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EXHIBIT 10.34
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AMENDED AND RESTATED DECLARATION
OF TRUST
FEDERAL-MOGUL FINANCING TRUST
Dated as of December 1, 1997
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1 INTERPRETATION AND DEFINITIONS
SECTION 1.01. Definitions.............................................................2
ARTICLE 2 TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act: Application.......................................10
SECTION 2.02. Lists of Holders of Securities.........................................10
SECTION 2.03. Reports by the Institutional Trustee...................................11
SECTION 2.04. Periodic Reports to Institutional Trustee..............................11
SECTION 2.05. Evidence of Compliance with Conditions.................................11
SECTION 2.06. Events of Default; Waiver..............................................12
SECTION 2.07. Event of Default: Notice...............................................14
ARTICLE 3 ORGANIZATION
SECTION 3.01. Name...................................................................14
SECTION 3.02. Office.................................................................15
SECTION 3.03. Issuance of Trust Securities...........................................15
SECTION 3.04. Purchase of Debentures.................................................15
SECTION 3.05. Purpose................................................................16
SECTION 3.06. Title to Property of the Trust.........................................16
SECTION 3.07. Authorization to Enter into Certain Transactions.......................16
SECTION 3.08. Prohibition of Actions by the Trust,
the Trustees and the Administrators....................................22
SECTION 3.09. Certain Duties and Responsibilities of the
Institutional Trustee..................................................23
SECTION 3.10. Certain Rights of Institutional Trustee................................26
SECTION 3.11. Delaware Trustee.......................................................29
SECTION 3.12. Execution of Documents.................................................29
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.................29
SECTION 3.14. Duration of Trust......................................................29
SECTION 3.15. Mergers................................................................29
ARTICLE 4 SPONSOR
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SECTION 4.01. Sponsor's Purchase of Common Securities................................31
SECTION 4.02. Responsibilities of the Sponsor........................................31
ARTICLE 5 TRUSTEES AND ADMINISTRATORS
SECTION 5.01. Number of Trustees and Administrators..................................32
SECTION 5.02. Delaware Trustee; Eligibility..........................................33
SECTION 5.03. Institutional Trustee; Eligibility.....................................33
SECTION 5.04. Certain Qualifications of Administrators and the
Delaware Trustee Generally.............................................34
SECTION 5.05. Initial Administrators.................................................34
SECTION 5.06. Delaware Trustee.......................................................34
SECTION 5.07. Appointment, Removal and Resignation of Trustees and Administrators....35
SECTION 5.08. Vacancies among Trustees...............................................36
SECTION 5.09. Effect of Vacancies....................................................36
SECTION 5.10. Meetings...............................................................37
SECTION 5.11. Delegation of Power....................................................37
SECTION 5.12. Merger, Conversion, Consolidation or Succession to Business............38
ARTICLE 6 DISTRIBUTIONS
SECTION 6.01. Distributions..........................................................38
ARTICLE 7 ISSUANCE OF SECURITIES
SECTION 7.01. General Provisions Regarding Securities................................39
SECTION 7.02. Execution and Authentication...........................................39
SECTION 7.03. Form and Dating........................................................40
SECTION 7.04. Paying Agent, Registrar and Conversion Agent...........................40
ARTICLE 8 DISSOLUTION OF TRUST
SECTION 8.01. Dissolution of Trust...................................................42
ARTICLE 9 TRANSFER OF INTERESTS
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SECTION 9.01. Transfer of Securities.................................................43
SECTION 9.02. Transfer of Certificates...............................................47
SECTION 9.03. Deemed Holders.........................................................48
SECTION 9.04. Book Entry Interests...................................................48
SECTION 9.05. Notices to Clearing Agency.............................................49
SECTION 9.06. Appointment of Successor Clearing Agency...............................50
SECTION 9.07. Definitive Convertible Preferred Security Certificates
Under Certain Circumstances............................................50
SECTION 9.08. Mutilated, Destroyed, Lost or Stolen Certificates......................51
ARTICLE 10 LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
OTHERS
SECTION 10.01. Liability.............................................................52
SECTION 10.02. Exculpation...........................................................52
SECTION 10.03. Fiduciary Duty........................................................53
SECTION 10.04. Indemnification.......................................................54
SECTION 10.05. Outside Business......................................................57
ARTICLE 11 ACCOUNTING
SECTION 11.01. Fiscal Year...........................................................58
SECTION 11.02. Certain Accounting Matters............................................58
SECTION 11.03. Banking...............................................................59
SECTION 11.04. Withholding...........................................................59
ARTICLE 12 AMENDMENTS AND MEETINGS
SECTION 12.01. Amendments............................................................59
SECTION 12.02. Meetings of the Holders of Securities; Action by Written Consent......62
ARTICLE 13 REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE
TRUSTEE
SECTION 13.01. Representations and Warranties of Institutional Trustee...............63
SECTION 13.02. Representations and Warranties of Delaware Trustee....................64
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ARTICLE 14 MISCELLANEOUS
SECTION 14.01. Notices...............................................................65
SECTION 14.02. Governing Law.........................................................67
SECTION 14.03. Intention of the Parties..............................................67
SECTION 14.04. Headings..............................................................67
SECTION 14.05. Successors and Assigns................................................67
SECTION 14.06. Partial Enforceability................................................67
SECTION 14.07. Counterparts..........................................................67
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
FEDERAL-MOGUL FINANCING TRUST
December 1, 1997
AMENDED AND RESTATED DECLARATION OF TRUST (this "DECLARATION") dated
and effective as of December 1, 1997, by the Trustees (as defined herein), the
Administrators (as defined herein), the Sponsor (as defined herein) and by the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor created Federal-Mogul Financing
Trust (the "TRUST"), a statutory business trust under the Delaware Business
Trust Act pursuant to a Declaration of Trust dated as of November 21, 1997 (the
"ORIGINAL DECLARATION"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on November 21 , 1997, for the sole purposes of
(i) issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust, (ii) investing the proceeds thereof in
certain Debentures of the Debenture Issuer and (iii) engaging in only those
other activities necessary or incidental thereto;
WHEREAS, the parties hereto, 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 statutory business trust under the Business Trust Act
and that this Declaration constitute the governing instrument of such statutory
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 and in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
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SECTION 1.1. Definitions
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration and each Annex and Exhibit hereto, as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act (as defined herein) has
the same meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"ADMINISTRATORS" means each of Thomas W. Ryan, David A. Bozynski and
Diane L. Kaye, solely in such Person's capacity as Administrator of the Trust
and not in such Person's individual capacity, or such Administrator's successor
in interest in such capacity, or any successor appointed as herein provided.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"AGENT" means any Paying Agent or Conversion Agent.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized to
bind such Person; provided, that the Authorized Officer signing an Officers'
Certificate given pursuant to Section 314(a)(4) of the Trust Indenture Act shall
be the principal executive, financial or accounting officer of such Person.
"BASE INDENTURE" means the Indenture dated as of December 1, 1997,
among the Debenture Issuer and the Debenture Trustee, as modified or amended
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from time to time.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Certificate registered in the name of the Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.04.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York, New York are permitted or
required by any applicable law to close.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss.3801 et seq., as it may be amended from time to time, or any
successor legislation.
"CERTIFICATE" means a Common Security Certificate or a Convertible
Preferred Security Certificate.
"CLEARING AGENCY" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Convertible Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and that
shall undertake to effect book entry transfers and pledges of the Convertible
Preferred Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means December 1, 1997.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITY" has the meaning specified in Section 7.01.
"COMMON SECURITIES GUARANTEE" means the guarantee agreement to be dated
as of the date hereof, as modified or amended from time to time, of the Sponsor
in respect of the Common Securities.
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"COMMON SECURITY CERTIFICATE" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"COMMON STOCK" means the common stock of Federal-Mogul Corporation, a
Michigan corporation, without par value and any other shares of common stock as
may constitute "Common Stock" under the Indenture.
"COMPANY INDEMNIFIED PERSON" means (a) any Administrator; (b) any
Affiliate of any Administrator; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Administrator; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"CONVERSION AGENT" has the meaning specified in Section 7.04.
"CONVERTIBLE PREFERRED SECURITIES GUARANTEE" means the guarantee
agreement to be dated as of the date hereof, as modified or amended from time to
time, of the Sponsor in respect of the Convertible Preferred Securities.
"CONVERTIBLE PREFERRED SECURITY" has the meaning specified in Section
7.01.
"CONVERTIBLE 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 Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"CONVERTIBLE PREFERRED SECURITY CERTIFICATE" means a definitive
certificate representing a Preferred Security substantially in the form of
Exhibit A-1.
"CORPORATE TRUST OFFICE" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at 101 Barclay Street, Floor 21 West, New
York, New York 10286.
"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.
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"DEBENTURE ISSUER" means Federal-Mogul Corporation, a Michigan
corporation, in its capacity as issuer of the Debentures under the Indenture.
"DEBENTURE TRUSTEE" means The Bank of New York, 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 Institutional Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.01.
"DIRECT ACTION" has the meaning set forth in Section 3.07(a)(vi).
"DISTRIBUTION" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"EVENT OF DEFAULT" in respect of the Securities means an Event of
Default as defined in the Indenture in respect of the Debentures that has
occurred and is continuing.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"FIDUCIARY INDEMNIFIED PERSON" has the meaning set forth in Section
10.04(b).
"FISCAL YEAR" has the meaning set forth in Section 11.01.
"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.04.
"HOLDER" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"INDEMNIFIED PERSON" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"INDENTURE" means the Base Indenture as supplemented by the
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Supplemental Indenture and as may be further supplemented from time to time.
"INSTITUTIONAL TRUSTEE" has the meaning set forth in Section 5.01.
"INSTITUTIONAL TRUSTEE ACCOUNT" has the meaning set forth in Section
3.07(a)(ii)(A).
"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.
"INVESTMENT COMPANY EVENT" has the meaning set forth in Annex I hereto.
"LEGAL ACTION" has the meaning set forth in Section 3.07(a)(vi).
"LIQUIDATION DISTRIBUTION" has the meaning specified in the terms of
the Securities as set forth in Annex I.
"MAJORITY IN LIQUIDATION AMOUNT" of the Securities means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Convertible
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.
"NON-U.S. PERSON" means a Person other than a U.S. person (as such term
is defined in Regulation S).
"OFFER" means the recommended cash offer announced by the boards of
directors of the Sponsor and T&N plc ("T&N") on October 16, 1997 to be made on
behalf of a wholly-owned indirect subsidiary of the Sponsor to acquire the
entire issued share capital of T&N.
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"OFFERING MEMORANDUM" has the meaning set forth in Section 4.02(a).
"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:
(i) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Certificate;
(iii) 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
(iv) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"OPTION CLOSING DATE" means the date of closing of any sale of
Additional Securities (as defined in the Purchase Agreement).
"PAYING AGENT" has the meaning specified in Section 7.04.
"PAYMENT AMOUNT" has the meaning set forth in Section 6.01.
"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.
"PURCHASE AGREEMENT" means the Purchase Agreement for the offering and
sale of Convertible Preferred Securities in the form of Exhibit C.
"PORTAL MARKET" means the Private Offerings, Resales and Trading
through Automated Linkages Market operated by the National Association of
Securities Dealers, Inc., or any successor thereto.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
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"QUORUM" means a majority of the Administrators or, if there are only
two Administrators, both of them.
"REGISTRAR" has the meaning set forth in Section 7.04.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of the date hereof among Federal-Mogul Corporation, the Trust
and Morgan Stanley & Co. Incorporated, as Initial Purchaser.
"REGULATION S" means Regulation S under the Securities Act or any
successor provision.
"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 Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional 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 SECURITY" has the meaning specified in Section 9.01(f).
"RULE 144A" means Rule 144A as promulgated under the Securities Act, or
any successor rule.
"RULE 144(K)" means Rule 144(k) as promulgated under the Securities
Act, or any successor rule.
"RULE 3A-5" means Rule 3a-5 as promulgated under the Investment Company
Act, or any successor rule.
"SECURITIES" means the Common Securities and the Convertible Preferred
Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
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"SECURITIES GUARANTEES" means the Common Securities Guarantee and the
Convertible Preferred Securities Guarantee.
"SPECIAL EVENT" has the meaning set forth in Annex I hereto.
"SPONSOR" or "FEDERAL-MOGUL" means Federal-Mogul Corporation, a
Michigan corporation, or any successor entity in a merger, consolidation or
amalgamation, in its capacity as sponsor of the Trust.
"SUCCESSOR DELAWARE TRUSTEE" has the meaning set forth in Section
5.07(b).
"SUCCESSOR INSTITUTIONAL TRUSTEE" has the meaning set forth in Section
5.07(b).
"SUPER MAJORITY" has the meaning set forth in Section 2.06(a)(ii).
"SUPPLEMENTAL INDENTURE" means the First Supplemental Indenture dated
as of December 1, 1997 among the Debenture Issuer and the Debenture Trustee
pursuant to which the Debentures are to be issued, as modified or amended from
time to time.
"TAX EVENT" has the meaning set forth in Annex I hereto.
"10% IN LIQUIDATION AMOUNT" of the Securities means, except as provided
in the terms of the Convertible 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 Convertible Preferred Securities
or Holders of outstanding Common Securities voting separately as a class, who
are the record owners of 10% or more of the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"TRANSFER RESTRICTION TERMINATION DATE" means the first date on which
the Securities and any Common Stock issued or issuable upon the conversion or
exchange thereof (other than (i) Securities acquired by the Trust or any
Affiliate thereof and (ii) Common Stock issued upon the conversion or exchange
of any Security described in clause (i) above) may be sold pursuant to Rule
144(k).
"TREASURY REGULATIONS" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
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States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"TRUSTEE" or "TRUSTEES" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application. (a) This Declaration is
subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration and shall, to the extent applicable, be governed by
such provisions.
(b) The Institutional 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 2.2. Lists of Holders of Securities. (a) Each of the Sponsor
and the Administrators on behalf of the Trust shall provide the Institutional
Trustee (i) within 14 days after each record date for payment of Distributions,
a list in such form as the Institutional 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 Administrators on
behalf of the Trust shall be obligated to provide such List of Holders at any
time the List of
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Holders does not differ from the most recent List of Holders given to the
Institutional Trustee by the Sponsor and the Administrators on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders, a List of Holders as of a date no more
than 14 days before such List of Holders is given to the Institutional Trustee.
The Institutional Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in the capacity as Paying Agent (if acting in such capacity);
provided, that the Institutional Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
Sections 310(b), 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Institutional Trustee. Within 60 days after
May 15 of each year, the Institutional Trustee shall provide to the Holders of
the Convertible Preferred Securities such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The Institutional Trustee
shall also comply with the requirements of Section 313(d) of the Trust Indenture
Act.
SECTION 2.4. Periodic Reports to Institutional Trustee. Each of the
Sponsor and the Administrators on behalf of the Trust shall provide to the
Institutional 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.
Delivery of such reports, information and documents to the
Institutional Trustee is for informational purposes only and the Institutional
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Sponsor's compliance with any of its covenants hereunder
(as to which the Institutional Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 2.5. Evidence of Compliance with Conditions. Each of the
Sponsor and the Administrators on behalf of the Trust shall provide to the
Institutional 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) of the Trust
Indenture Act may be given in the form of an Officers' Certificate.
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SECTION 2.6. Events of Default; Waiver. (a) The Holders of a Majority
in Liquidation Amount of Convertible Preferred Securities may, by vote or
consent, on behalf of the Holders of all of the Convertible Preferred
Securities, waive any past Event of Default in respect of the Convertible
Preferred Securities and its consequences; provided, that if the underlying
Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "SUPER MAJORITY")
to be waived under the Indenture, the Event of Default under this
Declaration may only be waived by the vote or consent of the Holders of
at least the proportion in 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 the Convertible Preferred Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Convertible 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
Convertible Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Convertible Preferred Securities of an Event of
Default with respect to the Convertible Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Event of Default with respect to the Common Securities for all purposes of
this Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote or consent, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences; provided, that if the underlying Event of
Default
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under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under this Declaration as provided below in this Section
2.06(b), the Event of Default under this 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 this Declaration as provided
below in this Section 2.06(b), the Event of Default under this
Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding;
provided further, that notwithstanding (i) or (ii) above, 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 or their
consequences until all Events of Default with respect to the Convertible
Preferred Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Institutional Trustee will be deemed to be acting solely on behalf of the
Holders of the Convertible Preferred Securities and only the Holders of the
Convertible Preferred Securities will have the right to direct the Institutional
Trustee in accordance with the terms of the Securities. The foregoing provisions
of this Section 2.06(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Subject
to the foregoing provisions of this Section 2.06(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
Institutional Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.06(c) shall be in lieu
of
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Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. Event of Default: Notice. (a) The Institutional Trustee
shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders of the Securities, notices of
all defaults with respect to the Securities actually known to a Responsible
Officer of the Institutional Trustee, unless such defaults have been cured
before the giving of such notice (the term "DEFAULTS" for the purposes of this
Section 2.07(a) being hereby defined to be Events of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided, that
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures, the Institutional Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Institutional Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 4.01(a) and 4.01(b) of the
Indenture; or
(ii) a default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of this
Declaration shall have actual knowledge.
ARTICLE 3
ORGANIZATION
SECTION 3.1. Name. The Trust is named "Federal-Mogul Financing Trust"
as such name may be modified from time to time by the Administrators 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
Administrators.
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SECTION 3.2. Office. The address of the principal office of the Trust
is c/o Federal-Mogul Corporation, 26555 Northwestern Highway, Southfield,
Michigan 48034. On ten Business Days written notice to the Holders of
Securities, the Administrators may designate another principal office.
SECTION 3.3. Issuance of Trust Securities. On November 24, 1997, the
Sponsor, on behalf of the Trust and pursuant to the Original Declaration,
executed and delivered the Purchase Agreement. On the Closing Date and
contemporaneously with the execution and delivery of this Declaration, the
Administrators, on behalf of the Trust, shall execute and deliver to (i) the
initial purchaser named in the Purchase Agreement (the "INITIAL PURCHASER"), a
Global Certificate, registered in the name of the nominee of the initial
Clearing Agency as specified in Section 9.04, in an aggregate amount of
10,000,000 Convertible Preferred Securities having an aggregate liquidation
amount of $500,000,000, against receipt of the aggregate purchase price of such
Convertible Preferred Securities of $500,000,000, and (ii) the Sponsor, Common
Securities Certificates, registered in the name of the Sponsor, in an aggregate
amount of 309,279 Common Securities having an aggregate liquidation amount of
$15,463,950, against receipt of the aggregate purchase price of such Common
Securities of $15,463,950. In the event and to the extent the overallotment
option granted by the Trust pursuant to the Purchase Agreement is exercised by
such Initial Purchaser, on the Option Closing Date the Administrators, on behalf
of the Trust, shall execute and deliver to (i) such Initial Purchaser a Global
Certificate, registered in the name of the nominee of the initial Clearing
Agency as specified in Section 9.04, in an aggregate amount of up to 1,500,000
Convertible Preferred Securities having an aggregate liquidation amount of up to
$75,000,000 against receipt of the aggregate purchase price of such Convertible
Preferred Securities of up to $75,000,000, and (ii) the Sponsor, Common Security
Certificates, registered in the name of the Sponsor, in an aggregate amount of
46,392 Common Securities having an aggregate liquidation amount of $2,319,600,
against receipt of the aggregate purchase price of such Common Securities of up
to $2,319,600.
SECTION 3.4. Purchase of Debentures. On the Closing Date and
contemporaneously with the execution and delivery of this Declaration, the
Institutional Trustee, on behalf of the Trust, shall purchase from the Sponsor
with the proceeds received by the Trust from the sale of the Securities on such
date pursuant to Section 3.03, at a purchase price of 100% of the principal
amount thereof, Debentures, registered in the name of the Institutional Trustee
and having an aggregate principal amount equal to $515,463,950, and, in
satisfaction of the purchase price for such Debentures, the Institutional
Trustee, on behalf of the Trust, shall deliver or cause to be delivered to the
Sponsor the sum of
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$515,463,950. In the event the overallotment option granted by the Trust with
respect to the Convertible Preferred Securities pursuant to the Purchase
Agreement is exercised by the Initial Purchaser named therein, on the Option
Closing Date the Administrators, on behalf of the Trust, shall purchase from the
Sponsor with the proceeds received by the Trust from the sale of the Convertible
Preferred Securities on such date pursuant to Section 3.03, at a purchase price
of 100% of the principal amount thereof, additional Debentures, registered in
the name of the Institutional Trustee and having an aggregate principal amount
of up to $77,319,600, and, in satisfaction of the purchase price for such
Debentures, the Administrators, on behalf of the Trust, shall deliver or cause
to be delivered to the Sponsor an amount equal to the aggregate principal amount
being purchased.
SECTION 3.5. 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 3.6. Title to Property of the Trust. Except as provided in
Section 3.07 with respect to the Debentures and the Institutional Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.7. Authorization to Enter into Certain Transactions. (a) The
Trustees and the Administrators shall conduct the affairs of the Trust in
accordance with the terms of this Declaration. Subject to the limitations set
forth in paragraph (b) of this Section, and in accordance with the following
provisions (i) and (ii), the Trustees and the Administrators shall have the
authority to enter into all transactions and agreements determined by the
Trustees and the Administrators to be appropriate in exercising the authority,
express or implied, otherwise granted to the Trustees or the Administrators, as
the case may be, under this Trust Agreement, and to perform all acts in
futherance thereof, including without limitation, the following:
(i) Each Administrator shall have the power and authority to
act on behalf of the Trust with respect to the following matters:
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(A) the issuance and sale of the Securities;
(B) the receipt of the Debentures;
(C) to cause the Trust to enter into, and to execute
and deliver on behalf of the Trust, such agreements as may be
necessary or desirable in connection with the purposes and
function of the Trust, including agreements with the Clearing
Agency, any Registrar, any Transfer Agent and any Paying
Agent;
(D) ensuring compliance with the Securities Act,
applicable state securities or blue sky laws, and assisting in
the compliance with the Trust Indenture Act;
(E) to execute and file one or more registration
statements relating to the Convertible Preferred Securities
contemplated by the Registration Rights Agreement and the
preparation and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(F) to register the Convertible Preferred Securities
under the Exchange Act, as amended, if required, and the
preparation and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(G) assisting in the designation of the Convertible
Preferred Securities for trading in the PORTAL Market;
(H) the sending of notices (other than notices of
default) and other information regarding the Securities and
the Debentures to the Holders in accordance with this
Declaration;
(I) the consent to the appointment of a Paying Agent,
Transfer Agent and Registrar in accordance with this
Declaration, which consent shall not be unreasonably withheld;
(J) execution of the Securities in accordance with
this Declaration;
(K) execution and delivery of closing certificates
pursuant to the Purchase Agreement and the application for a
taxpayer
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identification number;
(L) except as otherwise required by the Business
Trust Act or the Trust Indenture Act, to execute on behalf of
the Trust (either acting along or together with any or all of
the Administrators) any documents that the Administrators have
the power to execute pursuant to this Declaration;
(M) the taking of any action incidental to the
foregoing as the Institutional Trustee may from time to time
determine is necessary or advisable to give effect to the
terms of this Declaration for the benefit of the Holders
(without consideration of the effect of any such action on any
particular Holder);
(N) execution and delivery of letters or documents to
or instruments with DTC relating to the Convertible Preferred
Securities;
(O) execution and delivery of the Registration Rights
Agreement and other related agreements relating to the sale of
the Convertible Preferred Securities;
(P) 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 Convertible Preferred
Securities and Holders of Common Securities as to such actions
and applicable record dates;
(Q) to duly prepare and file all applicable tax
returns and tax information reports that are required to be
filed with respect to the Trust on behalf of the Trust; and
(R) to give prompt written notice to the Holders of
the Securities of any notice received from the Debenture
Issuer of its election to defer payments of interest on the
Debentures by extending the interest payment period under the
Indenture.
(ii) As among the Trustees and the Administrators, the
Institutional Trustee shall have the power, duty and authority to act
on
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behalf of the Trust with respect to the following matters:
(A) establish and maintain a segregated non-interest
bearing trust account (the "INSTITUTIONAL TRUSTEE ACCOUNT") in
the name of and under the exclusive control of the
Institutional 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 Institutional Trustee,
deposit such funds into the Institutional Trustee Account and
make payments to the Holders of the Convertible Preferred
Securities and Holders of the Common Securities from the
Institutional Trustee Account in accordance with Section 6.01;
funds in the Institutional Trustee Account shall be held
uninvested until disbursed in accordance with this
Declaration; the Institutional Trustee Account shall be an
account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness is at least
equal to the rating assigned to the outstanding long-term debt
of the Debenture Issuer by a "nationally recognized
statistical rating organization," as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(B) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Institutional Trustee Account;
(C) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the
Convertible Preferred Securities and the Common Securities to
the extent the Debentures are redeemed or mature;
(D) upon written notice of a Special Event issued by
the Administrators in accordance with the terms of the
Securities, engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the
Debentures to Holders of Securities;
(E) the distribution through the Paying Agent of
amounts owed to the Holders in respect of the Securities;
(F) the exercise of all of the rights, powers and
privileges of a holder of the Debentures;
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(G) the sending of notices of default and other
information regarding the Securites and the Debentures to the
Holders in accordance with this Declaration;
(H) the distribution of the Trust property in
accordance with the terms of this Declaration;
(I) to the extent provided in this Declaration, the
winding up of the affairs of and liquidation of the Trust and
the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(J) after any Event of Default (provided that such
Event of Default is not by or with respect to the
Institutional Trustee), the taking of any action incidental to
the foregoing as the Institutional Trustee may from time to
time determine is necessary or advisable to give effect to the
terms of this Declaration and protect and conserve the Trust
property for the benefit of the Holders (without consideration
of the effect of any such action on any particular Holder);
and
(K) 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 Convertible Preferred Securities or to enable
the Trust to effect the purposes for which the Trust was
created.
(iii) The Institutional Trustee shall have the power and
authority to act on behalf of the Trust with respect to any of the
duties, liabilities, powers or the authority of the Administrators set
forth in Section 3.07(a)(i)(G) and (I) herein but shall not have a duty
to do any such act unless specifically requested to do so in writing by
the Sponsor, and shall then be fully protected in acting pursuant to
such written request; and in the event of a conflict between the action
of the Administrators and the action of the Instituional Trustee, the
action of the Institutional Trustee shall prevail.
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(iv) All monies deposited in the Institutional Trustee Account,
and all Debentures held by the Institutional Trustee for the benefit of
Holders of Securities, will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of, or for the
benefit of, the Institutional Trustee or its agents or their creditors.
(v) The Institutional Trustee shall take all actions and
perform such duties as may be specifically required of the
Institutional Trustee pursuant to the terms of the Securities.
(vi) The Institutional Trustee may bring or defend, pay,
collect, compromise, arbitrate, resort to legal action or otherwise
adjust claims or demands of or against the Trust ("LEGAL ACTION")
arising out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge
or the Institutional Trustee's duties and obligations under this
Declaration or the Trust Indenture Act; provided, that if an Event of
Default has occurred and is continuing and such event is attributable
to the failure of the Debenture Issuer to pay interest or principal on
the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a
Holder of Convertible Preferred Securities may to the fullest extent
permitted by law directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation
amount of the Convertible Preferred Securities of such Holder (a
"DIRECT ACTION") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the
Holders of the Common Securities will be subrogated to the rights of
such Holder of Preferred Securities to the extent of any payment made
by the Debenture Issuer to such Holder of Preferred Securities in such
Direct Action; provided, however, that no Holder of the Common
Securities may exercise any such right of subrogation so long as an
Event of Default with respect to the Convertible Preferred Securities
has occurred and is continuing. Except as provided in the preceding
sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the
Debentures.
(vii) The Institutional Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default actually
known to a Responsible Officer of the Institutional Trustee occurs and
is continuing,
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the Institutional Trustee shall, subject to the provisions of this
Declaration, 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 this Declaration and such Securities.
(viii) The Institutional Trustee shall continue to serve as
Trustee until either:
(A) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of
Convertible Preferred Securities pursuant to the terms of the
Convertible Preferred Securities; or
(B) a Successor Institutional Trustee has been
appointed and has accepted that appointment in accordance with
Section 5.06.
(b) Notwithstanding anything herein to the contrary, the Institutional
Trustee and Administrators are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
Investment Company required to be registered under the Investment Company Act or
fail to be classified as a grantor trust for United States Federal income tax
purposes and so that the Debentures will be treated as indebtedness of the
Debenture Issuer for United States Federal income tax purposes. In this
connection, the Institutional Trustee, the Administrators and the Holders of a
Majority in Liquidation Amount of the Common Securities are authorized to take
any action, not inconsistent with applicable law, the Certificate of Trust or
this Declaration, as amended from time to time, that each of the Institutional
Trustee, any Administrator and the Holders of a Majority in Liquidation Amount
of the Common Securities determines in its discretion to be necessary or
desirable for such purposes, so long as such action does not adversely affect in
any material respect the interests of the Holders of the Convertible Preferred
Securities.
(c) All expenses incurred by the Administrators or the Trustees
pursuant to this Section 3.07 shall be reimbursed by the Sponsor, and the
Trustees shall have no obligations with respect to such expenses.
SECTION 3.8. Prohibition of Actions by the Trust, the Trustees and the
Administrators. (a) The Trust shall not, and the Institutional Trustee and the
Administrators shall not cause the Trust to, engage in any activity other than
as required or authorized by this Declaration. In particular neither the
Trustees nor
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the Administrators shall cause the Trust 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 this Declaration or Annex I
hereto, (A) direct the time, method and place of exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is not waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of counsel to the effect that
such amendment, modification or termination will not cause more than an
insubstantial risk that (x) the Trust will be deemed an Investment
Company required to be registered under the Investment Company Act or
(y) for United States federal income tax purposes the Trust will not be
classified as a grantor trust.
SECTION 3.9. Certain Duties and Responsibilities of the Institutional
Trustee. (a) The Institutional 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 Institutional Trustee. In case an Event of Default has occurred (and
has not
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been cured or waived pursuant to Section 2.06) and a Responsible Officer
of the Institutional Trustee has actual knowledge thereof, the Institutional
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
Institutional 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 Institutional
Trustee shall be determined solely by the express provisions
of this Declaration and the Institutional 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 Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional 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 Institutional
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 Institutional Trustee, the
Institutional Trustee 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 mathematical calculations or other
facts stated therein);
(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with
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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 Institutional
Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Institutional
Trustee against such risk or liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Institutional Trustee Account shall be to deal with such property
in a similar manner as the Institutional Trustee deals with similar
property for its own account, subject to the protections and
limitations on liability afforded to the Institutional Trustee under
this Declaration and the Trust Indenture Act;
(vi) the Institutional 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 Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Institutional Trustee
need not be segregated from other funds held by it except in relation
to the Institutional Trustee Account maintained by the Institutional
Trustee pursuant to Section 3.07(a)(ii)(A) and except to the extent
otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Administrators or the Sponsor.
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SECTION 3.10. Certain Rights of Institutional Trustee. (a) Subject to
the provisions of Section 3.09:
(i) the Institutional Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) if (A) in performing its duties under this Declaration the
Institutional Trustee is required to decide between alternative courses
of action, or (B) in construing any of the provisions of this
Declaration, the Institutional Trustee finds the same ambiguous or
inconsistent with any other provision contained herein, or (C) the
Institutional Trustee is unsure of the application of any provision of
this Declaration, then, except as to any matter as to which the Holders
of Convertible Preferred Securities are entitled to vote under the
terms of this Declaration, the Institutional Trustee may deliver a
notice to the Sponsor requesting the Sponsor's opinion as to the course
of action to be taken and the Institutional Trustee shall take such
action, or refrain from taking such action, as the Institutional
Trustee in its sole discretion shall deem advisable and in the best
interest of the Holders, in which event the Institutional Trustee shall
have no liability except for its own bad faith, negligence or willful
misconduct;
(iii) any direction or act of the Sponsor or the Administrators
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iv) whenever, in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Institutional 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 as to
factual matters (other than the interpretation of this Declaration),
which, upon receipt of such request, shall be promptly delivered by the
Sponsor or the Administrators;
(v) the Institutional Trustee shall have no duty to see to any
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recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or reregistration
thereof;
(vi) the Institutional Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such counsel
and experts with respect to legal matters or advice within the scope of
such 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 reliance thereon 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 Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vii) the Institutional 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 pursuant to this Declaration,
unless such Holder shall have provided to the Institutional Trustee
security and indemnity, reasonably satisfactory to the Institutional
Trustee, against the costs, expenses (including reasonable attorneys'
fees and expenses and the expenses of the Institutional Trustee's
agents, nominees or custodians) and liabilities that might be incurred
by it in complying with such request or direction, including such
reasonable advances as may be requested by the Institutional Trustee;
provided, that, nothing contained in this Section 3.10(a)(vii) shall be
taken to relieve the Institutional Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Declaration;
(viii) the Institutional 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, approval, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Institutional Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit;
(ix) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the
Institutional
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Trustee shall not be responsible for any misconduct or negligence on
the part of any agent, custodians, nominees or attorney appointed with
due care by it hereunder;
(x) any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional 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 Institutional 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 Institutional
Trustee's or its agent's taking such action;
(xi) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Institutional Trustee (A) may request
written 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
Institutional Trustee under the terms of the Securities in respect of
such remedy, right or action, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (C) shall be protected in conclusively relying on or
acting in or accordance with such instructions;
(xii) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration; and
(xiii) the Institutional 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 Institutional 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 Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
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SECTION 3.11. Delaware Trustee. Notwithstanding any other provision of
this Declaration other than Section 5.02, the Delaware Trustee, acting in its
capacity as such, shall not be entitled to exercise any powers, nor shall the
Delaware Trustee, acting in its capacity as such, have any of the duties and
responsibilities of the Administrators or the Institutional Trustee described in
this Declaration. 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 or applicable law, the Institutional Trustee or any
Administrator, as the case may be, is authorized to execute on behalf of the
Trust any documents, agreements, instruments or certificates that the
Institutional Trustee or the Administrators, as the case may be, have the power
and authority to execute pursuant to Section 3.07; provided, that the
registration statement referred to in Section 3.07(a)(i)(D), including any
amendments thereto, shall be signed by a majority of Administrators.
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, the
Debentures or the Securities.
SECTION 3.14. Duration of Trust. The Trust, unless dissolved pursuant
to the provisions of Article 7.04 hereof, shall have existence for forty (40)
years from December 1, 1997.
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 Sections 3 and 4 of
Annex I.
(b) The Trust may, with the consent of the Administrators or, if there
are more than two, a majority of the Administrators and without the consent of
the Holders of the Securities, the Delaware Trustee or the Institutional
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided, that:
(i) such successor entity ( the "SUCCESSOR ENTITY") either:
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(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Convertible Preferred
Securities other securities having substantially the same
terms as the Convertible Preferred Securities (the "SUCCESSOR
SECURITIES") so long as the Successor Securities rank the same
as the Convertible Preferred Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of
the Successor Entity possessing the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) such merger, consolidation, amalgamation or replacement
does not cause the Convertible Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(iv) such merger, consolidation, amalgamation or replacement
does not adversely affect the Holders of the Securities (including any
Successor Securities) in any material respect;
(v) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of independent counsel
to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the Holders of the
Securities (including any successor Securities) in any
material respect;
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company;
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or such Successor
Entity) will continue
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to be classified as a grantor trust for United States federal
income tax purposes; and
(vii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided
by the Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE 4
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities. On the Closing
Date the Sponsor will purchase all of the Common Securities issued by the Trust,
in an aggregate liquidation amount at least equal to 3% of the capital of the
Trust, at the same time as the Convertible Preferred Securities are sold.
SECTION 4.2. Responsibilities of the Sponsor. In connection with the
issue and sale of the Convertible Preferred Securities, the Sponsor shall have
the exclusive right and responsibility to engage in the following activities:
(a) to prepare and distribute an offering memorandum (the "OFFERING
MEMORANDUM") in preliminary and final form and any supplements and amendments
thereto, in relation to the offering and sale by the Trust of Convertible
Preferred Securities to qualified institutional buyers in reliance on Rule 144A
under the Securities Act and outside the United States to non-U.S. persons in
offshore transactions in reliance on Regulation S under the Securities Act and
to prepare for filing by the Trust and the Debenture Issuer with the Commission
any registration statement, including any amendment thereto, as contemplated by
the Registration Rights Agreement;
(b) to prepare or cause to be prepared for filing by the Trust an
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application to the PORTAL Market;
(c) to prepare for filing by the Trust of documents, or instruments to
be delivered to DTC relating to the Convertible Preferred Securities;
(d) to prepare for execution and filing by the Trust with the
Commission a registration statement on Form 8-A, including any supplements and
amendments thereto, relating to the registration of the Convertible Preferred
Securities under Section 12(b) of the Exchange Act;
(e) to determine the States in which to take appropriate action to
qualify or register for sale or resale all or part of the Convertible 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;
(f) to negotiate the terms of and execute the Purchase Agreement
providing for the sale of the Convertible Preferred Securities; and
(g) to negotiate the terms of the Registration Rights Agreement
providing for, among other things, the registration under the Securities Act of
resales from time to time of the Convertible Preferred Securities.
(h) to provide any Holder of Securities originally issued in an
offering not registered pursuant to the Securities Act, at the request of such
Holder, if prior to the Transfer Restriction Termination Date the Company is
neither subject to Section 13 or 15(d) of the Exchange Act, such information, if
any, required by Rule 144A(d)(4) under the Securities Act.
ARTICLE 5
TRUSTEES AND ADMINISTRATORS
SECTION 5.1. Number of Trustees and Administrators. (a) The number of
Trustees initially shall be two (2) and the number of Administrators shall
initially be three (3).
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(b) At any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees or
Administrators.
(c) After the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in Liquidation
Amount of the Convertible Preferred Securities voting as a class at a meeting of
the Holders of the Convertible Preferred Securities; provided, that (i) if
required by the Business Trust Act, there shall be one Trustee (the "DELAWARE
TRUSTEE") that shall meet the requirements of Sections 5.02 and 5.04 and (ii)
there shall be one Trustee (the "INSTITUTIONAL TRUSTEE") that shall meet the
requirements of 5.03 at such time and for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act.
SECTION 5.2. Delaware Trustee; Eligibility. (a) If required by the
Business Trust Act, the Delaware Trustee shall be:
(i) a natural person who is a resident of the State of
Delaware; or
(ii) if not a natural person, an entity that has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law.
(b) The initial Delaware Trustee shall be The Bank of New York
(Delaware).
(c) If at any time, the Institutional Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.
SECTION 5.3. Institutional Trustee; Eligibility. (a) The Institutional
Trustee 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 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
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and surplus of at least 500 million U.S. dollars ($500,000,000), 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 Institutional Trustee shall cease to be
eligible to so act under Section 5.03(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.07(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Institutional 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 Indenture, the Debentures, the Convertible Preferred
Securities and 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.
(e) The initial Institutional Trustee shall be The Bank of New York.
SECTION 5.4. Certain Qualifications of Administrators and the Delaware
Trustee Generally. Each Administrator and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5. Initial Administrators. The initial Administrators shall
be:
Thomas W. Ryan,
David A. Bozynski and
Diane L. Kaye.
SECTION 5.6. Delaware Trustee. The initial Delaware Trustee shall be
The Bank of New York (Delaware).
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SECTION 5.7. Appointment, Removal and Resignation of Trustees and
Administrators. (a) Subject to Section 5.07(b), Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in Liquidation Amount of the Convertible
Preferred Securities voting as a class at a meeting of the Holders of
the Convertible Preferred Securities.
(b) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.07(a) until a successor Trustee possessing
the qualifications set forth in Section 5.03 (a "SUCCESSOR INSTITUTIONAL
TRUSTEE") has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to the
Administrators and the Sponsor. The Trustee that acts as Delaware Trustee shall
not be removed in accordance with Section 5.07(a) 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 Delaware Trustee
and delivered to the Administrators and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, that:
(i) no such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered
to the Trust, the Sponsor and the resigning Institutional
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the
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Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee, as the case may be, if the Institutional Trustee or the Delaware
Trustee delivers an instrument of resignation in accordance with this Section
5.07.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.07 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation or removal, the Institutional Trustee or Delaware
Trustee resigning or being removed, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Institutional Trustee or
Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Institutional Trustee
or Successor Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(g) The Holders of the Convertible Preferred Securities will have no
right to vote to appoint, remove, replace or change the number of the
Administrators, which voting rights are vested exclusively in the Holders of the
Common Securities.
SECTION 5.8. 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 the Trustees or, if there are more than two, a majority of the
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section
5.07.
SECTION 5.9. Effect of Vacancies. The death, resignation, retirement,
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removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to dissolve, terminate or
annul the Trust. Whenever a vacancy in the number of Trustees shall occur, until
such vacancy is filled by the appointment of a Trustee in accordance with
Section 5.07, the Trustees in office, regardless of their number, shall have all
the powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by this Declaration.
SECTION 5.10. Meetings. Meetings of the Trustees or the Administrators
shall be held from time to time upon the call of any Trustee or Administrator,
as applicable. Regular meetings of the Trustees and the Administrators,
respectively, may be held at a time and place fixed by resolution of the
Trustees or the Administrators, as applicable. Notice of any in-person meetings
of the Trustees or the Administrators 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 Trustees or the Administrators 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 Trustee or an
Administrator, as the case may be, at a meeting shall constitute a waiver of
notice of such meeting except where a Trustee or an Administrator, as the case
may be, 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 Trustees or the Administrators, as the case may be, may be taken at a
meeting by vote of a majority of the Trustees or Administrators 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 Trustees or the Administrators. In the event there is only one
Trustee or Administrator, any and all action of such Trustee or Administrator
shall be evidenced by a written consent of such Trustee or Administrator.
Meetings of the Trustees and the Administrators together shall be held from time
to time upon the call of any Trustee or Administrator.
SECTION 5.11. Delegation of Power. (a) Any Trustee or Administrator
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any documents contemplated in Section 3.07, including any registration statement
or amendment thereto filed with the Commission, or making any other
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governmental filing; and
(b) The Trustees and the Administrators 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 Trustees or otherwise as the 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 5.12. Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Institutional Trustee or the Delaware
Trustee, 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 Institutional Trustee or the Delaware 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 Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee, as the case may be, hereunder, provided such Person
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.
ARTICLE 6
DISTRIBUTIONS
SECTION 6.1. Distributions. Holders of Securities shall receive
Distributions (as defined herein) in accordance with the applicable terms of the
relevant Holder's Securities. Distributions shall be made on the Convertible
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 (as defined in the
Indenture)), premium and/or principal on the Debentures held by the
Institutional Trustee (the amount of any such payment being a "PAYMENT AMOUNT"),
the Institutional 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 7
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ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities. (a) The
Administrators shall on behalf of the Trust issue one class of convertible
preferred securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "CONVERTIBLE
PREFERRED SECURITIES") and one class of convertible common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "COMMON SECURITIES"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Convertible Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(d) Every Person, by virtue of having become a Holder or a Convertible
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 and the Preferred Securities
Guarantee.
SECTION 7.2. Execution and Authentication. (a) The Certificates shall
be signed on behalf of the Trust by an Administrator. In case any Administrator
of the Trust who shall have signed any of the Securities shall cease to be such
Administrator before the Certificates so signed shall be delivered by the Trust,
such Certificates nevertheless may be delivered as though the person who signed
such Certificates had not ceased to be such Administrator; and any Certificate
may be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrators of the Trust, although
at the date of the execution and delivery of this Declaration any such person
was not such an Administrator.
(b) One Administrator shall sign the Convertible 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.
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A Convertible Preferred Security shall not be valid until authenticated
by the manual signature of an authorized signatory of the Institutional Trustee.
The signature shall be conclusive evidence that the Convertible Preferred
Security has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrator, the
Institutional Trustee shall authenticate the Convertible Preferred Securities
for original issue.
The Institutional Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Convertible Preferred Securities. A
Common Security need not be authenticated or countersigned. An authenticating
agent may authenticate Convertible Preferred Securities whenever the
Institutional Trustee may do so. Each reference in this Declaration to
authentication by the Institutional Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Institutional Trustee
to deal with the Company or an Affiliate.
SECTION 7.3. Form and Dating. The Convertible Preferred Securities and
the Institutional 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 typed, printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Administrators, 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 Institutional Trustee in writing. Each
Convertible Preferred Security Certificate 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 Institutional
Trustee, the Delaware Trustee, the Administrators and the Sponsor, by their
execution and delivery of this Declaration, expressly agree to such terms and
provisions and to be bound thereby.
SECTION 7.4. Paying Agent, Registrar and Conversion Agent. The Trust
shall maintain in the Borough of Manhattan, City of New York, State of New York,
an office or agency where Convertible Preferred Securities not held in
book-entry only form may be presented for payment (the "PAYING AGENT"). The
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Trust shall maintain an office or agency where Securities may be presented for
conversion (the "CONVERSION AGENT"). The Trust shall keep or cause to be kept at
such office or agency a register for the purpose of registering Securities and
transfers and exchanges of Securities, such register to be held by a registrar
(the "REGISTRAR"). The Trust may appoint the Paying Agent, the Registrar and the
Conversion Agent and may appoint one or more additional paying agents, one or
more additional registrars and one or more additional conversion agents in such
other locations as it shall determine. Any such Paying Agent shall comply with
Section 317(b) of the Trust Indenture Act. The term "PAYING AGENT" includes any
additional paying agent, the term "REGISTRAR" includes any additional registrar
and the term "CONVERSION AGENT" includes any additional conversion agent. The
Trust may change any Paying Agent, Registrar or Conversion Agent at any time
without prior notice to any Holder. The Trust shall notify the Institutional
Trustee in writing 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 Paying
Agent, Registrar or Conversion Agent, the Institutional Trustee shall act as
such.
The Trust initially appoints the Institutional Trustee as Paying Agent,
Registrar and Conversion Agent for the Convertible Preferred Securities and the
Common Securities.
The Trust shall require each Paying Agent other than the Institutional
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders of the Institutional Trustee all money held by the Paying
Agent for the payment of liquidation amounts, redemption amounts or Distribution
on the Securities, and will notify the Institutional Trustee in writing if there
are insufficient funds. While any such insufficiency continues, the
Institutional Trustee may require a Paying Agent to pay all money held by it to
the Institutional Trustee. The Trust at any time may require a Paying Agent to
pay all money held by it to the Institutional Trustee and to account for any
money disbursed by it. Upon payment over to the Institutional 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.
ARTICLE 8
DISSOLUTION OF TRUST
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SECTION 8.1. Dissolution of Trust. (a) The Trust shall dissolve, and
its affairs shall be wound up, upon the earliest to occur of the following:
(i) upon the bankruptcy of the Holder of the Common Securities
or the Sponsor;
(ii) (other than in connection with a merger, consolidation or
similar transaction not prohibited by the Indenture, this Declaration
or the Securities Guaranties) upon the filing of a certificate of
dissolution or its equivalent with respect to the Sponsor; the consent
of a Majority in Liquidation Amount of the Securities voting together
as a single class to dissolve the Trust or the revocation of the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and all of the Debentures held by the
Institutional Trustee shall have been distributed to the Holders of
Securities in exchange for all of the Securities;
(vi) upon the distribution of the Sponsor's Common Stock to all
Holders of Convertible Preferred Securities upon conversion of all
outstanding Convertible Preferred Securities;
(vii) the expiration of the term of the Trust on December 1,
2037; or
(viii) before the issuance of any Securities, with the consent of
all of the Administrators and the Sponsor.
(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 cancellation with
the Secretary of
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State of the State of Delaware.
(c) The provisions of Sections 3.09 and 3.10 and Article 10 shall
survive the termination of the Trust.
ARTICLE 9
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities. (a) 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.
(b) Upon issuance of the Common Securities, the Sponsor shall acquire
and retain beneficial and record ownership of the Common Securities and, for so
long as the Convertible Preferred Securities remain outstanding, the Sponsor
shall maintain 100% ownership of the Common Securities, provided that any
permitted successor of the Sponsor under the Indenture may succeed to the
Sponsor's ownership of the Common Securities.
(c) Subject to this Article 9, Convertible Preferred Securities shall
be freely transferable.
(d) Subject to this Article 9, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor, and 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; or
(ii) the Trust would be an Investment Company required to
register under the Investment Company Act or the transferee would
become an Investment Company required to register under the Investment
Company Act.
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(e) The Trust shall not be required (i) to issue, register the
transfer of or exchange any Convertible Preferred Securities during a period
beginning at the opening of business 15 days before the day of any selection of
Convertible Preferred Securities for redemption and ending at the close of
business on the earliest date on which the relevant notice of redemption is
deemed to have been given to all Holders of Convertible Preferred Securities to
be redeemed, or (ii) to register the transfer or exchange of any Convertible
Preferred Security so selected for redemption in whole or in part, except the
unredeemed portion of any Convertible Preferred Security being redeemed in part.
(f) Each Security that bears or is required to bear the legend set
forth in this Section 9.01(f) (a "RESTRICTED SECURITY") shall be subject to the
restrictions on transfer provided in the legend set forth in this Section
9.01(f), unless such restrictions on transfer shall be waived by the written
consent of the Administrators, and the Holder of each Restricted Security, by
such Holder's acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 9.01(f) and in Section 9.01(f), the terms
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Restricted Security.
Prior to the Transfer Restriction Termination Date, any certificate
representing Convertible Preferred Securities shall bear the following legend
(unless such Convertible Preferred Securities have been sold pursuant to a
registration statement that has been declared effective under the Securities
Act):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES PERSON AND IS
ACQUIRING THE CONVERTIBLE PREFERRED SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE
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TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE
UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO FEDERAL-MOGUL
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND THAT CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO
THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY, UNDER RULE 144(K) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX
SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER
AND SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK, AS INSTITUTIONAL
TRUSTEE (OR A SUCCESSOR INSTITUTIONAL TRUSTEE, AS APPLICABLE). THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE SECURITY
EVIDENCED HEREBY PURSUANT TO CLAUSE 1(E) ABOVE OR UPON ANY TRANSFER OF
THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "UNITED STATES PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. EACH
PURCHASER OR HOLDER OF THE SECURITY EVIDENCED HEREBY WILL BE DEEMED TO
HAVE REPRESENTED EITHER THAT (A) IT IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO PART 4 OF SUBTITLE B OF TITLE 1 OF ERISA OR A PLAN DESCRIBED
IN SECTION 4975 OF THE CODE OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR OTHER PLAN OR (B)
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ITS ACQUISITION, HOLDING AND DISPOSITION OF THE SECURITY EVIDENCED
HEREBY WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE BY REASON OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 91-38, PTCE 84-14, PTCE 90-1, PTCE 95-60 OR
PTCE 96-23.
Prior to the Transfer Restriction Termination Date, any certificate
representing Common Stock issued upon conversion of the
Convertible Debentures shall bear the following legend (unless
such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the
Securities Act):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON
STOCK EVIDENCED HEREBY EXCEPT (A) TO FEDERAL-MOGUL CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN COMPLIANCE WITH RULE 144A, (C) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT THAT
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND THAT
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER) AND (2) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
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CLAUSE 1(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(E) ABOVE OR UPON ANY
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THE COMMON STOCK EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "UNITED
STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Security or
security issued in exchange or substitution therefor (other than (i) Securities
acquired by the Sponsor or any Affiliate of the Sponsor and (ii) Common Stock
issued upon the conversion or exchange of any Security described in clause (i)
above) may, upon surrender of such Security for exchange to any Administrator on
behalf of the Trust in accordance with the provisions of this Section 9.01, be
exchanged for a new Security or Securities, of like tenor and aggregate
liquidation amount, which shall not bear the restrictive legend required by this
Section 9.01(f).
(g) Any Convertible Preferred Security or Common Stock issued upon the
conversion or exchange of a Convertible Preferred Security that, prior to the
Transfer Restriction Termination Date, is purchased or owned by the Sponsor or
any Affiliate thereof may not be resold by the Sponsor or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction that results in
such Convertible Preferred Securities or Common Stock, as the case may be, no
longer being "restricted securities" (as defined under Rule 144).
SECTION 9.2. Transfer of Certificates. The Registrar shall provide for
the registration of Certificates and of transfers of Certificates, which will be
effected without charge, but only upon payment (with such indemnity as the
Registrar may require) in respect of any tax or other government charges that
may be imposed in relation to it. Upon surrender for registration of transfer of
any Certificate, the Trust shall cause one or more new Certificates to be issued
in the name of the designated transferee or transferees. Every Certificate
surrendered for registration of transfer shall be accompanied by a written
instrument of transfer in form
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satisfactory to the Registrar duly executed by the Holder or such Holder's
attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer shall be canceled by the Registrar. A transferee of a
Certificate shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration.
SECTION 9.3. Deemed Holders. The Trust, the Administrators, the
Trustees, the Paying Agent, the Transfer Agent or the Registrar may treat the
Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole Holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Administrators or the Institutional
Trustee shall have actual or other notice thereof.
SECTION 9.4. Book Entry Interests. (a) So long as Convertible Preferred
Securities are eligible for book-entry settlement with the Clearing Agency or
unless otherwise required by law, all Convertible Preferred Securities that are
so eligible may be represented by one or more fully registered Convertible
Preferred Security Certificates (each a "GLOBAL CERTIFICATE") in global form to
be delivered to DTC, the initial Clearing Agency, by, or on behalf of, the
Trust. Such Global Certificates shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of DTC, and no
Convertible Preferred Security Beneficial Owner will receive a definitive
Convertible Preferred Security Certificate representing such Convertible
Preferred Security Beneficial Owner's interests in such Global Certificates,
except as provided in Section 9.07 below. The transfer and exchange of
beneficial interests in any such Security in global form shall be effected
through the Clearing Agency in accordance with this Declaration and the
procedures of the Clearing Agency therefor.
(b) Any Global Certificate may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Declaration as may be required by the Clearing Agency, by
any national securities exchange or by the National Association of Securities
Dealers, Inc. in order for the Convertible Preferred Securities to be tradeable
on the PORTAL Market or as may be required for the Convertible Preferred
Securities to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or required to comply with any applicable law
or any regulation
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thereunder or with the rules and regulations of any securities exchange upon
which the Convertible Preferred Securities may be listed or traded or to conform
with any usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Convertible Preferred Securities are
subject.
(c) Unless and until definitive, fully registered Convertible
Preferred Security Certificates have been issued to the Convertible Preferred
Security Beneficial Owners of a Convertible Preferred Security represented by a
Global Certificate pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force
and effect with respect to such Convertible Preferred Securities;
(ii) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of such
Convertible Preferred Securities and the sole holder of the Global
Certificates and shall have no obligation to the Convertible Preferred
Security Beneficial Owners of such Convertible Preferred Securities;
(iii) to the extent that the provisions of this Section 9.04
conflict with any other provisions of this Declaration, the provisions
of this Section 9.04 shall control; and
(iv) the rights of the Convertible Preferred Security
Beneficial Owners of Convertible Preferred Securities in global form
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Convertible Preferred Security Beneficial Owners and the Clearing
Agency and/or the Clearing Agency Participants.
(d) Notwithstanding any other provisions of this Declaration, a
Convertible Preferred Security represented by a Global Certificate may not be
transferred as a whole except by the Clearing Agency to a nominee of the
Clearing Agency or by a nominee of the Clearing Agency to the Clearing Agency or
another nominee to a successor Clearing Agency or a nominee of such successor
Clearing Agency.
SECTION 9.5. Notices to Clearing Agency. Whenever a notice or other
communication to the Convertible Preferred Security Holders is required under
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this Declaration, unless and until definitive Convertible Preferred Security
Certificates shall have been issued to the Convertible Preferred Security
Beneficial Owners pursuant to Section 9.07, the Administrators shall give all
such notices and communications specified herein to be given to the Convertible
Preferred Security Holders to the Clearing Agency, and shall have no notice
obligations to the Convertible Preferred Security Beneficial Owners.
SECTION 9.6. Appointment of Successor Clearing Agency. If any Clearing
Agency elects to discontinue its services as securities depositary with respect
to the Convertible Preferred Securities, the Administrators may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Convertible
Preferred Securities.
SECTION 9.7. Definitive Convertible Preferred Security Certificates
Under Certain Circumstances. (a) If:
(i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Convertible Preferred
Securities and a successor Clearing Agency is not appointed within 90
days after such discontinuance pursuant to Section 9.06; or
(ii) the Administrators elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency
with respect to the Convertible Preferred Securities in global form,
then:
(A) definitive Convertible Preferred Security
Certificates shall be prepared by the Administrators on behalf
of the Trust with respect to such Convertible Preferred
Securities; and
(B) upon surrender of the Global Certificates by the
Clearing Agency, accompanied by registration instructions, the
Administrators shall cause definitive Global Preferred
Security Certificates to be delivered to Convertible Preferred
Security Beneficial Owners of such Convertible Preferred
Securities in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for
any delay in delivery of such instructions and each of them
may conclusively rely on and shall be protected in relying on,
said instructions of the Clearing Agency. The definitive
Convertible Preferred Security Certificates
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shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the
Administrators, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of
identification or designation and such legends or endorsements
as the Administrators may deem appropriate, or as may be
required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any
stock exchange on which Convertible Preferred Securities may
be listed, or to conform to usage.
(b) At such time as all interests in a Global Certificate have been
redeemed, converted, exchanged, repurchased or canceled, such Global Certificate
shall be, upon receipt thereof, canceled by the Trust in accordance with
standing procedures and instructions of the Clearing Agency.
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates. If:
(i) any mutilated Certificates should be surrendered to the
Administrators, or if the Administrators shall receive evidence to
their satisfaction of the destruction, loss or theft of any
Certificate; and
(ii) there shall be delivered to the Registrar and the
Institutional Trustee or the Administrators such security or indemnity
as may be required by them to keep each of them harmless,
then:
in the absence of notice that such Certificate shall have been acquire by a bona
fide purchaser, the Institutional Trustee or any Administrator on behalf of the
Trust shall execute and deliver, in exchange for, or in lieu of, any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 9.08, the Institutional Trustee or the Administrators may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section 9.08 shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE 10
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. 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; or
(ii) 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 Convertible Preferred Securities shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
SECTION 10.2. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
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
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existence and amount of assets from which Distributions to Holders of Securities
might properly be paid.
SECTION 10.3. Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons and any Indemnified 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
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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 10.4. Indemnification. (a) (i) The Debenture Issuer shall
indemnify, to the full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Trust), by reason of the fact that he is or was a Company Indemnified Person,
against expenses (including reasonable attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe that his conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the Company Indemnified Person did not act in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by or in the right of the Trust to
procure a judgment in its favor by reason of the fact that he is or was
a Company Indemnified Person, against expenses (including reasonable
attorneys' fees) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust and except that no such
indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to
be liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication
of liability but in view of all the
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circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses that such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.04(a), or in defense of any
claim, issue or matter therein, he shall be indemnified by the
Debenture Issuer, to the full extent permitted by law, against expenses
(including reasonable attorneys' fees) actually and reasonably incurred
by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.04(a) (unless ordered by a court) shall be made by the
Debenture Issuer upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he
has met the applicable standard of conduct set forth in paragraphs (i)
and (ii). Such determination shall be made (1) by the Administrators by
a majority vote of a quorum consisting of such Administrators who were
not parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Administrators so directs, by independent legal counsel in a written
opinion, or (3) by the Holders of a Majority in Liquidation Amount of
the Common Securities.
(v) Expenses (including reasonable attorneys' fees) incurred
by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.04(a) shall be paid by
the Debenture Issuer in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Company Indemnified Person to repay such amount if it
shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section
10.04(a). Notwithstanding the foregoing, no advance shall be made by
the Debenture Issuer if a determination is reasonably and promptly made
(i) by the Administrators by a majority vote of a quorum of
disinterested Administrators, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Administrators so
directs, by independent legal counsel in a
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written opinion or (iii) by the Holders of a Majority in Liquidation
Amount of the Common Securities, that, based upon the facts known to
the Administrators, such counsel or such Holders at the time such
determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or
had reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Administrators, such
counsel or such Holders reasonably determine that such person
deliberately breached his duty to the Trust or the Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.04(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Holders of Convertible Preferred
Securities or otherwise. All rights to indemnification under this
Section 10.04(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.04(a) is in effect. Any
repeal or modification of this Section 10.04(a) shall not affect any
rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 10.04(a).
(viii) For purposes of this Section 10.04(a), references to "the
Trust" shall include, in the event of a consolidation or merger, in
addition to the resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in such
consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in
the same position under the provisions of this Section 10.04(a) with
respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had
continued.
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(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.04(a) shall, unless
otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a
person. The provisions of this Section 10.04 shall survive the
termination of this Declaration, the dissolution of the Trust or the
resignation or removal of any Administrator or Trustee.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "FIDUCIARY INDEMNIFIED
PERSON") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration or
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 10.04(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 10.5. Outside Business. Any Covered Person, the Sponsor, the
Delaware Trustee and the Institutional 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
Institutional 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 Institutional 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 Institutional Trustee may engage or
be interested in any
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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 or
body of holders of, securities or other obligations of the Sponsor of its
Affiliates.
ARTICLE 11
ACCOUNTING
SECTION 11.1. Fiscal Year. The fiscal year ("FISCAL YEAR") of the Trust
shall be the calendar year, or such other year as is required by the Code.
SECTION 11.2. Certain Accounting Matters. (a) At all times during the
existence of the Trust, the Administrators shall keep, or cause to be kept, full
books, 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 compliance 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 of the Trust by a firm of independent certified
public accountants selected by the Administrators. The books of account and the
records of the Trust, together with a copy of this Declaration and a certified
copy of the Certificate of Trust, or any amendment thereto, shall at all times
be maintained at the principal office of the Trust or its duly authorized
representative for any purpose reasonably related to its interest in the Trust
during normal business hours.
(b) The Administrators 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 income or
loss.
(c) The Administrators 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 Administrators shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
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(d) The Administrators shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Administrators on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3. Banking. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; provided, that all
payments of funds in respect of the Debentures held by the Institutional Trustee
shall be made directly to the Institutional Trustee Account and no other funds
of the Trust shall be deposited in the Institutional Trustee Account. The sole
signatories for such accounts (including the Institutional Trustee Account)
shall be designated by the Administrators; provided, that the Institutional
Trustee shall designate the signatories for the Institutional Trustee Account.
SECTION 11.4. Withholding. The Trust and the Administrators 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 Administrators
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 overwithholding, Holders shall be limited to
an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE 12
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
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only be amended by a written instrument approved and executed by:
(i) the Administrators (or, if there are more than two
Administrators, a majority of the Administrators);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the
Institutional Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment that affects
the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
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(B) reduce or otherwise adversely affect the powers
of the Institutional Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act.
(c) At any time the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities.
(d) Section 9.01(d) and this Section 12.01 shall not be amended
without the consent of all of the Holders of the Securities.
(e) Article 4 shall not be amended without the consent of the Holders
of a Majority in Liquidation Amount of the Common Securities.
(f) The rights of the Holders of the Common Securities under Article 5
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in Liquidation
Amount of the Common Securities.
(g) Notwithstanding Section 12.01(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to conform to any change in Rule 3a-5 of the Investment
Company Act or written change in interpretation or application of Rule
3a-5 of the Investment Company Act by any legislative body, court,
government agency or regulatory authority, which amendment does not
have a material adverse effect on the right, preferences or privileges
of the Holders.
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SECTION 12.2. Meetings of the Holders of Securities; Action by Written
Consent. (a) Meetings of the Holders of any class of Securities may be called at
any time by the Administrators (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 Convertible Preferred
Securities are listed or admitted for trading. The Administrators 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 Administrators one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on
which the Convertible 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 amount of Securities in
liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The Administrators
may specify that any written ballot submitted to the Security Holder
for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Administrators;
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(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;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Administrators or by such other Person that the
Administrators 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 Convertible Preferred Securities are then
listed or trading, otherwise provides, the Administrators, 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 13
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee .
The Trustee that acts as initial Institutional Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Institutional Trustee represents and warrants, as applicable, to the
Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee, that:
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(i) the Institutional Trustee is a New York banking
corporation with trust powers, duly organized, validly existing and in
good standing, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration;
(ii) the execution, delivery and performance by the
Institutional Trustee of the Declaration has been duly authorized by
all necessary corporate action on the part of the Institutional
Trustee. This Declaration has been duly executed and delivered by the
Institutional Trustee, and it constitutes a legal, valid and binding
obligation of the Institutional 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);
(iii) the execution, delivery and performance of this
Declaration by the Institutional Trustee does not conflict with or
constitute a breach of the charter or bylaws of the Institutional
Trustee; and
(iv) no consent, approval or authorization of, or registration
with or notice to, any state or federal banking authority is required
for the execution, delivery or performance by the Institutional
Trustee, of this Declaration.
SECTION 13.2. 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, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee, that:
(i) The Delaware Trustee is a natural person, who is a
resident of the state of Delaware, or, if not a natural person, is a
corporation with trust powers, that has its principal place of business
in the State of Delaware, is duly organized, validly existing and in
good standing, with authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Declaration and,
in either case, a Person that satisfies for the Trust the requirements
of Section 3807 of the Business Trust Act.
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(ii) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration. This
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).
(iii) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is
required for the execution, delivery or performance by the Delaware
Trustee, of this Declaration.
(iv) The execution, delivery and performance of this
Declaration by the Delaware Trustee does not conflict with or
constitute a breach of the charter or bylaws of the Delaware Trustee.
ARTICLE 14
MISCELLANEOUS
SECTION 14.1. Notices. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrators 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):
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Federal-Mogul Financing Trust
c/o Federal-Mogul Corporation
26555 Northwestern Highway
Southfield, MI 48034
Attention: Corporate Secretary
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as 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, Delaware 19711
Attention: Corporate Trust Department
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of Corporate Trust Trustee Administration (or such other
address as the Institutional Trustee may give notice of to the Holders of the
Securities).
(d) if given to any Holder of Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as such Holder of
Common Securities may give notice to the Trust):
Federal-Mogul Corporation
26555 Northwestern Highway
Southfield, MI 48034
Attention: Corporate Secretary
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
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.
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SECTION 14.2. Governing Law. This Declaration and the rights of the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Delaware and all rights and remedies shall be governed by such
laws without regard to principles of conflict of laws.
SECTION 14.3. Intention of the Parties. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 14.4. Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 14.5. Successors and Assigns. Whenever in this Declaration any
of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed.
SECTION 14.6. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 14.7. Counterparts. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the 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.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
--------------------------------
Thomas W. Ryan, as Administrator
------------------------------------
David A. Bozynski, as Administrator
------------------------------------
Diane L. Kaye, as Administrator
THE BANK OF NEW YORK (Delaware),
as Delaware Trustee
By:
---------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Institutional Trustee
By:
---------------------------------
Name:
Title:
FEDERAL-MOGUL CORPORATION,
as Sponsor and Debenture Issuer
By:
---------------------------------
Name:
Title:
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ANNEX I
TERMS OF
7% CONVERTIBLE PREFERRED SECURITIES
7% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated Declaration of
Trust, dated as of December 1, 1997 (as amended from time to time, the
"DECLARATION"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Convertible Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein having the meaning set forth in the Declaration or, if not defined in
such Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
(a) Convertible Preferred Securities. 10,000,000 Convertible Preferred
Securities of the Federal-Mogul Financing Trust (the "Trust") with an aggregate
liquidation amount with respect to the assets of the Trust of $500,000,000 (plus
up to an additional 1,500,000 ($75,000,000) issuable upon exercise of the
over-allotment option set forth in the Purchase Agreement) and a liquidation
amount with respect to such assets of $50 per convertible preferred security,
are hereby designated for the purposes of identification only as "7% Trust
Convertible Preferred Securities" (the "CONVERTIBLE PREFERRED SECURITIES"). The
Convertible Preferred Security Certificates evidencing the Convertible Preferred
Securities shall be substantially in the form of Exhibit A-1 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules of any
stock exchange on which the Convertible Preferred Securities are listed.
(b) Common Securities. 309,279 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of
$15,463,950, (plus up to an additional 46,392 ($2,319,600) issuable upon
exercise of the over-allotment option set forth in the Purchase Agreement) and a
liquidation amount with respect to such assets of the Trust of $50 per common
security, are hereby designated for the purposes of identification only as "7%
Common Securities" (the "COMMON SECURITIES" and, together with the Convertible
Preferred Securities, "the SECURITIES"). The Common Securities Certificates
evidencing the Common Securities shall be in the form of Exhibit A-2 to the
Declaration, with and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
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2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 7% (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 Institutional 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 Institutional Trustee and to the extent
the Institutional 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.
(b) Except as otherwise provided herein, distributions on the
Securities will be cumulative, will accrue from December 1, 1997 and will be
payable quarterly in arrears, on March 1, June 1, September 1 and December 1 of
each year, commencing on March 1, 1998, except as otherwise described below. So
long as the Debenture Issuer shall not be in default in the payment of interest
on the Debentures, the Debenture Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period from time to
time on the Debenture for a period not exceeding 20 consecutive quarters (each
an "EXTENSION PERIOD"), during which Extension Period no interest shall be due
and payable on the Debentures; provided, that no Extension Period shall last
beyond the date of maturity or any redemption date of the Debentures. 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 Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension Period;
provided, that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity or any redemption date of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of
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any Extension Period and the payment of all amounts then due, the Debenture
Issue may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which shall be one Business Day prior to the relevant payment
dates (provided, that, if, at any time, the Securities are not held in
book-entry form, the relevant record dates shall be 15 days prior to the
relevant payment dates), which record and payment dates correspond to the record
and interest payment dates on the Debentures. Such Distributions will be paid
through the Institutional Trustee who will hold amounts received in respect of
the Debentures in the Institutional Trustee Account for the benefit of the
Holders of the Securities. The relevant record dates for the Common Securities
shall be the same record date as for the Convertible Preferred Securities. 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 interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(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 set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, that if
any Security is converted on or after a record date for payment of Distributions
thereon and prior to the opening of business on the related Distribution payment
date, the Distribution payable on such payment date with respect to such
Security shall be distributed to the holder of record at the close of business
on such record date, despite such conversion; provided further, that if the date
of any redemption of related Debentures falls between such record date and such
corresponding payment date, the amount of such Distribution shall include
accumulated and unpaid Distributions accrued to but excluding such date of
redemption.
(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.
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In the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Trust (each a "LIQUIDATION"), the Holders of the Securities
on the date of such Liquidation, will be entitled to receive out of the assets
of the Trust, after satisfaction of liabilities of creditors of the Trust as
provided by applicable law, an amount equal to the aggregate of the stated
liquidation amount of $50 per Security plus accrued and unpaid Distributions
thereon to the date of payment (the "LIQUIDATION DISTRIBUTION"), unless, in
connection with such Liquidation, Debentures in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accrued and unpaid distributions on, the Securities have been
distributed on a pro rata basis to the Holders of the Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Convertible Preferred Securities shall be paid on a pro rata basis.
The Holders of the Common Securities will be entitled to receive distributions
upon any such Liquidation pro rata with the holders of the Convertible Preferred
Securities, except that if a Declaration Event of Default has occurred and is
continuing, the Convertible Preferred Securities shall have a preference over
the Common Securities with regard to such distributions.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether
at maturity or upon redemption (either at the option of the Debenture Issuer or
pursuant to a Special Event as described below), the proceeds from such
repayment or payment shall be simultaneously applied to redeem Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed at a redemption price per Security equal to the
redemption price of the Debentures, together with accrued and unpaid
Distributions thereon through the date of the redemption, payable in cash (the
"REDEMPTION PRICE").
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Convertible Preferred Securities will be
redeemed pro rata.
(c) If, at any time, a Tax Event or an Investment Company Event (each,
as defined below, a "SPECIAL EVENT") shall occur and be continuing, the Trust
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shall, except as provided below, be dissolved and Debentures with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
equal to accrued and unpaid Distributions on, the Securities, shall be
distributed, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the Holders of the Securities in liquidation of
such Holders' interests in the Trust on a pro rata basis within 90 days
following the occurrence of such Special Event (the "90 DAY PERIOD"), upon not
less than 30 or more than 60 days notice; provided, that, in the case of a Tax
Event, such dissolution and distribution shall be conditioned on (i) the
Administrators' receipt of an opinion of nationally recognized independent tax
counsel experienced in such matters (a "NO RECOGNITION OPINION"), which opinion
may rely on published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Securities will not recognize any gain or loss
for United States federal income tax purposes as a result of such dissolution of
the Trust and distribution of Debentures, (ii) the Debenture Issuer or the Trust
being unable to avoid such Tax Event within such 90 Day Period by taking some
ministerial action or pursuing some other reasonable measure that will have no
adverse effect on the Trust, the Debenture Issuer or the Holders of the
Securities and will involve no material cost (a "MINISTERIAL ACTION") and (iii)
the Debenture Issuer's prior written consent to such dissolution and
distribution.
If, in the event of a Tax Event, after receipt of a Dissolution Tax
Opinion (as defined herein) by the Administrators, (i) the Debenture Issuer has
received an opinion (a "REDEMPTION TAX OPINION") of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Debenture Issuer would
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 in liquidation of such Holders' interests in the Trust as
described in this Section 4(c), or (ii) the Administrators shall have been
informed by such tax counsel that a No Recognition Opinion cannot be delivered
to the Trust, the Debenture Issuer shall have the right at any time, upon not
less than 30 nor more than 60 days' notice, to redeem the Debentures in whole or
in part, at a redemption price equal to 100% of the principal amount thereof
plus accrued and unpaid interest thereon for cash within 90 days following the
occurrence of such Tax Event. Following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on
a pro rata basis; provided, that, if at the time there is available to the
Debenture Issuer or the Trust the opportunity to eliminate, within such 90 day
period, the Tax Event by taking some Ministerial Action, the
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Trust or the Debenture Issuer will pursue such Ministerial Action in lieu of
redemption.
"TAX EVENT" means that the Administrators shall have received an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "DISSOLUTION TAX OPINION") to the effect that as a result of (a) any
amendment to, clarification of, or change (including any announced prospective
change) in the laws, or any regulations thereunder, of the United States or any
political subdivision or taxing authority thereof or therein, (b) any judicial
decision, official administrative pronouncement, ruling, regulatory procedure,
notice or announcement, including any notice or announcement of intent to adopt
such procedures or regulations (an "ADMINISTRATIVE ACTION") or (c) any amendment
to, clarification of, or change in the official position or the interpretation
of such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement or decision is
announced, in each case, on or after the date of the Offering Memorandum, there
is the creation by such change in tax law of more than an insubstantial risk
that (i) the Trust is or will be within 90 days of the date of such change
subject to United States federal income tax with respect to interest accrued or
received on the Debentures, (ii) the Trust is or will be within 90 days of the
date of such change subject to more than a de minimis amount of taxes (other
than withholding taxes), duties or other governmental charges, or (iii) interest
paid in cash by the Debenture Issuer to the Trust on the Debentures is not, or
within 90 days of the date of such change will not be, deductible, in whole or
in part, by the Debenture Issuer for United States federal income tax purposes.
Notwithstanding the foregoing, a Tax Event shall not include any change in tax
law that requires the Debenture Issuer for United States federal income tax
purposes to defer taking a deduction for any original issue discount ("OID")
that accrues with respect to the Debentures until the interest payment related
to such OID is paid by the Debenture Issuer in cash; provided, that such change
in tax law does not create more than an insubstantial risk that the Debenture
Issuer will be prevented from taking a deduction for OID accruing with respect
to the Debentures at a date that is no later than the date the interest payment
related to such OID is actually paid by the Debenture Issuer in cash.
"INVESTMENT COMPANY EVENT" means that the Administrators shall have
received an opinion of nationally recognized independent counsel experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or
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regulation or a written change in interpretation or application of law or
regulations by any legislative body, court, governmental agency or regulatory
authority which became effective on or after the date of the Offering Memorandum
(a "CHANGE IN 1940 ACT LAW"), there is more than an insubstantial risk that the
Trust is or will be considered an "investment company" that is required to be
registered under the Investment Company Act of 1940, as amended (the "1940
ACT").
After the date for any distribution of Debentures upon dissolution of
the Trust: (i) the Securities will no longer be deemed to be outstanding and
(ii) certificates representing Securities held in definitive form, except for
certificates representing Convertible Preferred Securities held by the DTC or
its nominee, will be deemed to represent Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
(including Compound Interest) equal to accrued and unpaid Distributions on, such
Securities until such certificates are presented to the Debenture Issuer or its
agent for transfer or reissue.
(d) 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 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 by mail to
each Holder of Securities to be redeemed or exchanged and, in the case of a
notice of redemption to be given to all Holders, by release made to Reuters
Economic Services and Bloomberg Business News. For purposes of the calculation
of the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4, a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first-class mail, postage
prepaid, or by such other means suitable to assure delivery of such written
notice, to Holders of Securities and, if required, released as set forth in the
preceding sentence. 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 of Securities
shall affect the validity of the redemption or exchange proceedings with respect
to any other Holder of Securities.
(e) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
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irrevocable), then provided that the Debenture Issuer has paid the Institutional
Trustee a sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the Trust
on the redemption date. If a Redemption/Distribution Notice shall have been
given, then immediately prior to the close of business on the required date of
such payment, Distributions will cease to accrue on the Securities so called for
redemption and 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. In the event of
any redemption in part, the Trust shall not be required to (i) issue, register
the transfer of or exchange any Convertible Preferred Securities during a period
beginning at the opening of business 15 days before any selection for redemption
of Convertible Preferred Securities and ending at the close of business on the
earliest date on which the relevant notice of redemption is deemed to have been
given to all Holders of Convertible Preferred Securities so selected for
redemption or (ii) register the transfer of or exchange any Convertible
Preferred Securities so selected for redemption, in whole or in part, except for
the unredeemed portion of any Convertible Preferred Securities being redeemed in
part. If any date fixed for redemption of Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
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 Institutional Trustee
or by the Sponsor as guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accrue from the original
redemption date to the actual date of payment, in which case the actual payment
date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
(f) 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
Securities by tender, in the open market or by private agreement.
5. Conversion Rights.
The Holders of Securities shall have the right at any time, beginning
90
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days following the latest date of original issuance of any Convertible
Preferred Securities through the close of business on the Business Day prior to
December 1, 2027 (or, in the case of Securities called for redemption, prior to
the close of business on the Business Day prior to the 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 Federal-Mogul 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 0.9709 shares of Common Stock for each $50 in
principal amount of Debentures (which is equivalent to a conversion price of
$51.50 per share of Common Stock, subject to certain adjustments and resets set
forth in Sections 6.03 and 6.04 of the Supplemental Indenture (as so adjusted,
"CONVERSION PRICE")). Within one Business Day after the date which is the
earlier of (a) the date the Company withdraws the Offer, and (b) September 25,
1998, if the Offer has not been declared unconditional in all respects, the
Company will provided notice of such occurrence to the Holders.
(b) In order to convert Securities into Common Stock the Holder shall
surrender such Securities to the Conversion Agent and 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"). 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 immediately convert
such Debentures on behalf of such Holder, into Common Stock (at the conversion
rate specified in the preceding paragraph). The Conversion Agent shall notify
the Trust of the Holder's election to exchange Securities for a portion of the
Debentures held by the Trust and the Trust shall, upon receipt of such notice,
deliver to the Conversion Agent the appropriate principal amount of Debentures
for exchange in accordance with this Section. The Conversion Agent shall
thereupon notify Debenture Issuer of the Holder's election to convert such
Debentures into shares of Common Stock. If any Security is surrendered for
conversion on or after a record date for payment of Distributions thereon and
prior to the opening of
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business on the related Distribution payment date, such Security (other than a
Security or a portion of a Security called for redemption on a redemption date
occurring after such record date and on or prior to such distribution payment
date) must be accompanied by payment of an amount equal to the Distribution
payable on such Distribution payment date; provided further, that if the date of
any redemption of the related Debentures falls between such record date and the
related Distribution payment date, the amount of such payment shall include
Distributions accrued to, but excluding, such date of redemption. 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 accrued on the Securities surrendered for
conversion, or on account of any accumulated and unpaid dividends on the shares
of Common Stock issued upon such conversion. Securities shall be deemed to have
been converted immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Securities is received by the Trust in
accordance with the foregoing provision (the "CONVERSION DATE"). The Person or
Persons entitled to receive 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 Debenture Issuer 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 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 as "CONVERSION AGENT" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the 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
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conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Debenture Issuer to the Conversion Agent, which in turn will make such
payment to the Holder or Holders of Securities so converted.
(e) The Debenture Issuer 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 Debenture Issuer shall be entitled to deliver upon conversion of
Debentures, shares of Common Stock reacquired and held in the treasury of the
Debenture Issuer (in lieu of the issuance of authorized and unissued shares of
Common Stock), so long as any such treasury shares are free and clear of all
liens, charges, security interests or encumbrances. Any shares of Common Stock
issued upon conversion of the Debentures shall be duly authorized, validly
issued 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 Debenture Issuer and the
Trust shall prepare and shall use its best efforts to obtain and keep in force
such governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of Common Stock (and all requirements to list
Common Stock issuable upon conversion of Debentures that are at the time
applicable), in order to enable the Debenture Issuer to lawfully issue Common
Stock to the Trust upon conversion of the Debentures and the Trust to lawfully
deliver Common Stock to each Holder upon conversion of the Securities.
(f) The Debenture Issuer will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of Common Stock on
conversion of Debentures and the delivery of the shares of Common Stock by the
Trust upon conversion of the Securities. The Debenture Issuer shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that in which the Securities so converted were registered, and no
such issue or delivery shall be made unless and until the person requesting such
issue has paid to the Trust the amount of any such tax, or has established to
the satisfaction of the Trust that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Securities or set
forth in
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this Annex I to the Declaration or to the Declaration itself or otherwise
require the Institutional Trustee or the Trust to pay any amounts on account of
such withholdings.
6. Voting Rights - Convertible Preferred Securities.
(a) Except as provided under Sections 6(b) and 8 and as otherwise
required by law and provided in the Declaration (including rights to appoint and
remove the Institutional Trustee), the Holders of the Convertible Preferred
Securities will not have voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in Liquidation Amount of the Convertible Preferred
Securities, voting separately as a class, may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) exercise the remedies available
under the Indenture with respect to the Debentures, (ii) waive any past default
and its consequences that is waivable under Section 5.13 of the Indenture, or
(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, that if an Indenture Event of Default has
occurred and is continuing, the holders of 25% of the aggregate liquidation
amount of the Convertible Preferred Securities may direct the Institutional
Trustee to declare the principal of and interest on the Debentures immediately
due and payable; provided, further, that, where a consent under the Indenture
would require the consent or act of a Super Majority, only the holders of at
least such Super Majority in aggregate liquidation amount of the Convertible
Preferred Securities may direct the Institutional Trustee to give such consent
or take such action. The Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Convertible
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Convertible
Preferred Securities under this paragraph unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action. If the Institutional Trustee fails to
enforce its rights under the Declaration, any Holder of Convertible Preferred
Securities may, to the fullest
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extent permitted by law, institute a legal proceeding directly against any
Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.
Any approval required or direction of Holders of Convertible Preferred
Securities may be given at a separate meeting of Holders of Convertible
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
Administrators will cause a notice of any meeting at which Holders of
Convertible 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 Convertible Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Convertible Preferred
Securities will be required for the Trust to redeem and cancel Convertible
Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible 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.
Holders of Convertible Preferred Securities will have no rights to
appoint or remove the Administrators, who may be appointed, removed or replaced
solely by the Debenture Issuer as the indirect or direct holder of all of the
Common Securities.
7. Voting Rights - Common Securities.
(a) Except as provided under these Sections 7(b), (c) and 8 and as
otherwise required by law and provided in the Declaration, the Holders of the
Common Securities will not have voting rights.
(b) Subject to Section 2.06 of the Declaration and only after any
Event of Default with respect to the Convertible Preferred Securities has been
cured, waived or otherwise eliminated and subject to the requirements of the
second to
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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
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 5.13 of the Indenture, or (iii)
exercise any right to 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 a Super Majority,
the Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Pursuant to this
Section 7(b), the Institutional Trustee shall not revoke, or take any action
inconsistent with, any action previously authorized or approved by a vote of the
Holders of the Convertible Preferred Securities, and shall not take any action
in accordance with the direction of the Holders of the Common Securities under
this Section 7(c) if the action is prejudicial to the Holders of the Convertible
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may, to the
fullest extent permitted by law, institute a legal proceeding directly against
any Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional 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 Administrators will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a
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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.
(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Administrators 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 liquidation,
dissolution or winding-up of the Trust, other than as described in Section 8.01
of the Declaration, then the Holders of outstanding Securities voting together
as a single class, will be entitled to vote on such amendment or proposal (but
not on any other amendment or proposal) and such amendment or proposal shall not
be effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Securities affected thereby; provided, if any
amendment or proposal referred to in clause (i) above would adversely affect
only the Convertible Preferred Securities or only the Common Securities, then
only the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal shall not be effective except with the approval
of a Majority in Liquidation Amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in Liquidation Amount of the Securities voting together as a single
class; provided, that where a consent under the Indenture would require the
consent of the holders of a Super Majority, the Institutional Trustee may only
give such consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding; provided
further, that
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the Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 8(b) unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action.
9. pro rata.
A reference in these terms of the Securities to any distribution or
treatment as being "pro rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Convertible Preferred Securities pro rata according to the aggregate liquidation
amount of Convertible Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Convertible Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Convertible Preferred Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
10. Ranking.
The Convertible Preferred Securities rank pari passu and payment
thereon shall be made pro rata with the Common Securities except that, where a
Declaration Event of Default occurs and is continuing, 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 Convertible Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Convertible Preferred Securities and Common Securities,
by the acceptance thereof, agrees to the provisions of the Convertible Preferred
Securities Guarantee and the Common Securities Guarantee, respectively,
including the subordination provisions therein and to the provisions of the
Indenture.
12. No Preemptive Rights.
I-16
90
The Holders of the Securities shall have no preemptive rights or
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 Convertible
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate) and the Indenture to a Holder without charge on written request to
the Sponsor at its principal place of business.
I-17
91
EXHIBIT A-1
FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE
IF THE CONVERTIBLE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT __ THIS CONVERTIBLE PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE
MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS CONVERTIBLE PREFERRED SECURITY IS EXCHANGEABLE FOR CONVERTIBLE
PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION AND NO TRANSFER OF THIS CONVERTIBLE PREFERRED SECURITY (OTHER THAN A
TRANSFER OF THIS CONVERTIBLE PREFERRED SECURITY AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CONVERTIBLE PREFERRED SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CONVERTIBLE PREFERRED SECURITY ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE HOLDER OF THIS CONVERTIBLE PREFERRED SECURITY IS ENTITLED TO THE
BENEFITS OF THE REGISTRATION RIGHTS AGREEMENT DATED AS OF DECEMBER 1, 1997,
AMONG FEDERAL-MOGUL CORPORATION, FEDERAL-MOGUL FINANCING TRUST AND MORGAN
STANLEY & CO. INCORPORATED. THE HOLDER OF THIS CONVERTIBLE PREFERRED SECURITY
AGREES TO BE BOUND BY THE TERMS OF THE REGISTRATION RIGHTS AGREEMENT, A COPY OF
WHICH IS AVAILABLE UPON REQUEST FROM FEDERAL-MOGUL
A1-1
92
CORPORATION.
CERTIFICATE NUMBER:
NUMBER OF CONVERTIBLE PREFERRED SECURITIES:
CUSIP NO. 313552 20 0
Certificate Evidencing Convertible Preferred Securities
of
FEDERAL-MOGUL FINANCING TRUST
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES PERSON AND IS
ACQUIRING THE CONVERTIBLE PREFERRED SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A) TO FEDERAL-MOGUL CORPORATION OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E)
PURSUANT TO A
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REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND THAT CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE
SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY, UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK OF
NEW YORK, AS INSTITUTIONAL TRUSTEE (OR A SUCCESSOR INSTITUTIONAL
TRUSTEE, AS APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER
OF THE TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE
1(E) ABOVE OR UPON ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. EACH PURCHASER OR HOLDER OF THE SECURITY
EVIDENCED HEREBY WILL BE DEEMED TO HAVE REPRESENTED EITHER THAT (A) IT
IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO PART 4 OF SUBTITLE B OF
TITLE 1 OF ERISA OR A PLAN DESCRIBED IN SECTION 4975 OF THE CODE OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH ERISA
PLAN OR OTHER PLAN OR (B) ITS ACQUISITION, HOLDING AND DISPOSITION OF
THE SECURITY EVIDENCED HEREBY WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE BY
REASON OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 91-38, PTCE
84-14, PTCE 90-1, PTCE 95-60 OR PTCE 96-23.
7% Trust Convertible Preferred Securities (liquidation amount $50 per
Trust Convertible Preferred Security)
A1-3
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Federal-Mogul Financing Trust, a statutory business trust created under
the laws of the State of Delaware (the "TRUST"), hereby certifies that Cede &
Co. (the "HOLDER") is the registered owner of convertible preferred securities
of the Trust representing undivided beneficial interests in the assets of the
Trust designated the 7% Trust Convertible Preferred Securities (liquidation
amount $50 per Trust Convertible Preferred Security) (the "CONVERTIBLE PREFERRED
SECURITIES"). The Convertible 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 Convertible 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 December 1,
1997, as the same may be amended from time to time (the "DECLARATION"),
including the designation of the terms of the Convertible 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 Convertible Preferred
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Convertible Preferred Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Convertible Preferred Securities as evidence of indirect beneficial
ownership in the Debentures.
Unless the Institutional Trustee's Certificate of Authentication hereon
has been properly executed, these Convertible Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
This certificate and the rights of the parties hereunder shall be
governed by, and construed 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.
A1-4
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IN WITNESS WHEREOF, the Trust has executed this certificate this 1st
day of December , 1997.
Federal-Mogul Financing Trust
By:
---------------------------
Name:
Title: Administrator
[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred to in the
within-mentioned Declaration.
Dated: December 1, 1997
The Bank of New York,
as Institutional Trustee or as Authentication Agent
By: By:
-------------------------------
Authorized Signatory Authorized Signatory
A1-5
96
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Convertible Preferred Security will be
fixed at a rate per annum of 7% (the "COUPON RATE") of the stated liquidation
amount of $50 per Convertible Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Institutional 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 Institutional Trustee and to the extent the Institutional 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, 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 Convertible
Preferred Securities will be cumulative, will accrue from the first date that
any Convertible Preferred Securities are issued and will be payable quarterly in
arrears, on March 1, June 1, September 1 and December 1 of each year, commencing
on March 1, 1998, which payment dates correspond to the interest payment dates
on the Debentures, to Holders of record at the close of business on the regular
record date for such Distribution, which shall be the close of business one
Business Day prior to such Distribution payment date (provided, that, if, at any
time, the Securities are not held in book-entry form, the relevant record dates
shall be 15 days prior to the relevant payment dates) unless otherwise provided
in the Declaration. 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
an "EXTENSION PERIOD"); provided, that no Extension Period shall last beyond the
date of the maturity or any redemption date of the Debentures 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 Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension Period;
provided, that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity or any redemption date of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
The Convertible Preferred Securities shall be redeemable as provided in
the Declaration.
The Convertible Preferred Securities shall be convertible into shares
of Common Stock,
A1-6
97
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.
A1-7
98
CONVERSION REQUEST
To: The Bank of New York,
as Institutional Trustee of
Federal-Mogul Financing Trust
The undersigned owner of these Convertible Preferred Securities hereby
irrevocably exercises the option to convert these Convertible Preferred
Securities, or the portion below designated, into Common Stock of Federal-Mogul
Corporation (the "COMMON STOCK") in accordance with the terms of the Amended and
Restated Declaration of Trust (the "DECLARATION"), dated as of December 1, 1997,
among Thomas W. Ryan, David A. Bozynski and Diane L. Kaye, as Administrators,
The Bank of New York (Delaware), as Delaware Trustee, The Bank of New York, as
Institutional Trustee, Federal-Mogul Corporation, as Sponsor, and the Holders,
from time to time, of undivided beneficial interests in the assets of the Trust
to be issued pursuant to the Declaration. Pursuant to the aforementioned
exercise of the option to convert these Convertible Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Convertible 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 Convertible 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 Convertible Preferred Securities
set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
A1-8
99
Date: , ___________
in whole in part
-----
Number of Convertible 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 Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identifying
Number
-------------------------------------------
-------------------------------------------
-------------------------------------------
---------------------
Signature Guarantee:(1)
- -------------------------
(1) (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A1-9
100
FORM OF ASSIGNMENT FOR
DEFINITIVE CONVERTIBLE PREFERRED SECURITY OR COMMON STOCK
ISSUABLE UPON THE CONVERSION THEREOF
For value received ___________________ hereby sell(s), assign(s)
and transfer(s) unto ___________________________________________
(Please insert social security or other
taxpayer identification number of assignee.)
the within security and hereby irrevocably constitutes and appoints
______________ attorney to transfer the said security on the books of the
issuer, with full power of substitution in the premises.
In connection with any transfer of the within security occurring prior to the
Transfer Restriction Termination Date, the undersigned confirms that such
security is being transferred:
[ ] To Federal-Mogul Corporation or a subsidiary thereof; or
[ ] Pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the Securities
Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "AFFILIATE"):
[ ] The transferee is an Affiliate of the Company.
A1-10
101
Dated:
--------------------------------
Signature(s) --------------------------------------
--------------------------------------
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange.
--------------------------------------
Signature Guarantee
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
A1-11
102
SCHEDULE I
CHANGES TO NUMBER OF CONVERTIBLE PREFERRED SECURITIES
IN GLOBAL SECURITY
- --------------------- ------------------------------------- ----------------------------------- --------------------
DATE NUMBER OF CONVERTIBLE PREFERRED REMAINING CONVERTIBLE PREFERRED NOTATION
SECURITIES BY WHICH THIS GLOBAL SECURITIES REPRESENTED BY THIS MADE BY
SECURITY IS TO BE REDUCED OR GLOBAL SECURITY
INCREASED, AND REASON FOR REDUCTION
OR INCREASE
- --------------------- ------------------------------------- ----------------------------------- --------------------
- --------------------- ------------------------------------- ----------------------------------- --------------------
- --------------------- ------------------------------------- ----------------------------------- --------------------
- --------------------- ------------------------------------- ----------------------------------- --------------------
- --------------------- ------------------------------------- ----------------------------------- --------------------
- --------------------- ------------------------------------- ----------------------------------- --------------------
- --------------------- ------------------------------------- ----------------------------------- --------------------
- --------------------- ------------------------------------- ----------------------------------- --------------------
A1-12
103
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
CERTIFICATE NUMBER: NUMBER OF COMMON SECURITIES:
Certificate Evidencing Common Securities
of
FEDERAL-MOGUL FINANCING TRUST
7% Common Securities
(liquidation amount $50 per Common Security)
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
UNITED STATES PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES PERSON AND IS
ACQUIRING THE CONVERTIBLE PREFERRED SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
SECURITY EXCEPT (A) TO FEDERAL-MOGUL CORPORATION OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND THAT
A2-1
104
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER) AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITY EVIDENCED HEREBY, UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK,
AS INSTITUTIONAL TRUSTEE (OR A SUCCESSOR INSTITUTIONAL TRUSTEE, AS
APPLICABLE). THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE
TRANSFER OF THE SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE 1(E) ABOVE
OR UPON ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "UNITED STATES
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. EACH PURCHASER OR HOLDER OF THE SECURITY EVIDENCED
HEREBY WILL BE DEEMED TO HAVE REPRESENTED EITHER THAT (A) IT IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO PART 4 OF SUBTITLE B OF TITLE 1 OF
ERISA OR A PLAN DESCRIBED IN SECTION 4975 OF THE CODE OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE THE ASSETS OF ANY SUCH ERISA PLAN OR
OTHER PLAN OR (B) ITS ACQUISITION, HOLDING AND DISPOSITION OF THE
SECURITY EVIDENCED HEREBY WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE BY REASON OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 91-38, PTCE 84-14, PTCE
90-1, PTCE 95-60 OR PTCE 96-23.
Federal-Mogul Financing Trust, a statutory business trust created under
the laws of the State of Delaware (the "TRUST"), hereby certifies that
Federal-Mogul Corporation, a Michigan corporation (the "HOLDER") is the
registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 7% Common
Securities (liquidation amount $50 per Common Security) (the "COMMON
SECURITIES"). Subject to the Declaration (as defined below), 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
A2-2
105
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 December 1, 1997, 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.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this certificate, 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.
This certificate and the rights of the parties hereunder shall be
governed by and construed 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 conflicts of laws.
IN WITNESS WHEREOF, the Trust has executed this certificate this 1st
day of December, 1997.
FEDERAL-MOGUL FINANCING TRUST
By:
-----------------------------------
Name:
Title: Administrator
A2-3
106
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of 7% (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 Institutional 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 Institutional Trustee and to the
extent the Institutional 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, will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the first date that any
Convertible Preferred Securities are issued and will be payable quarterly in
arrears, on March 1, June 1, September 1 and December 1, which payment dates
correspond to the interest payment dates on the Debentures, to Holders of record
at the close of business on the regular record date for such Distribution, which
shall be the close of business 15 days prior to such Distribution payment date
unless otherwise provided in the Declaration. 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 an "EXTENSION PERIOD"); provided, that no Extension
Period shall last beyond the date of maturity of the Debentures 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 Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension Period;
provided, that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
date of maturity of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
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
A2-4
107
----
forth in the Declaration.
A2-5
108
----
CONVERSION REQUEST
To: The Bank of New York
as Institutional Trustee of
Financing Trust
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of Federal-Mogul Corporation (the "COMMON STOCK")
in accordance with the terms of the Amended and Restated Declaration of Trust
(the "DECLARATION"), dated as of December 1, 1997, among Thomas W. Ryan, David
A. Bozynski and Diane L. Kaye, as Administrators, The Bank of New York
(Delaware), as Delaware Trustee, The Bank of New York, as Institutional Trustee,
Federal-Mogul Corporation, as Sponsor, and the Holders, from time to time, of
undivided beneficial interests in the assets of 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.
A2-6
109
Date: , ___________
in whole in part
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Number of Convertible 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
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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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(2)
Signature Guarantee:
- -------------------------
(2) (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 Conversion Agent, 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
Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A2-7
110
EXHIBIT B
SPECIMEN OF DEBENTURE
A2-8
111
EXHIBIT C
PURCHASE AGREEMENT
C-1