant to Rule 144 under the Securities
Act or an effective registration statement under the Securities Act:
(A) in the case of any Restricted Preferred Security
that is a Definitive Preferred Security, the Registrar shall
permit the Holder thereof to exchange such Restricted
Preferred Security for a Definitive Preferred Security that
does not bear the Restricted Securities Legend and rescind any
restriction on the transfer of such Restricted Preferred
Security; and
(B) in the case of any Restricted Preferred Security
that is represented by a Global Preferred Security, the
Registrar shall permit the Holder thereof to exchange such
Restricted Preferred Security (in connection with the sale of
a Preferred Security pursuant to the Registration Rights
Agreement) for another Global Preferred Security that does not
bear the Restricted Securities Legend.
(i) Cancelation or Adjustment of Global Preferred Security. At
such time as all beneficial interests in a Global Preferred Security have either
been exchanged for Definitive Preferred Securities to the extent permitted by
this Declaration or redeemed, repurchased or canceled in accordance with the
terms of this Declaration, such Global Preferred Security shall be returned to
the Depositary for cancelation or retained and canceled by the Property Trustee.
At any time prior to such cancelation, if any beneficial interest in a Global
Preferred Security is exchanged for Definitive Preferred Securities, Preferred
Securities represented by such Global Preferred Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee (if it
is then the Securities Custodian for such Global Preferred Security) with
respect to such Global Preferred Security, by the Property Trustee or the
Securities Custodian, to reflect such reduction.
(j) No Obligation of the Property Trustee.
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(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred Security, a
Participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
Participant thereof, with respect to any ownership interest in the
Preferred Securities or with respect to the delivery to any
Participant, beneficial owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Preferred
Securities. All notices and communications to be given to the Holders
and all payments to be made to Holders under the Preferred Securities
shall be given or made only to or upon the order of the registered
Holders (which shall be the Depositary or its nominee in the case of a
Global Preferred Security). The rights of beneficial owners in any
Global Preferred Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the
Depositary. The Property Trustee may conclusively rely and shall be
fully protected in relying upon information furnished by the Depositary
or agent thereof with respect to its Participants and any beneficial
owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in
any Preferred Security (including any transfers between or among
Depositary Participants or beneficial owners in any Global Preferred
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Declaration, and to
examine the same to determine substantial compliance as to form with
the express requirements hereof.
SECTION 9.03. Deemed Security Holders. The Trustees may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any
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Person, whether or not the Trust, the Property Trustee, the Registrar or a
co-registrar shall have actual or other notice thereof.
SECTION 9.04. Notices to Clearing Agency. Whenever a notice or
other communication to the Preferred Security Holders is required under this
Declaration, the Administrative Trustees shall, in the case of any Global
Preferred Security, give all such notices and communications specified herein to
be given to the Preferred Security Holders to the Depositary, and shall have no
notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.05. Appointment of Successor Clearing Agency. If the
Depository elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Administrative Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to such
Preferred Securities.
ARTICLE X
Limitation of Liability of
Holders of Securities, Trustees or Others
SECTION 10.01. Liability. (a) Except as expressly set forth in
this Declaration, the Securities Guarantees and the terms of the Securities the
Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to
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stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.02. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.03. Fiduciary Duty. (a) To the extent that, at law
or in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
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(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.04. Indemnification. (a) To the fullest extent
permitted by applicable law, the Sponsor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by such Indemnified
Person by reason of the creation, operation or
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termination of the Trust or any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Declaration, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, gross negligence) or
willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees and expenses) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Sponsor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Sponsor of an undertaking
by or on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.4(a). The indemnification shall survive the termination
of this Declaration.
SECTION 10.05. Outside Businesses. Any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee (subject to Section
5.03(c), may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee
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or body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year. The fiscal year ("Fiscal Year") of
the Trust shall be the calendar year, or such other year as is required by the
Code.
SECTION 11.02. Certain Accounting Matters. (a) At all times
during the existence of the Trust, the Administrative Trustees shall keep, or
cause to be kept, full books of account, records and supporting documents, which
shall reflect in reasonable detail each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined by
and reported upon as of the end of each Fiscal Year by a firm of independent
certified public accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder as
is required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrative
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a
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Form 1041 or such other form required by United States federal income tax law,
and any other annual income tax returns required to be filed by the
Administrative Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.03. Banking. The trust shall maintain one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Trustee Account and no
other funds of the Trust shall be deposited in the Property Trustee Account. The
sole signatories for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall designate the
signatories for the Property Trustee Account.
SECTION 11.04. Withholding. The Trust and the Administrative
Trustees shall comply with all withholding requirements under United States
federal, state and local law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary to establish
an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrative Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments. (a) This Declaration may be amended
from time to time by the Sponsor, the Property Trustee and the Administrative
Trustees, without the consent of the Holders of the Securities, (i) to cure any
ambiguity, correct or supplement any provision in the Declaration that may be
inconsistent with any other provision, (ii) to modify, eliminate or add to any
provisions of the Declaration and to take any necessary or desirable action, not
inconsistent with applicable law or the provisions of the Declaration, to such
extent as shall be necessary to ensure that the Trust will not be taxable as a
corporation or will be classified for United States Federal income tax purposes
as a grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the 1940 Act; (iii) 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 Securities; (iv) to add to the covenants of the
Company for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company; (v) to comply with the requirements of the
Commission in order to effect or maintain the qualification of this Indenture
under the Trust Indenture Act; (vi) to make provision for transfer procedures,
certification, book-entry provisions, the form of restricted securities legends,
if any, to be placed on Securities, and all other matters required pursuant to
Section 3.06(b) or otherwise necessary, desirable or appropriate in connection
with the issuance of Securities to holders of Preferred Securities in the event
of a distribution of Securities by the Trust if a Special Event occurs and is
continuing; (vii) to make any change that does not materially adversely affect
the interests of the Holders of the Securities or, so long as any of the
Preferred Securities shall remain outstanding, the holders of the Preferred
Securities; provided, however, that in the case of clauses (i) and (ii), such
action shall not adversely affect in any material respect the interests of any
Holder of Securities, and any such amendments of the Declaration shall become
effective when notice thereof is given to the Holders of the Securities.
(b) Except as provided in (c) below, this Declaration may be
amended by the Trustees and the Company with (i) the consent of Holders
representing not less than a
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majority in liquidation amount of the outstanding Preferred Securities, and (ii)
receipt by the Trustees of an opinion of counsel experienced in such matters to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment will not affect the Trust's status as
a grantor trust for United States Federal income tax purposes or the Trust's
exemption from status as an "investment company" under the 1940 Act.
(c) Without the consent of each Holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
(d) Notwithstanding that Holders of the Preferred Securities
are entitled to vote or consent under any of the circumstances described in this
Declaration, any of the Preferred Securities that are owned by the Sponsor, the
Trustees or any affiliate of the Sponsor or any Trustees, shall, for the
purposes of such vote or consent, be treated as if they were not outstanding.
SECTION 12.02. Meetings of the Holders of Securities; Action
by Written Consent. (a) Meetings of the Holders of any class of Securities may
be called at any time by the Administrative Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which Holders of
such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading. The
Administrative Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in liquidation amount of such
class of Securities. Such direction shall be given by delivering to the
Administrative Trustees one or more requests in a writing stating that the
signing Holders of Securities wish to call a meeting and indicating the general
or specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Securities exercising the right to call a meeting and only those
Securities represented by the Certificates so specified shall be counted for
purposes of determining whether
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the required percentage set forth in the second sentence of this paragraph has
been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the Holders of
Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by the Holders of
Securities owning not less than the minimum aggregate liquidation
amount of Securities that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The Administrative
Trustees may specify that any written ballot submitted to the Security
Holders for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Administrative
Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation;
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(iii) each meeting of the Holders of the Securities shall be
conducted by the Administrative Trustees or by such other Person that
the Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Preferred Securities are then listed
or trading, provide otherwise, the Administrative Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
Representations of Property Trustee and Delaware Trustee
SECTION 13.01. Representations and Warranties of Property
Trustee. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, at the
Closing Date and at each Optional Closing Date, if any, and each Successor
Property Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(b) The execution, delivery and performance by the Property
Trustee of the Declaration have been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable
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against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration
by the Property Trustee do not conflict with or constitute a breach of the
certificate of incorporation or By-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration
with or notice to, any New York or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
SECTION 13.02. Representations and Warranties of Delaware
Trustee. The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, at the
Closing Date and at each Optional Closing Date, if any, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(b) The execution, delivery and performance by the Delaware
Trustee of the Declaration have been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee, and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration
by the Delaware Trustee do not conflict with or
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constitute a breach of the certificate of incorporation or By-laws of the
Delaware Trustee.
(d) No consent, approval or authorization of, or registration
with or notice to, any New York or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(e) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
ARTICLE XIV
Registration Rights
SECTION 14.01. Registration Rights. The holders of the
Preferred Securities, the Debentures and the Guarantee are entitled to the
benefits of the Registration Rights Agreement.
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ARTICLE XV
Miscellaneous
SECTION 15.01. Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders of the Securities):
c/o Coltec Industries Inc
3 Coliseum Center
2550 West Tyvola Road
Charlotte, NC 28217
Attention: Treasurer
(b) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street
Floor 21 West
New York, NY 10286
Attention: Corporate Trust Department
(c) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give notice
of to the Holders of the Securities):
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, DE 19711
Attention: Corporate Trust Department
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(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
c/o Coltec Industries Inc
3 Coliseum Center
2550 West Tyvola Road
Charlotte, NC 28217
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first-class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 15.02. Governing Law. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws. Sections 3540 and
3561 of Title 12 of the Delaware Code shall not apply to the Trust.
SECTION 15.03. Intention of the Parties. It is the intention
of the parties hereto that the Trust be classified for United States federal
income tax purposes as a grantor trust. The provisions of this Declaration shall
be interpreted to further this intention of the parties.
SECTION 15.04. Headings. Headings contained in this
Declaration are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
SECTION 15.05. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind
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and inure to the benefit of their respective successors and assigns, whether so
expressed.
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SECTION 15.06. Partial Enforceability. If any provision of
this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
SECTION 15.07. Counterparts. This Declaration may contain more
than one counterpart of the signature page and this Declaration may be executed
by the affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
as Trustee
___________________________________
as Trustee
___________________________________
as Trustee
___________________________________
COLTEC INDUSTRIES INC,
as Sponsor
By: _______________________________
Name:
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Title:
THE BANK OF NEW YORK (DELAWARE), as
Delaware Trustee,
By: _______________________________
Name:
Title:
THE BANK OF NEW YORK, as Property
Trustee
By: _______________________________
Name:
Title:
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TERMS OF
5 1/4% CONVERTIBLE PREFERRED SECURITIES
Term Income Deferrable Equity Securities (TIDES(SM))
5 1/4% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of
Trust, dated as of April 8, 1998 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or the Indenture (as defined in the
Declaration) or, if not defined in the Declaration or Indenture, as defined in
the Offering Circular (as defined in the Declaration)):
1. Designation and Number.
(a) "Preferred Securities." 3,000,000 Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the
assets of the Trust of $150,000,000 dollars, and a liquidation
amount with respect to the assets of the Trust of $50 per
Preferred Security, are hereby designated for the purposes of
identification only as "5 1/4% Convertible Preferred
Securities (liquidation amount $50 per Convertible Preferred
Security), Term Income Deferrable Equity Securities
(TIDES(SM))" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities
shall be substantially in the form attached hereto as Exhibit
A-1, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange or
other organization on which the Preferred Securities are
listed.
(b) "Common Securities." 92,784 Common Securities of the Trust
with an aggregate liquidation amount with respect to the
assets of the Trust of 4,639,200, and a liquidation amount
with respect to the assets of the Trust of $50 per Common
Security, are hereby
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designated for the purposes of identification only as "5 1/4%
Convertible Common Securities (liquidation amount $50 per
Convertible Common Security)" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities
shall be substantially in the form attached hereto as Exhibit
A-2, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or
practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of 5 1/4% (the "Coupon Rate") of the stated
liquidation amount of $50 per Security, such rate being the
rate of interest payable on the Debentures to be held by the
Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law),
subject to adjustment in the event of a Registration Default,
as described in the Declaration. The term "Distributions" as
used herein includes quarterly distributions, additional
distributions on quarterly distributions not paid on the
applicable distribution date, interest which accrues on the
Debentures upon a Registration Default and Additional Sums, as
applicable. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has
funds available therefor and cash sufficient to make such
payments. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on
the basis of a 360-day year of twelve 30-day months, and for
any period shorter than a full quarterly Distribution period
for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per
30-day month.
(b) Distributions on the Securities will be cumulative, will
accrue from the date of original issuance and will be payable
quarterly in arrears, on the following dates, which dates
correspond to the interest payment dates on the Debentures:
January 15, April 15, July 15 and October 15 of
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each year, commencing on July 15, 1998, except as otherwise
described below. Accrued Distributions not paid on the
applicable distribution date will accrue additional
Distributions on the amount thereof (to the extent permitted
by law), compounded quarterly from the relevant distribution
date. So long as no Debenture Event of Default has occurred
and is continuing, the Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures
for a period not exceeding 20 consecutive quarters (each a
"Deferral Period"); provided that no Deferral Period may
extend beyond April 15, 2028, and, as a consequence of such
deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will accumulate additional
Distributions thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded quarterly during any such
Deferral Period to the date of payment. Prior to three
Business Days before a Regular Record Date fixed for a Payment
Resumption Date as defined in the Indenture, the Sponsor may
further extend such Deferral Period; provided that such
Deferral Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or
extend beyond the maturity (whether at the stated maturity or
by declaration of acceleration, call for redemption or
otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the Regular
Record Date for the relevant Payment Resumption Date. A
Deferral Period will terminate upon the payment by the Sponsor
of all amounts then accrued and unpaid on the Debentures
(together with interest thereon compounded quarterly to the
extent permitted by applicable law). Upon the termination of
any Deferral Period and the payment of all amounts then due,
the Sponsor may commence a new Deferral Period, subject to the
above requirements. There is no limitation on the number of
times that the Sponsor may elect to begin a Deferral Period.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust
at the close of business on
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the relevant record dates. The relevant record dates shall be
on the next preceding January 1, April 1, July 1 and October
1, except as otherwise set forth in the Declaration or this
Annex I to the Declaration. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such
payment in respect of Preferred Securities being held in
book-entry form through The Depository Trust Company (the
"Depositary") will be made as described under the heading
"Description of the Convertible Preferred Securities -- Form,
Book-Entry Procedures and Transfer" in the Offering Circular.
The relevant record dates for the Common Securities shall be
the same record dates as for the Preferred Securities.
Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result
of the Debenture Issuer having failed to make a payment under
the Debentures, will cease to be payable to the Person in
whose name such Securities are registered on the relevant
record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Securities are
registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on
which Distributions are payable on the Securities is not a
Business Day, then payment of the Distribution payable on such
date will be made on the next succeeding day that is a
Business Day (and without any additional Distributions or
other payment in respect of any such delay) except that, if
such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date.
(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Common Stock
pursuant to the terms of the Securities as forth in this Annex
I to the Declaration, no payment, allowance or adjustment
shall be made with respect to accumulated and unpaid
Distributions whether or not its current on such Securities,
or be required to be made; provided that Holders of Securities
at the close of business on any record date for the payment of
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Distributions will be entitled to receive the Distributions
payable on such Securities on the corresponding payment date
notwithstanding the conversion of such Securities into Common
Stock following such record date.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein)
among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution of
the Trust other than redemption of Trust Securities, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to the Holders of the Securities a Like
Amount of Debentures, unless such distribution would not be practical, in which
event such Holders will be entitled to receive out of the assets of the Trust
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to, in the
case of holders of Preferred Securities, the aggregate liquidation amount
thereof plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Preferred Securities shall be paid
on a Pro Rata basis in accordance with paragraph 9. The Holder of the Common
Securities will be entitled to receive distributions upon any such liquidation
Pro Rata with the holders of the Preferred Securities, except as provided in
paragraph 10.
4. Redemption and Distribution.
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(a) Upon the repayment or payment in full of the Debentures at
their stated maturity date or a redemption in whole or in part
of the Debentures (other than following any distribution of
the Debentures to the Holders of Securities), the proceeds
from such repayment or redemption shall be applied by the
Property Trustee to redeem, on a Pro Rata basis, a Like Amount
of Securities, on the redemption date, in an amount per
Security equal to the applicable redemption price, which
redemption price will be equal to (i) the liquidation amount
of each of the Securities plus any accrued and unpaid
Distributions thereon, in the case of the repayment of the
Debentures at stated maturity or in the case of the redemption
of the Debentures in certain limited circumstances upon the
occurrence of a Tax Event, or (ii) in the case of an Optional
Redemption on or after April 20, 2001, the Optional Redemption
Price (as defined in the Indenture) plus accrued and unpaid
Distributions thereon, payable in cash (as applicable, the
"Redemption Price"). Holders will be given not less than 30
nor more than 60 days' notice of such redemption. Upon the
repayment of the Debentures at maturity or upon any
acceleration, earlier redemption or otherwise, the proceeds
from such repayment will be applied to redeem the Securities,
in whole, upon not less than 30 nor more than 60 days' notice.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities
will be redeemed Pro Rata and the Preferred Securities to be
redeemed will be as described in Paragraph 4(g)(ii) below.
(c) The Sponsor, as the Holder of the outstanding Common
Securities, shall have the right at any time (including,
without limitation, upon the occurrence of a Tax Event or
Investment Company Act Event) to dissolve the Trust and, after
satisfaction of liabilities to creditors of the Trust as
required by applicable law, cause a Like Amount of the
Debentures to be distributed to the holders of the Securities
upon liquidation of the Trust, that, following such
distribution of the Debentures, the Company shall use its
reasonable best efforts to maintain any ratings of such
Debentures by any nationally recognized rating agency for so
long as
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any such Debentures are outstanding. If the Company does not
redeem the Debentures prior to maturity and the Trust is not
liquidated and the Debentures are not distributed to holders
of the Trust Securities, the Preferred Securities will remain
outstanding until the repayment of the Debentures at their
stated maturity and the distribution of the Liquidation
Distribution to the holders of the Preferred Securities.
(d) If, at any time, a Tax Event shall occur and be continuing the
Sponsor shall cause the Issuer Trustees to dissolve the Trust
and, after satisfaction of liabilities to creditors of the
Trust, cause Debentures to be distributed to the Holders of
the Securities in liquidation of the Trust within 90 days
following the occurrence of such Tax Event (the "90 Day
Period"); provided, however, that such liquidation and
distribution shall be conditioned on (i) the Issuer Trustees'
receipt of an opinion of a nationally recognized independent
tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters (a "No Recognition Opinion"),
which opinion may rely on published revenue rulings of the
Internal Revenue Service, to the effect that the Holders of
the Securities will not recognize any income, gain or loss for
United States Federal income tax purposes as a result of such
liquidation and distribution of Debentures, and (ii) the
Sponsor being unable to avoid such Tax Event within the 90 Day
Period by taking some ministerial action or pursuing some
other reasonable measure that, in the sole judgment of the
Sponsor, will have no adverse effect on the Trust, the Sponsor
or the Holders of the Securities and will involve no material
cost ("Ministerial Action").
If (i) the Sponsor has received an opinion (a "Redemption Tax
Opinion") of a nationally recognized independent tax counsel
(reasonably acceptable to the Trustees) experienced in such
matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Sponsor would be precluded from
deducting the interest on the Debentures for United States
Federal income tax purposes, even after the Debentures were
distributed to the Holders of Securities upon
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liquidation of the Trust as described in this paragraph 4(d),
or (ii) the Trustees shall have been informed by such tax
counsel that it cannot deliver a No Recognition Opinion, the
Sponsor shall have the right, upon not less than 30 nor more
than 60 days' notice, and within 90 days following the
occurrence of such Tax Event, to redeem the Debentures in
whole (but not in part) for cash, for the principal amount
plus accrued and unpaid interest thereon and, following such
redemption, all the Securities will be redeemed by the Trust
at the aggregate liquidation amount of $50 per Security plus
accrued and unpaid Distributions thereon; provided, however,
that, if at the time there is available to the Sponsor or the
Trust the opportunity to eliminate, within the 90 Day Period,
the Tax Event by taking some Ministerial Action, the Trust or
the Sponsor will pursue such Ministerial Action in lieu of
redemption.
In lieu of the foregoing options, the Company shall also have
the option of causing the Securities to remain outstanding and
pay Additional Sums on the Debentures.
"Tax Event" means that the Property Trustee shall have
received an opinion of a nationally recognized independent tax
counsel to the Sponsor (reasonably acceptable to the Trustees)
experienced in such matters (a "Dissolution Tax Opinion") to
the effect that, as a result of (a) any amendment to or change
(including any announced prospective change (which shall not
include a proposed change), provided that a Tax Event shall
not occur more than 90 days before the effective date of any
such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision
or taxing authority therefor or therein, (ii) any judicial
decision or official administrative pronouncement, ruling,
regulatory procedure, notice or announcement, including any
notice or announcement of intent to adopt such procedures or
regulations (an "Administrative Action") or (iii) any
amendment to or change in the administrative position or
interpretation of any Administrative Action or judicial
decision that differs from the theretofore generally accepted
position, in each case, by any legislative body,
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court, governmental agency or regulatory body, irrespective of
the manner in which such amendment or change is made known,
which amendment or change is effective or such Administrative
Action or decision is announced, in each case, on or after the
date of original issuance of the Debentures or the issue date
of the Preferred Securities issued by the Trust, there is more
than an insubstantial risk that (a) if the Debentures are held
by the Property Trustee, (I) the Trust is, or will be within
90 days of the date of such opinion, subject to United States
Federal income tax with respect to interest accrued or
received on the Debentures or subject to more than a de
minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (II) interest
payable by the Sponsor to the Trust on the Debentures is not,
or within 90 days of the date of such opinion will not be,
deductible by the Sponsor in whole or in part for United
States Federal income tax purposes or (b) with respect to
Debentures which are no longer held by the Property Trustee,
interest payable by the Sponsor on the Debentures is not, or
within 90 days of the date of such opinion will not be,
deductible by the Sponsor in whole or in part for United
States Federal income tax purposes.
If an Investment Company Event (as hereinafter defined) shall
occur and be continuing, the Sponsor shall cause the Trustees
to dissolve the Trust and, after satisfaction of liabilities
to Creditors of the Trust as provided by applicable law, cause
the Debentures to be distributed to the Holders of the
Securities in liquidation of the Trust within 90 days
following the occurrence of such Investment Company Event.
"Investment Company Event" means the occurrence of a change in
law or regulation or a written change in interpretation or
application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), to the effect that the Trust is or will be
considered an Investment Company which is required to be
registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after the date of the
Offering Circular.
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On or after the liquidation date fixed for any distribution of
Debentures to Holders of the Securities: (i) the Securities
will no longer be deemed to be outstanding, (ii) the
Depositary or its nominee (or any successor Clearing Agency or
its nominee), as record Holder of Preferred Securities
represented by global certificates, will receive a registered
global certificate or certificates representing the Debentures
to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates
representing Preferred Securities held by the Depositary or
its nominee (or any successor Clearing Agency or its nominee),
will be deemed to represent Debentures having an aggregate
principal amount equal to the aggregate stated liquidation
amount of such Securities, with accrued and unpaid interest
equal to accrued and unpaid Distributions on such Securities
until such certificates are presented to the Administrative
Trustees or their agent for cancelation, whereupon the Sponsor
will issue to such Holder, and the Debenture Trustee will
authenticate, a certificate representing such Debentures.
(e) The Securities will not be redeemed unless all accrued and
unpaid Distributions have been paid on all Securities for all
quarterly Distribution periods terminating on or before the
date of redemption.
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(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for the
Securities (a "Redemption/Distribution Notice") will
be given by the Trust by mail to each Holder of
Securities to be redeemed or exchanged not fewer than
30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of
a redemption, will be the date fixed for redemption
of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on
which notices are given pursuant to this paragraph
4(g)(i), a Redemption/Distribution Notice shall be
deemed to be given on the day such notice is first
mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of
Securities at the address of each such Holder
appearing in the books and records of the Trust. No
defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any
Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be
redeemed shall be redeemed Pro Rata from each Holder
of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the
name of and held of record by the Depositary (or any
successor Clearing Agency) or any nominee, the
distribution of the proceeds of such redemption will
be made to each Clearing Agency Participant (or
Person on whose behalf such nominee holds such
securities) in accordance with the procedures applied
by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, which notice may
only be issued if the Debentures
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are redeemed as set out in this paragraph 4 (which
notice will be irrevocable), then (A) by 12:00 noon,
New York City time, on the redemption date, with
respect to Preferred Securities held in global form,
the Property Trustee will deposit irrevocably with
the Depositary (or successor Clearing Agency) funds,
to the extent funds are available, sufficient to pay
the amount payable on redemption with respect to such
Preferred Securities and will give the Depositary
irrevocable instructions and authority to pay the
amount payable on redemption to the Holders of such
Preferred Securities, and (B) with respect to
Preferred Securities issued in certificated form and
Common Securities the Property Trustee will
irrevocably deposit with the Paying Agent funds, to
the extent funds are available, sufficient to pay the
amount payable on redemption to the Holders of such
Securities and will give the Paying Agent irrevocable
instructions and authority to pay the amount payable
on redemption to the Holders thereof upon surrender
of their certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the date of
redemption, shall be payable to the holders of
Preferred Securities on the relevant record dates for
the related dates of Distribution. If a
Redemption/Distribution Notice shall have been given
and funds deposited as required, then on the date of
such deposit, all rights of Holders of such
Securities so called for redemption will cease,
except the right of the Holders of such Securities to
receive the redemption price, but without interest on
such redemption price, and such Securities will cease
to be outstanding. Neither the Administrative
Trustees nor the Trust shall be required to register
or cause to be registered the transfer of any
Securities that have been so called for redemption.
If any date fixed for redemption of Securities is not
a Business Day, then payment of the amount payable on
such date will be made on the next succeeding day
that is a Business Day (without any interest or other
payment in respect of any
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such delay) except that, if such Business Day falls
in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each
case with the same force and effect as if made on
such date fixed for redemption. If payment of the
redemption price in respect of any Securities is
improperly withheld or refused and not paid either by
the Trust or by the Sponsor as guarantor pursuant to
the relevant Securities Guarantee, Distributions on
such Securities will continue to accrue at the then
applicable rate, from the original redemption date to
the date of payment, in which case the actual payment
date will be considered the date fixed for redemption
for purposes of calculating the amount payable upon
redemption (other than for purposes of calculating
any premium).
(iv) Redemption/Distribution Notices shall be sent by the
Administrative Trustees on behalf of the Trust to (A)
in the case of Preferred Securities held in
book-entry form, the Depositary and, in the case of
Securities held in certificated form, the Holders of
such certificates and (B) in respect of the Common
Securities, the Holder thereof.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.
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5. Conversion Rights.
The Holders of Securities shall have the right at any time
prior to 5:00 p.m., New York City time, on April 15, 2028
(except that Preferred Securities called for redemption by the
Sponsor will be convertible at any time prior to 5:00 p.m.,
New York City time, on any Redemption Date), at their option,
to cause the Conversion Agent to convert Securities, on behalf
of the converting Holders, into shares of Common Stock in the
manner described herein on and subject to the following terms
and conditions:
(a) The Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of
Common Stock pursuant to the Holder's direction to the
Conversion Agent to exchange such Securities for a portion of
the Debentures theretofore held by the Trust on the basis of
one Security per $50 principal amount of Debentures, and
immediately convert such amount of Debentures into fully paid
and nonassessable shares of Common Stock at an initial rate of
1.7058 shares of Common Stock per $50 principal amount of
Debentures (which is equivalent to a conversion price of
$29-5/16 per share of Common Stock, subject to certain
adjustments set forth in the Indenture (as so adjusted,
"Conversion Price")).
(b) In order to convert Securities into Common Stock the Holder
shall submit to the Conversion Agent at the office referred to
above an irrevocable request to convert Securities on behalf
of such Holder (the "Conversion Request"), together, if the
Securities are in certificated form, with such certificates.
Holders may obtain copies of the required form of the
conversion request from the Conversion Agent. The Conversion
Request shall (i) set forth the number of Securities to be
converted and the name or names, if other than the Holder, in
which the shares of Common Stock should be issued and (ii)
direct the Conversion Agent (a) to exchange such Securities
for a portion of the Debentures held by the Trust (at the rate
of exchange specified in the preceding paragraph) and (b) to
convert such Debentures on behalf of such Holder, into Common
Stock (at the conversion rate specified
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in the preceding paragraph). The Conversion Agent shall notify
the Trust of the Holder's election to exchange Securities for
a portion of the Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion
Agent the appropriate principal amount of Debentures for
exchange in accordance with this Section. The Conversion Agent
shall thereupon notify the Sponsor of the Holder's election to
convert such Debentures into shares of Common Stock. Holders
of Securities at the close of business on a Distribution
record date will be entitled to receive the Distribution
payable on such Securities on the corresponding Distribution
payment date notwithstanding the conversion of such Securities
following such record date but prior to such distribution
payment date. Except as provided above, neither the Trust nor
the Sponsor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions, whether or not in
arrears, accrued on the Securities (including any Additional
Amounts accrued thereon) surrendered for conversion, or on
account of any accumulated and unpaid dividends on the shares
of Common Stock issued upon such conversion, except to the
extent that such Shares of Common Stock are held of record on
the record date for any such distribution. Securities shall be
deemed to have been converted immediately prior to the close
of business on the day on which a Notice of Conversion
relating to such Securities is received by the Conversion
Agent in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive
the Common Stock issuable upon conversion of the Debentures
shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor shall
issue and deliver at the office of the Conversion Agent a
certificate or certificates for the number of full shares of
Common Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same, unless
otherwise directed by the Holder in the notice of conversion
and the Conversion Agent shall
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distribute such certificate or certificates to such Person or
Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
The Bank of New York "Conversion Agent" for the purpose of
effecting the conversion of Securities in accordance with this
Section. In effecting the conversion and transactions
described in this Section, the Conversion Agent shall be
acting as agent of the Holders of Securities directing it to
effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to exchange Securities from time to time
for Debentures held by the Trust in connection with the
conversion of such Securities in accordance with this Section
and (ii) to convert all or a portion of the Debentures into
Common Stock and thereupon to deliver such shares of Common
Stock in accordance with the provisions of this Section and to
deliver to the Trust a new Debenture or Debentures for any
resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional
interest will be paid in cash based on the current market
value of the Common Stock, by the Sponsor to the Trust, which
in turn will make such payment to the Holder or Holders of
Securities so converted.
(e) The Sponsor shall at all times reserve and keep available out
of its authorized and unissued Common Stock, solely for
issuance upon the conversion of the Debentures, free from any
preemptive or other similar rights, such number of shares of
Common Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled
to deliver upon conversion of Debentures, shares of Common
Stock reacquired and held in the treasury of the Sponsor (in
lieu of the issuance of authorized and unissued shares of
Common Stock), so long as any such treasury shares are free
and clear of all liens, charges, security interests or
encumbrances. Any shares of Common Stock issued upon
conversion of the Debentures shall be duly authorized, validly
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issued and fully paid and nonassessable. The Trust shall
deliver the shares of Common Stock received upon conversion of
the Debentures to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except
for United States withholding taxes. Each of the Sponsor and
the Trust shall prepare and shall use its best efforts to
obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and
shall comply with all applicable requirements as to
registration or qualification of the Common Stock (and all
requirements to list the Common Stock issuable upon conversion
of Debentures that are at the time applicable), in order to
enable the Sponsor to lawfully issue Common Stock to the Trust
upon conversion of the Debentures and the Trust to lawfully
deliver the Common Stock to each Holder upon conversion of the
Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on
conversion of Debentures and the delivery of the shares of
Common Stock by the Trust upon conversion of the Securities.
The Sponsor 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 Securities so converted were
registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the
Trust the amount of any such tax, or has established to the
satisfaction of the Trust that such tax has been paid.
(g) Nothing in the preceding paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the
terms of the Securities or as set forth in this Annex I to the
Declaration or to the Declaration itself or otherwise require
the Property Trustee or the Trust to pay any amounts on
account of such withholdings.
6. VOTING RIGHTS - PREFERRED SECURITIES.
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(a) Except as provided under paragraphs 6(b) and 8, in the
Business Trust Act and as otherwise required by law, the
Declaration and the Indenture, the Holders of the Preferred
Securities will have no voting rights.
(b) In addition to the rights of the Holders of the Preferred
Securities with respect to the enforcement of payment of
principal and interest on the Debentures set forth herein, in
the Declaration or in the Indenture, if (i) an Event of
Default under the Indenture occurs and is continuing or (ii)
the Company defaults under the Guarantee (each of (i) and (ii)
being an "Appointment Event"), then the Holders of the
Preferred Securities, acting as a single class, will be
entitled by the vote of a Majority in liquidation amount of
the Preferred Securities to appoint a Special Trustee in
accordance with Section 5.06(a)(ii)(B) of the Declaration. Any
Holder of Preferred Securities (other than the Sponsor, or any
entity directly or indirectly controlling or controlled by or
under direct or indirect common control with the Sponsor) will
be entitled to nominate any Person to be appointed as Special
Trustee. Not later than 30 days after such right to appoint a
Special Trustee arises, the Trustees will convene a meeting of
the Holders of the Preferred Securities for the purpose of
appointing a Special Trustee. If the Trustees fail to convene
such meeting within such 30-day period, the Holders of not
less than 10% in aggregate liquidation amount of the Preferred
Securities will be entitled to convene such meeting in
accordance with Section 12.02 of the Declaration. The record
date for such meeting will be the close of business on the
Business Day that is one Business Day before the day on which
notice of the meeting is sent to the Holders. The provisions
of the Declaration relating to the convening and conduct of
the meetings of the Holders will apply with respect to any
such meeting.
Any Special Trustee so appointed shall cease to be a Special
Trustee if the Appointment Event pursuant to which the Special Trustee was
appointed and all other Appointment Events cease to be continuing. A Special
Trustee may be removed without cause at any time by vote of the Holders of a
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Majority in liquidation amount of the Preferred Securities at a meeting of the
Holders of the Preferred Securities in accordance with Section 5.06(a)(ii)(B) of
the Declaration. The Holders of 10% in liquidation amount of the Preferred
Securities will be entitled to convene such a meeting in accordance with Section
12.02 of the Declaration. The record date for such meeting will be the close of
business on the Business Day which is one Business Day before the day on which
the notice of meeting is sent to Holders. Notwithstanding the appointment of a
Special Trustee, the Sponsor shall retain all rights under the Indenture,
including the right to defer payments of interest by extending the interest
payment period on the Debentures.
Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities, voting
separately as a class may, and the Trustees shall not, without obtaining the
prior approval of the Holders of a Majority in liquidation amount of all
outstanding Preferred Securities (i) direct the time, method, and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred upon the Property Trustee with respect to
the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 5.13 of the Indenture or otherwise, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, provided, however, that, where a consent under the Indenture would
require the consent or act of each holder of the Debentures affected thereby (a
"Super Majority"), the Property Trustee may not give such consent or take such
action without the prior consent of each Holder of the Preferred Securities. The
Property Trustee shall not, and none of the other Trustees shall in any event,
revoke any action previously authorized or approved by a vote of the Holders of
the Preferred Securities, except by a subsequent vote of the Holders of the
Preferred Securities. The Property Trustee shall notify each holder of Preferred
Securities of any notice of default with respect to the Debentures. Other than
with respect to directing the time, method and place of conducting any remedy
available to the Property Trustee or the Debenture Trustee as set forth above,
the Property Trustee shall not take any action in accordance with the directions
of the Holders of the Preferred Securities under this paragraph unless the
Property Trustee has been provided with an opinion of tax counsel to the effect
that, as a result of such action,
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20
the Trust will not fail to be classified as a grantor trust for United States
Federal income tax purposes.
If the Property Trustee is the sole holder of the Debentures,
any Holder of the Preferred Securities shall, to the fullest extent permitted by
law, have the right to institute suit on behalf of the Trust for the enforcement
of the right to receive payment of the principal of and interest on the
Debentures on or after the Stated Maturity (as defined in the Indenture) of such
Debentures or, in the case of redemption, on the Redemption Date (as defined in
the Indenture), and the right to convert the Debentures in accordance with the
Indenture. In addition, the Holders of at least 25% in aggregate liquidation
amount of Preferred Securities outstanding shall be entitled to institute any
other proceeding in the event the Debenture Trustee or the Property Trustee
fails to do so in accordance with the terms of the Indenture.
In addition to any other rights of the Holders provided herein
or in the Declaration, if the Property Trustee fails to enforce its rights, as
holder of the Debentures, under the Indenture, any Holder of Preferred
Securities may, after a period of 30 days has elapsed from such Holder's written
request to the Property Trustee to enforce such rights and to the fullest extent
permitted by law, institute a legal proceeding directly against the Sponsor, to
enforce the rights of the Property Trustee, as holder of the Debentures, under
the Indenture, without first instituting any legal proceeding against the
Property Trustee or any other Person.
Any approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Securities in the Trust
or pursuant to written consent. The administrative Trustees will cause a notice
of any meeting at which Holders of Preferred Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Preferred Securities. Each such
notice will include a statement setting forth the following information (i) the
date of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
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No vote or consent of the Holders of the Preferred Securities
will be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned by the Sponsor or any Affiliate of
the Sponsor shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the
Business Trust Act and as otherwise required by law and the
Declaration, the Holders of the Common Securities will have no
voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to
appoint, remove or replace any Trustee, subject to the
exclusive right of the Holders of the Preferred Securities to
appoint, remove or replace a Special Trustee.
(c) Subject to Section 2.06 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has
been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph,
the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred
on the Property Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable
under Section 6.06 of the Indenture, or (iii) exercise any
right to
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rescind or annul a declaration that the principal of all the
Debentures shall be due and payable, provided that, where a
consent or action under the Indenture would require the
consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super
Majority"), the Property Trustee may only give such consent or
take such action at the direction of the Holders of at least
the proportion in liquidation amount of the Common Securities
which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to
this paragraph 7(c), the Property Trustee shall not revoke any
action previously authorized or approved by a vote of the
Holders of the Common Securities, except by a subsequent vote
of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the
Holders of the Common Securities under this paragraph unless
the Property Trustee has been provided with an opinion of tax
counsel to the effect that, as a result of such action the
Trust will not fail to be classified as a grantor trust for
United States Federal income tax purposes. If the Property
Trustee fails to enforce its rights, as holder of the
Debentures, under the Indenture, any Holder of Common
Securities may, after a period of 30 days has elapsed from
such Holder's written request to the Property Trustee to
enforce such rights and to the fullest extent permitted by
law, institute a legal proceeding directly against the
Sponsor, to enforce the Property Trustee's rights, as holder
of the Debentures, under the Indenture, without first
instituting any legal proceeding against the Property Trustee
or any other Person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders
of Securities in the Trust or pursuant to written consent. The
Administrative Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of
any matter
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23
upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Common
Securities. Each such notice will include a statement setting
forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of
proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common
Securities or to distribute the Debentures in accordance with
the Declaration and the terms of the Securities.
8. Amendments to Declaration and Indenture.
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(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration
provides for, or the Administrative Trustees otherwise propose
to effect, (i) any action that would adversely affect the
powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise,
or (ii) the dissolution, winding-up or termination of the
Trust, other than as described in Section 8.01 of the
Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal
(but not on any other amendment or proposal) and such
amendment or proposal shall not be effective except with the
approval of the Holders of at least 66-2/3% in liquidation
amount of the Securities, voting together as a single class
provided, however, that, the rights of Holders of Preferred
Securities under Article V of the Declaration to appoint,
remove or replace a Special Trustee shall not be amended
without the consent of each Holder of Preferred Securities;
provided, however, if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred
Securities or only the Common Securities, then only the
affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective
except with the approval of 66-2/3% in liquidation amount of
such class of Securities.
(b) In the event the consent of the Property Trustee as the holder
of the Debentures is required under the Indenture with respect
to any amendment, modification or termination of the Indenture
or the Debentures, the Property Trustee shall request the
direction of the Holders of the Securities with respect to
such amendment, modification or termination and shall vote
with respect to such amendment, modification or termination as
directed by at least the same proportion in aggregate stated
liquidation amount of the Securities; provided, however, that
the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Securities under
this paragraph 8(b) unless the Property Trustee has been
provided with an opinion of tax counsel to the effect that for
the purposes of United States Federal income tax
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the Trust will not be classified as other than a grantor trust
on account of such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, on any distribution date or redemption date
an Event of Default under the Declaration (or an event that, with notice or
passage of time, would become an Event of Default under the Indenture) has
occurred and is continuing, in which case no payment of any distribution on, or
amount payable upon redemption of, any Common Security, and no other payment on
account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all outstanding Preferred Securities for all
distribution periods terminating on or prior thereto, or in the case of payment
of the amount payable upon redemption of the Preferred Securities, the full
amount of such amount in respect of all outstanding Preferred Securities shall
have been made or provided for, and all funds available to the Property Trustee
shall first be applied to the payment in full in cash of all distributions on,
or the amount payable upon redemption of Preferred Securities then due and
payable.
10. Ranking.
The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
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26
11. Acceptance of Securities Guarantees and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Declaration, the
Preferred Securities, the Common Securities, the Preferred Securities Guarantee
and the Common Securities Guarantee, respectively, including the subordination
provisions therein and to the provisions of the Indenture which includes, among
other things, provisions relating to certain rights of the Holders of the
Preferred Securities all as set forth therein.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or
other similar rights to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request to
the Sponsor at its principal place of business.
111
EXHIBIT A-1
FORM OF
PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all
Restricted Preferred Securities, including Rule 144A Global Preferred
Securities, Regulation S Definitive Preferred Securities and institutional
"accredited investors" Definitive Preferred Securities unless otherwise
determined by the Sponsor in accordance with applicable law --THIS SECURITY (OR
ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY AND ANY CONVERTIBLE JUNIOR SUBORDINATED
DEBENTURES ISSUABLE UPON EXCHANGE THEREFOR AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144, (II) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.]
[Include if Preferred Security is a Restricted Definitive
Preferred Security --IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
112
REGISTRAR AND TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.]
[Include if Preferred Security is in global form and the
Depository Trust Company is the Depository -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW. TRANSFER OF BENEFICIAL INTERESTS IN THE GLOBAL PREFERRED SECURITIES WILL
BE SUBJECT TO THE APPLICABLE RULES AND PROCEDURES OF THE DEPOSITARY AND ITS
DIRECT OR INDIRECT PARTICIPANTS WHICH MAY CHANGE FROM TIME TO TIME.]
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3
Certificate Number Number of Preferred Securities
[CUSIP NO. [ ]]
Preferred Securities
of
Coltec Capital Trust
5 1/4% Convertible Preferred Securities
Term Income Deferrable Equity Securities (TIDES)(SM)*
(liquidation amount $50 per Convertible Preferred Security)
Coltec Capital Trust, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 5 1/4% Convertible Preferred Securities, Term Income Deferrable
Equity Securities (TIDES)(SM)*(liquidation amount $50 per Convertible Preferred
Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of April 14, 1998, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred
- --------
*The terms Term Income Deferrable Equity Securities (TIDES)(SM) and TIDES(SM)
are registered servicemarks of Credit Suisse First Boston Corporation.
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4
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Preferred Securities Guarantee and the Indenture to
a Holder without charge upon written request to the Trust at its principal place
of business.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
Federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
115
5
Unless the Property Trustee's Certificate of Authentication
hereon has been properly executed, these Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate
this day of , .
Coltec Capital Trust
By: _____________________________________
Name:
Title:
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: , .
THE BANK OF NEW YORK,
as Property Trustee
By: _________________________________
Authorized Signatory
116
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed
at a rate per annum of 5 1/4% (the "Coupon Rate") of the stated liquidation
amount of $50 per Preferred Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the
Preferred Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears, on January 15, April 15, July
15 and October 15 of each year, commencing on July 15, 1998, to Holders of
record one at the close of business on the next preceding January 1, April 1,
July 1 and October 1, which payment dates shall correspond to the interest
payment dates on the Debentures. Accrued Distributions not paid on the
applicable distribution date will accrue additional Distributions on the amount
thereof (to the extent permitted by law), compounded quarterly from the relevant
distribution date. So long as no Debenture Event of Default has occurred and is
continuing, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period from time to time
on the Debentures for a period not exceeding 20 consecutive quarters (each a
"Deferral Period"); provided that no Deferral Period may extend beyond April 15,
2028, and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such
117
2
Deferral Period to the date of payment. Prior to three Business Days before a
Regular Record Date fixed for a Payment Resumption Date as defined in the
Indenture, the Debenture Issuer may further extend such Deferral Period;
provided that such Deferral Period together with all such previous and further
deferrals thereof may not exceed 20 consecutive quarters or extend beyond the
maturity (whether at the stated maturity or by declaration of acceleration, call
for redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the Regular Record Date for the relevant Payment
Resumption Date. A Deferral Period will terminate upon the payment by the
Sponsor of all amounts then accrued and unpaid on the Debentures (together with
interest thereon compounded quarterly) to the extent permitted by applicable
law. Upon the termination of any Deferral Period and the payment of all amounts
then due, the Debenture Issuer may commence a new Deferral Period, subject to
the above requirements. There is no limitation on the number of times that the
Sponsor may elect to begin a Deferral Period.
The Preferred Securities shall be redeemable as provided in
the Declaration.
The Preferred Securities shall be convertible into shares of
Common Stock, through (i) the exchange of Preferred Securities for a portion of
the Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
118
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Coltec Capital Trust
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into Common Stock of COLTEC INDUSTRIES INC (the
"Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (as amended from time to time, the "Declaration"), dated as
of April 14, 1998, by David D. Harrison, Robert J. Tubbs and Thomas B. Jones,
Jr. as Administrative Trustees, The Bank of New York (Delaware), as Delaware
Trustee, The Bank of New York, as Property Trustee, Coltec Industries Inc, as
Sponsor, and by the Holders, from time to time, of individual beneficial
interests in the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Preferred Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Preferred Securities set
forth as Annex I to the Declaration) and (ii) immediately convert such
Debentures, on behalf of the undersigned, into Common Stock (at the conversion
rate specified in the terms of the Preferred Securities set forth as Annex I to
the Declaration).
The undersigned does also hereby direct the Conversion Agent
that the shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
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2
Any holder, upon the exercise of its conversion rights in
accordance with the terms of the Declaration and the Preferred Securities,
agrees to be bound by the terms of the Registration Rights Agreement relating to
the Common Stock issuable upon conversion of the Preferred Securities.
Date: ____________, ____
in whole in part
Number of Preferred Securities
to be converted:
If a name or names other than
the undersigned, please
indicate in the spaces below
the name or names in which the
shares of Common Stock are to
be issued, along with the
address or addresses of such
person or persons
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
Signature (for conversion only)
Please Print or Type Name and
Address, Including Zip Code,
and Social Security or Other
Identifying Number
_____________________________________________
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3
_____________________________________________
_____________________________________________
Signature Guarantee:** _____________________
- ----------
** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
121
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
agent to transfer this Preferred Security on the books of the Trust. The agent
may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:***
- ----------
*** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
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2
_____________________
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES
This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.
(A) The undersigned (check one box below):
/ / has requested the Property Trustee by written order to deliver in
exchange for its beneficial interest in the Rule 144A Global Preferred
Security held by the Depositary a Preferred Security or Preferred
Securities in definitive, registered form in such number equal to its
beneficial interest in such Rule 144A Global Preferred Security (or the
number thereof indicated above); or
/ / has requested the Property Trustee by written order to exchange its
Preferred Security in definitive registered form for an interest in the
Rule 144A Global Preferred Security held by the Depositary in such
number equal to number of Preferred Securities in definitive registered
form so held; or
/ / has requested the Property Trustee by written order to exchange or
register the transfer of a Preferred Security or Preferred Securities.
(B) The undersigned confirms that such Securities are being (check one box
below):
(1) / / acquired for the undersigned's own account, without
transfer (in satisfaction of Section 9.02(d)(ii)(A)
of the Declaration; or
(2) / / transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(3) / / transferred pursuant to Rule 144 of the Securities
Act of 1933; or
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(4) / / transferred pursuant to an effective registration
statement under the Securities Act.
Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other than the registered Holder thereof; provided,
however, that if box (3) is checked, the Property Trustee may require, prior to
registering any such transfer of the Preferred Securities such legal opinions,
certifications and other information as the Trust has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, such as the exemption provided by Rule 144 under such Act.
Signature
Signature Guarantee:****
- ----------
**** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
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Signature must be guaranteed Signature
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
these Preferred Securities 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 Trust 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
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EXHIBIT A-2
FORM OF
COMMON SECURITY
[FORM OF FACE OF SECURITY]
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE
REGISTRATION STATEMENT.]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF COLTEC INDUSTRIES INC]
Certificate Number Number of Common Securities
Common Securities
of
Coltec Capital Trust
[5 1/4]% Convertible Common Securities
(liquidation amount $50 per Convertible Common Security)
Coltec Capital Trust, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
COLTEC INDUSTRIES INC
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the [5 1/4]% Convertible Common Securities (liquidation amount $50
per Convertible Common
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Security) (the "Common Securities"). The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of April 14, 1998, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Common Securities as set forth in Annex I to the
Declaration. Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Common Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Reference is hereby made to select provisions of the Common
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States
federal income tax purposes the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
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3
IN WITNESS WHEREOF, the Trust has executed this certificate
this _________ day of _________ , 199__ .
Coltec Capital Trust
By: _____________________________________
Name:
Title:
128
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of [51/4]% (the "Coupon Rate") of the stated liquidation amount
of $50 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the
Preferred Securities will be cumulative, will accrue from the date of original
issuance and will be payable quarterly in arrears, on January 15, April 15, July
15 and October 15 of each year, commencing on July 15, 1998, to Holders of
record one on the next preceding January 1, April 1, July 1 and October 1, which
payment dates shall correspond to the interest payment dates on the Debentures.
Accrued Distributions not paid on the applicable distribution date will accrue
additional Distributions on the amount thereof (to the extent permitted by law),
compounded quarterly from the relevant distribution date. So long as no
Debenture Event of Default has occurred and is continuing, the Debenture Issuer
has the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each a "Deferral Period"); provided that no
Deferral Period may extend beyond April 15, 2028, and, as a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Deferral Period to the date of payment. Prior to three Business Days before
a Regular Record
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2
Date fixed for a Payment Resumption Date as defined in the Indenture, the
Debenture Issuer may further extend such Deferral Period; provided that such
Deferral Period together with all such previous and further deferrals thereof
may not exceed 20 consecutive quarters or extend beyond the maturity (whether at
the stated maturity or by declaration of acceleration, call for redemption or
otherwise) of the Debentures under the Indenture. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the Regular Record Date for the relevant Payment Resumption
Date. A Deferral Period will terminate upon the payment by the Sponsor of all
amounts then accrued and unpaid on the Debentures (together with interest
thereon compounded quarterly) to the extent permitted by applicable law. Upon
the termination of any Deferral Period and the payment of all amounts then due,
the Debenture Issuer may commence a new Deferral Period, subject to the above
requirements. There is no limitation on the number of times that the Sponsor may
elect to begin a Deferral Period.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of
Common Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
130
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Coltec Capital Trust
The undersigned owner of these Common Securities hereby
irrevocably exercises the option to convert these Common Securities, or the
portion below designated, into Common Stock of COLTEC INDUSTRIES INC (the
"Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (as amended from time to time, the "Declaration"), dated as
of April 14, 1998, by David D. Harrison, Robert J. Tubbs and Thomas B. Jones, as
Administrative Trustees, The Bank of New York (Delaware), as Delaware Trustee,
The Bank of New York, as Property Trustee, Coltec Industries Inc, as Sponsor,
and by the Holders, from time to time, of individual beneficial interests in the
Trust to be issued pursuant to the Declaration. Pursuant to the aforementioned
exercise of the option to convert these Common Securities, the undersigned
hereby directs the Conversion Agent (as that term is defined in the Declaration)
to (i) exchange such Common Securities for a portion of the Debentures (as that
term is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Common Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Common Stock (at the conversion rate specified in the terms of
the Common Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent
that the shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the 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.
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2
Any holder, upon the exercise of its conversion rights in
accordance with the terms of the Declaration and the Common Securities, agrees
to be bound by the terms of the Registration Rights Agreement relating to the
Common Stock issuable upon conversion of the Common Securities.
Date: ____________, ____
in whole __ in part __
Number of Common Securities to be
converted:
____________________________________
If a name or names other than
the undersigned, please indicate in
the spaces below the name or names
in which the shares of Common Stock
are to be issued, along with the
address or addresses of such person
or persons
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
_________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identifying
Number
_________________________________________
_________________________________________
_________________________________________
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Signature Guarantee:* _______________
- ----------
* (Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
133
______________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ______________________________________________________
_______________________________________________________________________________
agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _______________________
Signature: ____________________________________________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee**: ________________________________________________________
- ----------
** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)